The new Cryptocurrency Transfer Law, which took effect on September 1, aims to stop AML/CFT activities being carried out on blockchain networks.
It is now possible for crypto asset firms in the UK to stop cryptocurrency transfers in compliance with the Cryptocurrency Transfer Act that took effect on September 1st.
The Financial Conduct Authority issued the new law, which targets providers of virtual asset services, on August 17th. The new laws state that "UK virtual asset service providers must collect, verify and share information relating to crypto-asset transfers".
Accordingly, virtual service providers will have to conduct a “risk assessment” in the event that a person or entity receives cryptocurrency from an offshore jurisdiction that has not complied with the new transfer law, to see if the crypto assets can be delivered to the beneficiary.
The same law also applies to Britons looking to send payments outside the UK.
The UN agency’s Financial Action Task Force created the new transfer law in June 2019. The UK has passed legislation to begin implementing it in July 2022, in an effort to prevent AML/CFT activities carried out on blockchain networks.
Other countries that have adopted the Transfer Act include the United States, Germany, Japan, Singapore, Switzerland, Canada, South Africa, the Netherlands and Estonia, according to Sygna.io.
On June 23rd, the Financial Action Task Force criticized member states for failing to properly apply the new law, after a survey conducted by the Financial Action Task Force in March 2022 revealed that only 29 of the 98 jurisdictions At that time, it started applying the necessary procedures in accordance with the new law.
Ian Andrews, chief marketing officer of blockchain forensics platform Channellysis, explained in April that trying to coordinate cross-border information sharing between virtual asset service providers would be “very challenging” initially.
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