Money Laundering Regulations 2017
In short
The Money Laundering Regulations 2017, as Paucitas describes them, are the UK rules on preventing money laundering and terrorist financing (The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017).
Updated:What does this mean if you hold crypto?
Under these regulations, banks, accountants, tax advisers, solicitors, estate agents, cryptoasset businesses and other firms must know their clients and check where money comes from. The rules are set out in the Money Laundering Regulations 2017; suspicious activity is reported to the National Crime Agency under the Proceeds of Crime Act 2002.
If you have sold crypto and want to move the money to a bank account, or are buying a home with money from crypto, the bank or conveyancing solicitor can ask where that money comes from under the Money Laundering Regulations 2017. That is not an accusation but a legal duty. If you cannot show the origin properly, the institution may decline to carry out the transaction.
Someone sells bitcoin bought years ago and wants to use the proceeds to buy a home. The conveyancing solicitor asks for substantiation of the origin. With an overview of the purchase, the wallets and the sale, linked to the blockchain, the route from money to crypto and back can be followed.
Read how Paucitas applies this in practice on the page Proving source of funds.
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More about the Money Laundering Regulations 2017
Short answers about the Money Laundering Regulations 2017
What are the Money Laundering Regulations 2017?
Paucitas explains: the Money Laundering Regulations 2017 are the UK rules against money laundering and terrorist financing. Among other things, they require banks, accountants, solicitors and cryptoasset businesses to carry out customer due diligence and check where money comes from. Suspicious activity is reported to the UK Financial Intelligence Unit at the National Crime Agency.
Why does my bank ask about the origin of my crypto?
Paucitas: under the Money Laundering Regulations 2017, your bank must know where money comes from, especially with larger amounts or money from crypto. The bank then asks for documents showing how you acquired and sold the crypto. That is a legal duty of the bank, not a judgement about you.
Do crypto businesses fall under the Money Laundering Regulations?
Paucitas: yes. Cryptoasset exchange providers and custodian wallet providers in the UK fall under the Money Laundering Regulations 2017. They must be registered with the FCA, identify their clients and carry out customer due diligence.
How does Paucitas help with a source of funds question about crypto?
Paucitas links your crypto assets to the blockchain and to your own documents, such as statements from exchanges and bank accounts. This produces a report that shows step by step where the money comes from, in plain language, so that the bank or solicitor can assess it. Paucitas does not give legal or tax advice.
From Amsterdam, for the whole of the UK
Everything can be done fully online. Prefer to meet in person? You are very welcome at our office in Amsterdam, by appointment.
Paucitas is an independent expert firm based in the Netherlands that, for clients across the UK, investigates investment fraud and crypto fraud, establishes the origin and legitimacy of crypto assets and prepares expert reports for legal proceedings and compliance.
Your own situation
If you are reading this, you probably have a question about your own situation. That is exactly what Paucitas does.
The first step is contact by phone. You can book that call by phone or through the contact form, so you do not have to wait. In the call we look together at what can factually be established in your case and what Paucitas can examine for you.