meta_id 3206025

The Financial Conduct Authority (FCA) published comprehensive anti-money laundering (AML) guidance addressing questions from firms preparing for the transition to the new cryptoasset regulatory regime under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (FSMA). The guidance clarifies the interaction between the current Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) and the forthcoming FSMA regime, which commences in October 2027. The FCA will begin accepting applications for FSMA authorisation from September 30, 2026, with the application window remaining open until February 28, 2027. Firms currently registered under the MLRs should note that no automatic conversion will occur; they must secure separate authorisation under FSMA. The FCA encourages new firms to pursue FSMA authorisation rather than MLR registration, though firms with specific business justifications may still apply for MLR registration after September 30, 2026 through the Pre-application Support Service (PASS). The guidance establishes FCA expectations across multiple areas: governance and leadership arrangements, AML framework design, crypto-specific risk assessment, transaction monitoring capabilities, Travel Rule compliance, and sanctions obligations. Firms must demonstrate proportionate, risk-based AML frameworks tailored to their business models, with clear senior ownership, appropriate resourcing, and competent personnel in key roles. The FCA emphasises that business-wide risk assessments should be grounded in transaction flows and exposure points rather than generic crypto risks. For firms using blockchain analytics or third-party monitoring solutions, the FCA requires clear explanation of tool appropriateness, configuration, coverage limitations, and effectiveness testing. The guidance also addresses operational resilience, cross-border activity, and the relationship between AML controls and other financial crime obligations including sanctions and fraud. Firms should familiarise themselves with the FCA's proposed rules, particularly Consultation Papers CP25/25 and CP26/4, and monitor the FCA's cryptoasset regime webpages for further updates as the application period approaches.