The government of the United Kingdom has announced plans to increase regulation of crypto assets as part of its efforts to combat economic crime in the country.
The United Kingdom published a policy paper on March 30. The Treasury and Home Office announced plans to “robustly” regulate cryptocurrency in order to combat illicit use of digital assets. The emphasis on regulation was part of the government’s economic crime plan for 2023-2026, which also included pooling “the knowledge and abilities of law enforcement agencies” to review and strengthen how crypto assets involved in legal proceedings can be seized and stored
“These steps will be consistent with our goal of making the U.K. “the world’s most appealing destination for cryptoassets and cryptoasset innovation,” according to the plan. “Despite the challenges, effective cryptoasset regulation benefits everyone, including consumers and businesses.”
The policy paper states that the U.K. The government predicted that criminals would move their cryptocurrency transactions to “less regulated exchanges and services” in other jurisdictions. The country’s Financial Conduct Authority, or FCA — one of the bodies in charge of enforcing crypto asset regulation — will collaborate with international counterparts to exchange information about its response to crypto regulation and supervision. According to the article:
“Based on estimates of UK transaction volumes, the [National Crime Agency’s] National Assessment Centre estimates that illicit cryptoasset transactions linked to the UK in 2021 likely equated to at least £1.24 billion (1% of total transaction value), with a realistic possibility that they were significantly higher.”
The government stated that as part of its plan of action, it intended to work with various agencies to implement the Financial Action Task Force’s Travel Rule as well as pass the Economic Crime and Corporate Transparency Bill by the end of the fourth quarter of 2023. Other objectives include improving communication between the FCA and cryptocurrency firms in the second quarter of 2024.
While the government appears to be pursuing a response to cryptocurrency on multiple fronts — from law enforcement to regulation — taxpayers in the country face their own reporting obligations. On March 15, the United Kingdom. Treasury announced in a report that it would amend the self-assessment forms for crypto assets beginning with the 2024-25 tax year.