Support With FCA Registration

Client background 

Our client was a financial services company that specialises in providing liquidity for the cryptocurrency markets.

The challenge 

To carry on cryptoasset activity in the UK, the client needed to be registered with the FCA under the  Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017  (MLRs) and to comply with the requirements of the MLRs. 

To support the registration process with the FCA, the client required an independent money laundering and terrorist financing risk assessment of the risk factors specific to its customers, geography, products, transactions, and delivery channels. 

Our approach and contribution 

Working in close partnership with the firm’s MLRO we:  

  • Created a methodology to assess the relevant risk factors, with reference to the appropriate regulations, guidance and industry best practice. 

  • Defined a proportionate risk scoring methodology to assess inherent risk, the residual risk after considering the controls in place to reduce the risk profile and the prevalence of the risk factor among the client’s customer base.  

  • Performed a qualitative evaluation of the respective policies, systems and controls to assess the strength and effectiveness of the risk mitigation framework. 

  • Created a programme of work to remediate and enhance documentation and operational processes where appropriate. 

  • Completed some aspects of the programme of work to expediate the remediation and satisfy FCA requirements. 

  • In partnership with a global law firm, supported the client in responding to queries raised and information requests made by the FCA. 

The outcome 

As a result of our engagement: 

  • The client successfully achieved its registration with the FCA, ensuring continuation of its cryptoasset business activities. 

  • The firm has a documented risk assessment, reviewed and agreed by its senior management. 

  • The methodology can be used for subsequent risk assessments undertaken internally by the client and was adapted to deliver similar requirements for an affiliated company.  

  • The client’s control framework has been strengthened making it more likely to prevent, identify and mitigate the risks of money laundering.