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The UK government has withdrawn its plan to collect data on transactions sent to a private or unhosted crypto wallet.

Treasury made the disclosure in an AML/CFT consultation report stating that it would not implement the proposed data collection. He said comments received after a July 2021 document announced the proposed rule informed his decision.

Crypto Asset Tracking

The Treasury, in July 2021, published a document that sought to compel crypto companies and individuals to collect personal data from transacting parties. This move was to guard against illicit transactions and implement KYC on crypto asset transfers.

“Crypto-asset companies will need to implement systems to ensure that the personal information of the originator and beneficiary of a crypto-asset transfer is transmitted and received along with the transfer, in an appropriate format,” the Treasury said in the document.

The proposed rule would have required crypto exchanges and users to collect data on any transactions between non-hosted parties.

However, in the recently published document, the Treasury made it clear that it would not go ahead with the proposal.

The Treasury in the document said: “Instead of requiring the collection of beneficiary and originator information for all non-hosted wallet transfers, crypto-asset companies are only expected to collect this information for transactions identified as posing a risk. high level of illicit financing”.

Despite the change, the new rule only shifts the burden of collecting personal information data to the crypto asset company facilitating the transaction. In addition, companies must collect data for “transactions identified as presenting a high risk of illicit financing.”

In addition, when the company cannot verify the identity of the beneficiary or the sender, it has the discretion to reject, suspend or allow the transaction.

FATF Compliance

The imposition of the rule is the UK’s attempt to implement AML/CFT standards under the Financial Action Task Force (FATF).

According to the FATF, disclosure of the identities of transacting parties is part of the AML/CFT standards. This informed Treasury’s previous decision to force data collection “regardless of the technology used to facilitate the transfers.”

As it stands, only crypto institutions facilitating such transfers are required to collect personal data.

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This post UK spins KYC rule

was published first on https://cryptoslate.com/the-u-k-makes-a-turnaround-on-kyc-rule/

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