Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 13 June 2022 to Question 11630 on Cryptocurrencies: Regulation, what assessment he has made of the (a) adequacy of existing skills and qualifications and (b) requirement to acquire further skills of brokers who (i) are already regulated and compliant with Money Laundering Regulations and (ii) do not intend to custody cryptoassets themselves but instead use a registered cryptoasset firm.

It is the responsibility of the FCA to assess whether cryptoasset firms have appropriate anti-money laundering controls.

As part of this assessment, firms must demonstrate they have the necessary skills and qualifications. Firms must also demonstrate they have proper policies and procedures in place to deal with the specific nature of the cryptoasset ecosystem. Where either is assessed to be below the required standard, they may have their application rejected or refused.

The Money Laundering Regulations established a risk-based approach to the supervision of cryptoasset businesses. The assessment which each firm must undergo is therefore proportionate to the risks generated by the kind of activities firms engage in.

This means that whether the broker holds cryptoassets themselves or uses a registered cryptoasset firm, the skills & procedures required will likely be different from those that a large cryptoasset exchange is expected to demonstrate.