The UK government has launched a consultation on fast tracking amendments to the money laundering regulations as it seeks to target ‘specific weaknesses in the UK’s regime’.
Following a public consultation on improving the effectiveness of the money laundering regulations (MLRs) the government plans to bring forward the amendments to close regulatory loopholes, address proportionality concerns, and handle evolving risks relating to money laundering and terrorist financing.
The proposals include changes to customer due diligence, pooled client accounts, crypto asset regulation, and trust registration.
A new regulation in the MLRs could require crypto asset exchange providers to apply enhanced due diligence in correspondent relationships, aligning UK requirements for crypto asset businesses with recommendations from the Financial Action Task force.
HM Treasury is requesting feedback to its proposals from regulated firms, supervisors, other government departments and interested stakeholders by 30 September 2025.
The final statutory instrument is expected to be laid before parliament in early 2026 and will come into force 21 days after being made, with specific provisions for crypto asset businesses aligned to the commencement of the FSMA crypto asset perimeter.
