The Financial Conduct Authority (FCA) has highlighted the importance of anti-money laundering (AML) and said that it has increased its surveillance.
Two of its biggest sanctions in the last 12 months related to failures to address financial crime and AML risks.
Speaking at the AML & ABC Forum 2021, Mark Steward, executive director of enforcement and market oversight at the FCA, said that the City regulator currently has 42 AML investigations ongoing – 25 into firms and 17 against individuals.
These involve, for example, systems and controls over politically exposed persons, customers with significant cash-intensive operations, correspondent banking and trade finance, and transaction monitoring.
Read more: How the FCA is tackling consumer investments
Steward said in the last 12 months the FCA has increased its surveillance of online investment promotions targeting offers from unauthorised issuers without Financial Services and Markets Act approvals, potential investment scams and other too good to be true promotions, including lead generation sites.
He said a number of these sites are under investigation or have become the subject of proceedings and the regulator has also issued alerts on its warning list concerning more than 1,000 firms, an increase of over 100 per cent on 2019.
The warning list is designed to prevent consumers dealing with firms that appear they should be authorised by the FCA but are not, or falling for investment scams without undertaking proper checks.
Steward said the FCA is now able to detect these sites, check them out and issue warnings, where appropriate, much more quickly than before and he would like to see the warning list used by firms as well as consumers.
“We would like to see our warning list actively used, not only by consumers, but also by authorised firms seeking to ensure any transactions or transfers of funds by or to such firms are properly scrutinised and, where applicable, the subject of suspicious activity reports or other reports to the National Crime Agency (NCA) and the FCA,” he said.
Steward said the FCA has now developed a version of the warning list, called the unregistered cryptocurrency businesses list, to help consumers and FCA authorised firms identify cryptocurrency firms that appear to be carrying on business in the UK but are not, or have not sought, registration from the FCA.
Since 10 January 2021, the FCA has been the AML supervisor of cryptocurrency firms. While the FCA does not regulate or supervise the cryptocurrency business, these firms are required to be registered with it and they are required to comply with the money laundering regulations.
The FCA placed the first names, all crypto ATM firms, on this list earlier this month, and has just added 29 crypto custodian wallet providers to the list.
“Without commenting on what other steps may be taken to enforce the new obligations, appearing on the list should be a warning for FCA-authorised firms, including any banks which may be providing banking services to these firms, as well as consumers,” Steward said.
“We would like to see the unregistered cryptocurrency businesses list used in the same way as the warning list, to safeguard consumers, as well as to ensure any transactions or transfers of funds by or to such firms are properly scrutinised and, where applicable, the subject of suspicious activity reports or other reports to the NCA and the FCA.”