The UK’s financial regulator has warned companies in the crypto sector that it expects them to comply with sanctions imposed against Russia and Belarus, in the Financial Conduct Authority’s (FCA) latest clash with the cryptocurrency industry.
“We are working closely with partners in government and law enforcement both here and abroad, including regulatory authorities, to share intelligence and act to prevent sanctions evasion, including through crypto assets,” the FCA said.
The statement goes on to say: “We also remain ready to act in the event of sanctions breaches.”
There have been concerns from the regulatory body that cryptocurrency technology could be used by Russians to get around existing economic sanctions levied against it for its ongoing invasion of Ukraine.
The FCA has stated it does not differentiate between cryptoassets and any other assets, therefore it considers circumventing economic sanctions with crypto illegal under the Money Laundering Regulations (MLRS) and the Anti-Money Laundering Act of 2018.
The joint statement from the FCA, the Bank of England and the Office of Financial Sanctions Implementation says the institutions “remain ready to act in the event of sanctions breaches.”
The FCA has written to all crypto firms registered in the UK with a warning of action if they “see authorised financial institutions supporting cryptoasset firms operating in the UK illegally.”
The statement also warns consumers from participating in financial transactions with crypto firms not registered with the FCA.
The European Commission has said it is looking into the possibility of crypto being used to avoid economic sanctions against Russia.
The FCA has recently been clashing with various firms in the crypto sector, including Binance, which regained the ability to operate in the UK, despite concerns expressed by the financial watchdog.
Binance recently announced it was refusing to impose blanket sanctions on all Russian users, despite maintaining that it would follow all international law regarding sanctions.