UK crypto industry urged to close ‘loopholes’ that let Russia avoid sanctions
Unregulated crypto firms in the UK are facing calls to close ‘loopholes’ which allow Russians to evade sanctions.
Industry body Crypto UK said it is engaged in discussions with the Treasury and MPs about the possible use of digital assets to evade economic sanctions. In a letter Crypto UK urged unregulated firms not to become a “loophole for sanctioned Russians” and to freeze or block illicit transactions.
“As many of you know, we have a two-tier system in the UK where only 34 crypto companies hold a licence from the FCA covering anti-money laundering,” wrote Ian Taylor, the head of Crypto UK.
“A further 150 companies are unregulated and under no obligation to comply with sanctions measures. We would urge unregulated members to take action to ensure your platforms do not become a loophole for sanctioned Russians,” he continued.
The comments come after Ukraine’s vice prime minister called on crypto exchanges to block Russian and Belarusian users.
“I am asking all major crypto exchanges to block addresses of Russian users,” wrote Mykhailo Fedorov on Sunday. “It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”
The world’s largest crypto exchanges, including Binance and Kraken, have resisted calls for a blanket ban on Russian users, but have signalled their support for sanctions targeting individuals.
The UK’s financial regulator and Treasury are piling pressure on crypto firms in the UK to ensure that sanctions are enforced. The FCA told City PM it has has written to crypto firms spelling out their responsibilities when it comes to enforcing sanctions and the Treasury is working with government departments and multinational partners to clamp down on the use of crypto to evade sanctions.
Read more: UK regulators pressure crypto firms to enforce Russian sanctions