Two-thirds of UK crypto firms skip vital ‘know your business’ checks

A recent study has revealed that two-thirds of crypto firms in the UK are failing to verify the credentials of the financial firms they conduct business with.

The research from anti-money laundering software firm SmartSearch reveals that, out of 500 financial institutions it surveyed in the UK, ranging from crypto firms, gaming outlets, and banks, only 28% often carry out verification checks.

In addition, the research found that 70% of high street banks, 56% of challenger banks, half of casinos, and over half of property developers also failed to carry out verification checks. 

SmartSearch’s managing director Martin Cheek stressed, “While Know Your Customer checks are a well-established part of compliance, know your business is just as critical, enabling firms to assess the risk posed by new business customers.”

Read more: Nomo Bank latest in UK to block Binance payments

Cheek added, “Firms across financial services have long been seen as the gatekeepers of the UK’s financial system. Without these fundamental verification checks, it’s impossible to not only fulfill this responsibility, but to protect their businesses from illicit funds and financial crime.”

At the start of this year, the UK Government reported that 85% of crypto firms applying for a license through the Financial Conduct Authority (FCA) failed to meet requirements laid out under anti-money laundering and counter-terrorist financing regulations.

The FCA says firms are required “to update their records relating to the beneficial ownership of corporate clients. Firms also need to understand the ownership and control structure of their corporate customers, and record any difficulties encountered in identifying beneficial ownership.”

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