Financial Conduct Authority (FCA) Forces UK Banks To Adopt Certain Security Measures To Minimize Cryptocurrency Business Risks
The Financial Conduct Authority (FCA) recommended banks to be more careful in their know-your-customer (KYC) operations. The financial monitoring department encouraged banks to be mainly attentive of customers and users who gain significant income from the market.
Banks are as well promoted to find out and determine the origin of wealth of their customers who take part in the market. The FCA acknowledged that using the modern means of following the “money trail” might be difficult to apply to crypto-assets. As though, the department urges that analogous difficulty isn’t a explanation for employing other demonstrative tests for a customer’s origin of wealth.
The other sphere of anxiety for the FCA is the risk set out by the anonymity of cryptocurrency operations. A lot of critics indicate to this anonymity as a methods by which criminality can mask its dishonest operations. The financial control urged banks to “take reasonable and proportionate measures” to decrease the opportunity of their services being used to promote tax avoidance, money laundering, and terrorist funding.
The financial observer, nevertheless, assigned that not all cryptocurrency-related operations are essentially criminal saying:
“There are many non-criminal motives for using crypto assets. These include using them as high-risk speculative investments or as a means of funding innovative technological development.”
In fact the FCA has issued statements relating to cryptocurrency in the U.K for many times. In April, the department announced that cryptocurrency trading connected to regulated financial products like options and futures contracts likely require authorization.