The UK’s Joint Money Laundering Steering Group Amends Crypto Asset Travel Rule

The UK’s Joint Money Laundering Steering Group (JMLSG) amended the Money laundering and Terrorist Financing law and introduced guidelines for crypto-assets travel, and all cryptocurrency firms must comply with these regulations before September 2023.

The Joint Money Laundering Steering Group (JMLSG) was established in 1990 by the UK parliament. It was formed to share information about trade associations with the leading financial sector and guide them to prevent money laundering. It assists financial institutes with practical attempts to comply with Anti-Money Laundering (AML). It provides a guidance note for the UK companies to clarify the AML and CFT regulations and urges them to implement effective business verification processes and measures.  

On July 28, 2023, the JMLSG opened a conference to discuss UK travel rules for crypto asset transfers. The virtual asset travel rule is disclosed in Money Laundering and Terrorist Financing (Amendment) (No2) Regulations 2022 by amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The financial institutes and their associated firms must comply with these requirements by September 1, 2023. Before these new amendments, firms only had to confirm certain information, such as the sender’s legitimacy and the recipient or beneficiary of a company transferring crypto assets. 

The JMLSG proposes a new regulation to strengthen the travel rule for crypto-assets covering scope, information requirements, batch transfers, returns, unhosted wallet transfers, wallet attribution, linked transactions and use of a layer-2 solution such as the Lightning Network. The JMLSG also ordered that financial institutes must report suspicious transactions and communicate with the Financial Conduct Authority (FCA). Responses on the JLMSG consultation may be recorded until August 25, 2023. 

Suggested Reads:

UK CONVICTS 11 COURIERS FOR CONSPIRING TO LAUNDER $124 MILLION IN CASH TO DUBAI

UK GOVERNMENT AIMS TO RECOVER £1 BILLION LOST FUNDS OVER THE NEXT DECADE

UK GAMBLING COMMISSION CHARGES KINDRED BRAND $8.7M OVER AML SHORTCOMINGS