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Money Laundering: Cryptocurrencies

HM Treasury written question – answered on 21st December 2017.

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Photo of Chris Evans Chris Evans Labour/Co-operative, Islwyn

To ask Mr Chancellor of the Exchequer, whether under the 4th Money Laundering Directive there are minimum transaction thresholds below which customer due diligence is not required for trade and investment in digital currencies.

Photo of Steve Barclay Steve Barclay The Economic Secretary to the Treasury

The European Union's Fourth Anti Money Laundering Directive (4MLD) was implemented into UK legislation by 'The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017', which came in to force on 26 June 2017. Digital currency exchanges are not regulated for the purposes of 4MLD, so there is no requirement to undertake Customer Due Diligence for trade and investment in digital currencies at present.

The government has however committed to bringing digital currencies into the scope of anti-money laundering and counter terrorist financing (AML/CTF) regulation. Provisional political agreement has recently been reached at EU-level to amend 4MLD to bring digital currency exchange platforms and custodian wallet providers into the AML/CTF regime.

These amendments will require Member States to oblige these entities to conduct customer due diligence when establishing a business relationship, when carrying out occasional transactions of €15,000 or more, when carrying out a transfer of funds exceeding €1,000, where there is a suspicion of money laundering or terrorist financing, and when there are doubts about the veracity or adequacy of previously obtained customer identification data.

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