UK Government Issues New Guidance On Data Collection Related To Self Custody Crypto Wallets

Richard Marley
June 23, 2022
3 minutes read
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The government of the United Kingdom is issuing new rules on the collection of data for the crypto businesses that gather identifying information for self-custody wallets

The UK’s finance ministry is making new guidelines on when the business of digital currencies can gather the data of the user. The collection of identifying information regarding the self-custody wallets is addressed in the guidelines.

After consulting extensively, the treasury of the United Kingdom stated that the businesses running crypto will now be required to gather self-custody wallet verification data only for the transactions, specifically suspected of illicit activities.

The statement of the UK officials mentioned: “Instead of requiring the collection of beneficiary and originator information for all unhosted wallet transfers, crypto-asset businesses will only be expected to collect this information for transactions identified as posing an elevated risk of illicit finance.”

The consultation consisted of several respondents who exercised the included supervisors based on the anti-money laundering and counter-terrorist financing groups in the United Kingdom. The members of the crypto assets sectors, civil industry, and society of academia also appeared in the official consultation.

According to the government, the legislation will add the laws for the businesses dealing in crypto that will determine the suspicious transaction. The new guidance will take charge in the coming future, in September upon the official approval from the complete parliament.

In the past, the United Kingdom made crypto firms gather data about the recipient of the investments and funds that are sent from all the self-custody wallets. As the result of increasing scams and digital frauds, the government is looking to tackle crypto-based transactions.

The government made its statements regarding the prevailing issue: “The government does not agree that unhosted wallet transactions should automatically be viewed as a higher risk; many persons who hold crypto assets for legitimate purposes use unhosted wallets due to their customizability and potential security advantages (e.g. cold wallet storage), and there is no good evidence that unhosted wallets present a disproportionate risk of being used in illicit finance.”.

The reports that came out earlier this year, also indicated that the UK government would release more regulations in terms of the crypto exchanges after completing the consultations with the associated firms and trading groups.

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ASIC Expands its Team to Enhance Cryptocurrency Regulations
Australia’s financial regulator has enhanced the size of its crypto team. The crypto regulatory measures include their application for financial services licenses and show that specific crypto platforms have particular liquidity in reserve.

After shifting popular blockchain from a proof-of-work (PoW) to a proof-of-stake (PoS) system, ASIC, Australia’s financial regulator, has increased the size of its crypto team.

U.S. Security and Exchange Commission Chairman Gary Gensler stated that PoS-based tokens might be classified as securities.

The decision of ASIC to keep PoS tokens for example Ethereum, Cardano and Solana under its remit will further clarify the situation and enable crypto regulations to be more effective. To cope with the latest regulatory reforms, the crypto exchange must either delist the tokens or start complying with robust crypto laws.

Such moves may force a few crypto firms to manage their operating models. Even the largest stablecoin of the crypto market, Tether, has been caught in a controversy created over the failure of holding enough dollar reserves to back the stablecoin.

The crypto regulatory measures include their application for financial services licenses and show that these platforms have particular liquidity in reserve.

The final decision by the regulator has not been issued yet. Greg Yanco, the executive director for marketers, said that ASIC won’t be a “cheerleader for crypto assets.”

SEC Newgate carried out research the last November. It showed that 44% of Australian retail investors reported holding crypto. Out of these investors, only 20% viewed crypto as high-risk.

The chairperson of ASIC responded and said that the regulators were “concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulating crypto-assets to better protect investors.”

According to Yanco, until the last year, cryptocurrency was not such a high priority. Still, due to the decline of cryptocurrency in the previous few years and investors wiped out around the globe, ASIC expanded its team. It made crypto one of its “core strategic projects.”

Suggested Read: Regulatory Authorities to File a New Bill to Secure the Citizens from Cyber Criminal Activities

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UK Government Issues New Guidance On Data Collection Related To Self Custody Crypto Wallets

Forensic Document Verification – A New Standard

How Forensic Document Verification is Carried Out?

High-Profile Crime Cases of Document Fraud

Gang Arrested for Printing Fake Documents in Greece

Criminal Network Busted for Distributing Fake Documents

Regulatory Authorities Monitoring Document Fraud

Canada

Australia

Document Forgery Forensic Authentication – Ensuring KYC Compliance

What Shufti Pro Offers?

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Let’s prove your customer’s

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