Find out more about our requirements and expectations of cryptoasset businesses for AML/CTF regime registration.
We provide the below information on typical questions you may have about getting your registration ready, associated individuals and what happens after you’ve submitted your application.
What cryptoasset activities are in scope of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017?
See our scope of cryptoasset services table. Businesses providing any of these services and those set out in Regulation 14A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) would fall in scope of those regulations and must comply with them.
Our firm intends to carry out cryptoasset activity in scope of the MLRs. What do we need to do?
Any cryptoasset business that intends to carry out cryptoasset activity in the UK, and the activity is in scope of the MLRs, must be registered with the FCA before carrying out any cryptoasset activity.
You will be asked to confirm that you have reviewed this information before you can submit your application.
Our firm is already authorised/registered with the FCA. Do we have to separately register for cryptoasset activities?
See our information on who needs to register for cryptoasset activities.
How many applications for registration under the MLRs has the FCA received?
We publish statistics on the number of cryptoasset registration applications received and the outcome of these applications (registered, refused, etc.).
Does the FCA provide feedback on the applications it receives?
What is the cryptoasset registration fee?
What are the annual (periodic) fees and will our firm need to pay them?
Do we need to submit risk assessments? Should risk assessments focus on anti-money laundering, counter-terrorist financing and Proliferation Finance risks only?
Yes, Regulation 18 (4) and (6) set out that a firm’s risk assessment must be documented, kept up-to-date and made available to the FCA.
Anti-money laundering, counter-terrorist financing (AML/CTF) and Proliferation Finance (PF) are the primary focuses when assessing applications. However, we expect applicant firms to demonstrate sound understanding of required regulations, self-sufficiency and proactivity, which are necessary for regulatory supervision, should the application be successful.
Firms should undertake a holistic assessment of each financial crime risk they face, consider how these could affect their business and provide mitigations for each scenario.
Which financial projections are we expected to provide?
Regardless of the size and legal status of your firm, you must provide financial forecasts of 3 years as part of your application for registration.
You will need to provide the following (this should include the full range of products that your firm provides):
- Opening Balance Sheet
- Closing Balance Sheet
- Forecast P&L
- Forecast Cashflow
- Financial Accounts (if applicable)
- Sole Traders Appendix (if applicable)
You can use our Financial Analysis Template with your application. Use the guidance and glossary tab to determine which template is relevant to your business type (A, B or C).
How much of the operational capability and/or resources need to be in place at the outset, or would a robust scale up plan post-approval be acceptable?
Firms will need to demonstrate that they will have the control frameworks and resources in place to be fully compliant with the MLRs on the day before they are registered.
We understand that firms will grow therefore the control frameworks/resources in place at registration may not represent the end-state. If this is the case, firms should also provide us with robust plans that demonstrate how they will ensure that their control frameworks (in place at registration) will remain adequate as the business grows.
Are cryptoasset firms subject to Senior Managers and Certification Regime (SM&CR)?
The current regime is an AML/CTF-only regime. SM&CR and other accountability regimes do not apply unless a firm also carries out regulated activities and has received part 4A permissions.
Cryptoasset firms must appoint a Money Laundering Reporting Officer (MLRO)/Nominated Officer with relevant knowledge, experience and training as well as a level of authority, independence and sufficient access to resources and information, to enable them to monitor and manage compliance with policies, procedures and controls to carry out their roles and responsibilities under the MLRs.
For further information firms should refer to ‘before preparing an application’ section our feedback on good and poor quality applications page.
We have establishments in other countries, will those branches and subsidiaries be subject to MLRs?
Regulation 19 (6) requires firms to communicate their policies, controls and procedures to branches and subsidiary undertakings located outside the UK.
Regulation 20 (3) and (4) states that if any subsidiary undertaking or branch is established in a third country which does not impose AML/CTF and PF requirements as strict as those of the UK, the firm must ensure that such subsidiary undertakings or branches apply measures equivalent to those required by the MLRs.
Are there any restrictions on trading names or sensitive business names?
At the time of application, what information will we need to provide in connection to Travel Rule?
Since 1 September 2023, cryptoasset businesses in the UK have been required to collect, verify and share information about cryptoasset transfers, known as the ‘Travel Rule’.
You will need to provide details of your firm’s Travel Rule policies and procedures including how you will meet each Travel Rule requirement. The details should be supported by a flow of funds diagram that also includes the flow of Travel Rule data.
Do non-UK cryptoasset businesses need to be registered with the FCA under the MLRs if they are marketing cryptoassets to UK customers?
From 8 October 2023, the financial promotions regime applies to all firms marketing cryptoassets to UK consumers regardless of whether the firm is based overseas or what technology is used to make the communication.
From this date, cryptoasset businesses that wish to market to UK customers, ie communicate their own cryptoasset financial promotions, need to use 1 of the following 4 routes to communicate the promotions:
- The promotion is communicated by an FCA authorised person.
- The promotion is made by an unauthorised person but approved by an FCA authorised person.
- The promotion is communicated by a cryptoasset business registered with the FCA under the MLRs.
- The promotion otherwise complies with the conditions of an exemption in the Financial Promotion Order.
Promotions that are not made using one of these routes will be in breach of section 21 of the FSMA which is a criminal offence punishable by up to 2 years imprisonment and/or a fine.
See our cryptoasset firms marketing to UK consumers information.
Does the FCA expect firms to have their financial promotions compliance plans fully operational at the point of application?
As set out in our feedback on good and poor quality applications, applicants should demonstrate that they are agile and prepared to deal with a rapidly evolving regulatory framework, scanning for emerging risks and industry changes, tracking financial crime typologies and new rules that could affect their operations.
Applicants should have clear, detailed and credible plans for compliance with the rules set out in PS23/6. Firms should not underestimate the governance, systems and control changes that will be required for compliance with the financial promotions regime.
Our firm is based overseas, do image or brand advertising fall within the scope of financial promotions regime? Do we need to register with the FCA?
From 8 October 2023, cryptoasset business that wish to market to UK customers, ie communicate their own cryptoasset financial promotions, need to be communicating their promotion using 1 of the 4 communication routes.
The financial promotions regime applies to all firms marketing cryptoassets to UK consumers regardless of whether the firm is based overseas or what technology is used to make the communication.
Many of our financial promotion rules do not apply to ‘image advertising’. However, this is a narrowly defined term, referring to a communication that consists only of 1 or more of the following:
- the name of the firm
- a logo or other image associated with the firm
- a contact point
- a reference to the types of regulated activities provided by the firm, or to its fees and commissions
Any brand advertising or marketing material that includes content outside of these specific categories is likely to come under our financial promotion rules. Many examples we have seen of ‘brand advertising’ have gone beyond the scope of ‘image advertising’ and are likely to be financial promotions.
Firms should carefully review their sponsorships deals to ensure they are compliant with the financial promotions regime.
Can I make changes to my application after it has been submitted?
We expect all applications to be complete and of high quality at the point of submission. However, we generally allow firms to make minor adjustments to their applications after they have been submitted.
Before submitting your application, you should ensure you have provided all of the information requested. We expect all documents to be final versions that have been reviewed thoroughly and appropriately signed off before submission. We will not review or comment on draft documents as part of our assessment of an application.
If you need to make any changes after submission, complete transparency and timely disclosures of relevant changes is very important. You should also provide us with any new information that could affect our assessment.
Poor quality or incomplete submissions will be rejected. You will need to reapply when you can provide all of the information required.
It is also important that you fully disclose any information that we ask for. We take any non-disclosure of information that could impact our assessment very seriously, especially where there is an apparent attempt to mislead. If in doubt, it is better to disclose information rather than withhold it. We will refuse your application if false or misleading information is provided and may take further action if the false or misleading information was provided knowingly or recklessly.
Where there are significant issues with an application, eg systematic flaws in the control framework, we may recommend that you withdraw your application and reapply when you have addressed our concerns.
If you do withdraw your application, the application fee will not be returned and if you do not withdraw, we’ll consider refusing your application. Unless we change our decision, we will then usually publish our reasons for refusal in the form of a decision notice or final notice.
Many firms find it helpful to have an adviser or consultant support them in preparing applications, or to get ready for meetings or interviews. However, firms are accountable for their applications, and should be able to explain all the material in it.
Who can sign the application form?
The declaration must be signed by the person who is responsible for making this application on behalf of the applicant firm. The appropriate person(s) depends on the type of the applicant firm:
|A sole trader||The sole trader|
|A company with one director||The director|
|A company with more than one director||Two directors|
|A partnership||Two partners|
|A limited liability partnership||Two members|
|A limited partnership||A general partner or partners|
We are authorised/registered by the FCA for other activities and we have in place a Compliance Oversight and/or Money Laundering Reporting Officer (MLRO). Do we need to add another responsible individual for the cryptoasset activities?
Businesses that are already authorised or registered with the FCA for other activities are required to register specifically for the cryptoasset activities they intend to provide. The requirement to register will also apply for the relevant officer.
Businesses will also need to confirm, as part of the application, a nominated officer, as defined in the Regulation 21 of the MLRs, who is expected to be responsible for monitoring and managing compliance with policies, procedures and controls relating to money laundering and terrorist financing.
This nominated officer may be the same officer as relevant for another activity. However, the appointed officer must have the knowledge, experience and training as well as a level of authority and independence within the business and sufficient access to resources and information, to enable them to carry out that function.
Who can be the MLRO? Do MLROs need a qualification?
There is no legal requirement about qualification. However, per regulations, they are required to have ’adequate skills and experience and [to have] acted and may be expected to act with probity’.
Can a director be an MLRO of firm?
Do we need to report if any associated individuals had any complaint against them, which was investigated but no further actions were taken?
All information will be assessed on a case-by-case basis.
It is important that you fully disclose any information that we should be aware of. We take any non-disclosure of information that could impact our assessment very seriously, especially where there is an apparent attempt to mislead. If in doubt, it is better to disclose information rather than withhold it. We will refuse your application if false or misleading information is provided and may take further action if the false or misleading information was provided knowingly or recklessly.
Will we need to disclose if the applicant, any officer, manager or beneficial owner has been convicted before or has been subject to a country court judgment (CCJ)?
We will consider all convictions. An applicant, an officer, manager or beneficial owner that has an unspent conviction as listed in Schedule 3 offences under MLRs will automatically fail the fit and proper test.
Can senior manager responsibilities be delegated and in instances of any breaches, who will be held accountable?
Regulation 19 (2)(b) stipulates that senior management must be fully engaged in the decision-making processes. They must also have a responsibility to ensure that the firm’s policies, controls and procedures are appropriately designed and implemented, and are effectively operated to reduce the risk of the firm being used for money laundering or terrorist financing or proliferation financing.
Senior management must be aware of the level of financial crime risk the firm is exposed to and take a view whether the firm is equipped to mitigate that risk effectively; this includes compliance management arrangements, screening procedures, and an independent audit function. Decisions on entering or maintaining high-risk business relationships must be escalated to senior management. All the relevant decisions must be properly recorded, and the firm’s policies, controls and procedures must be followed and applied effectively.
After application submission
We have submitted our registration application via Connect. When will we hear back from the FCA about our application and its progress?
We'll acknowledge your application within 3 working days.
- Contact you again within 3 weeks – normally to introduce you to your case officer, or tell you when we'll assign one to your application.
- Your case officer will handle all communication about your application, and give you an alternative contact if they are unavailable.
- If we then have to assign your case to a different case officer, we'll let you know within 3 working days of making the change and give you the new contact details. Your new officer will in every instance receive a thorough handover of your case file to ensure there is no duplication or waste.
- Acknowledge all other communications from you within 2 working days of receiving them (this may be an automated response).
- Usually respond to a query within 10 working days of receiving it – and if this is not possible, we'll reply within the 10 days to tell you when you'll receive a fuller response.
- Give you clear deadlines when we ask you to send us additional information.
- Update you on the current status of your case at least monthly and often more frequently.
- We'll also indicate when your application is likely to be decided.
We have submitted our registration application via Connect. How long will it take for the FCA to complete its assessment?
Only once we have received all the required information to assess your application, we have 3 months to determine your application. We try to arrive at a decision as swiftly as we are able to and will keep you informed about our progress.
How do firms change their registration in case they applied for a wrong activity or change their business model?
Prior to registration, the firm will need to notify their case officer. If there are significant changes, such as if fundamental changes to the control framework are required, the case officer may request the firm considers withdrawing their application and reapplying with all their new information when they have satisfied themselves that they are ready to do so.
After registration, firms will need to complete a ‘Notification of Change form’ using Connect.
What steps will be taken if our application is approved?
Upon registration, you’re automatically added to our Financial Services Register. We’ll give you a Firm Reference Number (FRN) that uniquely identifies your firm. We’ll write to you confirming your registration.
After registration, if you require to make updates your firm or individual details, legal status, activities etc, you will be required to make an application via Connect. You can also contact us whenever you need our assistance.
If our application is unsuccessful, will we get a refund?
We’ll reject your submission without assessing it if you don't provide the minimum information we ask for. If this happens, we’ll explain the reason(s) and refund your application fee.
You can resubmit an application, containing all the relevant information, at any time.
Withdrawing an application
You may notify us that you wish to withdraw your application at any time during the authorisation process.
Common reasons for doing this are:
- not being ready, willing and organised to demonstrate that you meet the required standards when your application is submitted
- needing time to address our concerns, or produce or gather missing information
- understanding that registration is likely to be refused
The application fee will not be refunded when an application is withdrawn. Your firm can choose to reapply once you have addressed the feedback from your case officer. If you reapply, a new application fee will be payable. Accepting a notification to withdraw an application remains at the regulator’s discretion.
If we have found that your application doesn't meet the standard for registration, we'll refuse it and your application fee won't be refunded.
We'll send you a warning notice and, if you don't agree with our decision, you can either withdraw your application or make representations to the FCA decision maker.
Accepting a notification to withdraw an application remains at the regulator’s discretion. Unless we change our decision or accept your notification to withdraw, we'll then usually publish our reasons for refusal in the form of a decision notice or final notice.
Can we appeal against a refusal?
Yes, firms will have an opportunity to make an appeal. If we refuse your application, we’ll send you a warning notice and you will have the right to make representations.
If we do not agree with your representations, we’ll send you a decision notice which provides you with the details about action we have decided to take. At this stage you can refer the decision to Upper Tribunal if you want to appeal our decision.
If Upper Tribunal agrees with our decision, we’ll publish a final notice about your firm.
There’s more information about our refusal process in our Handbook.
What are the grounds for refusal?
Regulation 58 of MLRs requires the FCA (and any other registering authority) to refuse to register a firm if it is satisfied that the applicant or any associated individual is not a fit and proper person to carry on that business.
Firms are required to adhere to MLRs and if firms cannot satisfy that they have the correct systems and controls in place the FCA can refuse their application. These decisions are made on a case-by-case basis.
If our application has been unsuccessful in past, can we reapply?
If you are reapplying, it is important to that you have thoroughly considered our all feedback on your previous application and made all necessary changes to your application before submitting a new one. It is unlikely that your new application will be successful if the previous feedback has not been taken on-board. More information can be found on our feedback on good and poor quality applications.