Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps her Department is taking to regulate cryptocurrency exchanges to prevent their use in financial crime.

Cryptoassets, specifically cryptoasset exchange providers and custodian wallet providers have been regulated under the Money Laundering and Terrorist Financing Regulations 2017 (MLRs) since January 2020.

The MLRs require UK cryptoasset firms to register with the Financial Conduct Authority (FCA) who act as a supervisory body to ensure firms have appropriate systems in place to prevent money laundering. The FCA also oversees financial promotions for cryptoassets, ensuring these adhere to regulations and are not misleading.

The Government has confirmed that it will proceed with creating a financial services regulatory regime for cryptoassets in the UK. Under this regime cryptoasset exchanges will be brought under broader FCA supervision, and subject to market abuse requirements.