UK businesses have faced uncertain times in recent years with countless challenges ensuring they must look to all avenues to secure their futures. Most industries now have some kind of online presence, whether a website or social media accounts to advertise and help customers, or e-commerce sites where they can trade.
The popularity of mobile devices and improved connectivity has also meant that dedicated apps or mobile-friendly sites have become necessary to compete in modern markets.
One industry that has embraced this technological era is online gambling. Betting operators have made use of emerging technologies to provide immersive gaming experiences for their customers according to betting expert Michael Graw.
The early adoption of digital assets in the gambling industry has also helped the scalability of gambling operators who allow playing using cryptocurrencies as well as traditional payment methods.
The rise of cryptocurrency use has resulted in a strong regulatory framework for UK businesses, not only in the gambling industry, as you will see below.
The Regulator
The main UK regulator for all financial matters is the FCA (Financial Conduct Authority). The FCA regulates the use of cryptocurrencies to ensure businesses that deal with crypto transactions adhere to relevant AML (Anti-Money Laundering) and CFT (Countering Terrorism Financing) procedures and policies.
The Bank of England and HM Treasury also regulate crypto use in the UK.
Main UK Crypto Regulations
Compliance with financial regulations in the UK is an essential part of any business. Failure to comply with regulations can result in sanctions including fines and imprisonment.
Money Laundering, Terrorist Financing, and Transfer of Funds Regulations
Because cryptocurrencies are a decentralised currency that makes international transactions significantly easier, there are strict rules to mitigate the risk of criminal behaviours including money laundering and terrorism.
AML Requirements
AML compliance requires businesses to implement specific procedures to ensure they adhere to regulations. These requirements include:
- Training staff
- Appointing MLROs (Money Laundering Reporting Officers)
- Implementing risk assessment strategies
- CDD (Customer Due Diligence)
- SDD (Simplified Due Diligence)
- EDD (Enhanced Due Diligence)
- Sanction and PEP (Politically Exposed Person) list screening
- Monitoring transactions
- Continued customer transaction and behaviour monitoring
- Keeping records for all business relationships for a minimum of five years
- Working with the NCA (National Crime Agency) to report any suspicious activity
Financial Services and Markets Act 2023
The Financial Services and Markets Act 2023 saw the Financial Services and Markets Act 2000 reformed to cover cryptoassets. The main changes saw crypto assets recognised within the FSMA’s scope in terms of investments.
They will also fall under restrictions for financial promotion. This means users are prohibited from inviting or inducing engagements in investments unless they are authorised by the Financial Conduct Authority.
The regulations are designed to ensure those involved in crypto management, promotion, and transactions are authorised when necessary. Consumers will be encouraged to investigate whether individuals or businesses they deal with are compliant with legislation.
Electronic Money Regulations 2011
The Electronic Money Regulations 2011 are in place to encourage businesses to introduce safeguards and protections for customers. The regulations cover regulatory obligations and rights of businesses within the electronic money industry.
Crypto Companies
Companies dealing with security tokens are required to register with the FCA as they are deemed to be ‘regulated tokens’. Companies that deal with utility and exchange tokens will not need to register.
There are two main types of businesses that are affected by crypto regulations. These are:
Exchanges
The exchange businesses affected by these regulations include those that are involved in arranging crypto exchanges for money or transactions that exchange money for crypto.
Exchanges that trade crypto assets for other crypto assets or those that operate machines that use automated processes that allow people to exchange money for crypto assets or crypto assets for money are also included.
Wallet Providers
Businesses that provide cryptographic keys with the intent to store, hold, and transfer crypto assets for customers are the other type of cryptocurrency business that is affected by these regulations.
Conclusion
Individual crypto users won’t typically be concerned by UK regulations, but businesses that decide to accept payment of cryptocurrencies or facilitate crypto transactions may have to register with the FCA and adhere to all regulations.
The online betting industry is one that relies heavily on being able to provide consumers with a safe and convenient way to bet.
Consumers looking for quick payouts, non-Gamstop casinos, and big bonuses often explore crypto casinos. Choosing regulated betting sites offers greater protection for consumers and mitigates the risk of being targeted by cybercriminals.
Failure to comply with AML or counter-terrorism regulations can have serious repercussions for businesses. Sanctions include heavy fines and the damage to a business’s reputation could be irreparable.
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