FCA proposes enhanced checks for personal wallets in crypto guidance

Britain's Financial Conduct Authority (FCA) has proposed enhanced checks on crypto transfers involving personal, or unhosted, wallets as good practice in nonbinding guidance. The FCA opened consultation CP26/38 on Oct. 23, seeking feedback on changes to its Financial Crime Guide until Dec. 24, 2026. The proposals focus on how firms assess transfers and manage financial-crime controls. Draft section FCG 3.2.8 suggests applying enhanced due diligence to transactions involving unhosted wallets. For transfers from personal wallets to UK firms, the guidance emphasizes the receiving firm's responsibility to verify the transfer. The guidance is nonbinding, and the FCA clarifies that it imposes no new requirements. It expects firms to consider the guidance when establishing controls, but departing from it does not constitute a breach of FCA rules. The proposals also address how firms determine risk scores and tracing rules, criticizing the use of third-party technology without clear justification. Existing duties under the UK Travel Rule require cryptoasset businesses to collect and share transfer information since Sept. 1, 2023. The FCA does not anticipate that the proposed updates will significantly increase compliance activity or consumer costs. The consultation includes firms supervised by the FCA for financial crime, including cryptoasset businesses under Money Laundering Regulations.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.