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Suspected Sanctions Breach? The UK Forces Crypto Exchanges to Immediately Report

The Guardian | Jasper Jolly | Sep 4, 2022

HM treasury - Suspected Sanctions Breach?  The UK Forces Crypto Exchanges to Immediately ReportNew rules in response to Russia’s invasion of Ukraine cover all notionally valuable digital assets

  • Crypto exchanges must report suspected sanctions breaches to UK authorities under new rules brought in amid concerns that bitcoin and other cryptoassets are being used to dodge restrictions imposed in response to Russia’s invasion of Ukraine.
  • The rules, set by the Treasury’s Office of Financial Sanctions Implementation, will mean crypto exchanges are committing a criminal offence if they fail to report clients designated for sanctions.  Official guidance was updated on 30 August to explicitly include “cryptoassets” among those that must be frozen if sanctions are imposed on a person or company. As well as digital currencies, such as bitcoin, ether and tether, cryptoassets could include other notionally valuable digital assets such as non-fungible tokens.

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  • Under the rules, crypto exchanges must immediately act if they suspect that one of their customers is under sanctions, or if they suspect a breach of sanctions – giving them similar obligations to professionals such as estate agents, accountants, lawyers and jewellers.

Includes Non-fungible tokens

Using cryptocurrencies to evade sanctions and move money around the world was already illegal in the UK under laws that cover all “economic resources”. However, the change underlines authorities’ concern about the relatively new assets, which could be useful for evading sanctions because users do not rely on regulated entities to make transactions.

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Treasury spokesperson:

It is vital to address the risk of cryptoassets being used to breach or circumvent financial sanctions. These new requirements will cover firms that either record holdings of, or enable the transfer of cryptoassets and are therefore most likely to hold relevant information.

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NCFA Jan 2018 resize - Suspected Sanctions Breach?  The UK Forces Crypto Exchanges to Immediately ReportThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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