FCA Proposes Crypto Crime Guidance On Wallet Checks And Blockchain Analytics

TL;DR: The FCA is consulting on updated financial crime guidance for crypto businesses, including customer checks, blockchain analytics and the Travel Rule. Responses are due December 24, and the guide itself would not create new rules.

Crypto businesses preparing for the UK’s expanded regulatory regime have a more detailed picture of the controls the Financial Conduct Authority expects them to build.

The regulator’s October 23 consultation proposes changes to its Financial Crime Guide, covering cryptoassets alongside fraud, sanctions, data security and money laundering. The proposals apply to the FCA’s financial crime supervisory population, including cryptoasset businesses and firms overseen under the Money Laundering Regulations.

The practical focus is on how firms assess customers and transactions, and how they react when risk changes. A blockchain record can help an investigation, but a record alone does not decide whether a customer explanation is credible or a transfer needs further scrutiny.

The consultation paper proposes examples of good and poor practice for enhanced due diligence, onboarding and transaction monitoring. It specifically addresses the use of blockchain analytics and further guidance on the Travel Rule, which concerns information accompanying certain transfers.

The paper also reminds firms that governance must evolve as their businesses grow. Its proposed changes include a question about whether policies and staff training distinguish obligations under proceeds-of-crime legislation from those under terrorism legislation.

For an exchange or provider of custody, the implication is that buying a screening product is only one part of the job. Someone still has to set its thresholds, review alerts and document decisions. A technically accurate warning is of limited use if it sits unreviewed while funds move elsewhere.

That matters for stablecoin transfers as much as for volatile tokens. A stable unit price does not establish the identity of a sender or the origin of funds. Transaction risk and market risk are different questions, and control systems need to reflect that distinction.

The FCA says the guide contains no rules and imposes no new requirements. It is intended to help firms understand supervisory expectations and assess their own arrangements. The consultation closes on December 24, after which the regulator plans to publish feedback and the final text in a policy statement.

Separately, the FCA’s regime overview says the wider cryptoasset framework is expected to begin on October 25, 2027. Applications for authorization are already open, and the regulator published a package of final rules in June.

The distinction between those stages matters for firms planning investment in compliance. This consultation does not postpone existing anti-money-laundering duties until next year, nor does it bring the whole future regime into force immediately. It fills in the proposed guidance firms can use when translating their obligations into day-to-day decisions.

Written by the News Desk and edited by Samuel Rae.