UK AML reforms tighten oversight of crypto businesses by lowering change-in-control thresholds to 10%, expanding FCA “fit and proper” checks for controllers, and strengthening customer due diligence and trust registration requirements to reduce money‑laundering risk in crypto AML regulations.
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10% change-in-control threshold
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Broader FCA “fit and proper” test replaces beneficial owner test for controllers
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Stricter customer due diligence, trust registration and correspondent banking controls; National Risk Assessment highlights high exposure
UK AML reforms strengthen crypto AML regulations: new 10% notification threshold, expanded FCA oversight, and tougher due diligence—read how firms must adapt now.
What are the UK AML reforms proposed by HM Treasury?
The UK AML reforms propose lowering change-in-control notifications to a 10% threshold, broadening the FCA’s “fit and proper” tests for firm controllers, and tightening crypto AML regulations with enhanced customer due diligence and trust registration rules. The draft aims to close gaps identified in recent risk assessments.
How will the change-in-control threshold affect crypto firms?
The threshold drops from 25% to 10%, aligning with the Financial Services and Markets Act. This requires parties acquiring a 10% stake or significant influence to notify the FCA, increasing transparency in ownership and reducing opportunities for opaque control structures.
| Change-in-control notification | 25% | 10% |
| Controller assessment | Beneficial owner test | Broader “fit and proper” test |
Why is the FCA expanding the “fit and proper” test?
Expanding the test replaces the limited beneficial owner approach to capture complex ownership and influence. The broader test helps assess controllers’ integrity, competence and ability to prevent financial crime, addressing risks from layered corporate structures and service providers outside the UK.
When will the UK AML reforms take effect?
The Treasury is consulting on the draft until September 30, 2025, with a plan to finalize regulations for Parliamentary consideration in early 2026. Firms should use the consultation window to assess compliance gaps now.
What risks prompted these changes?
Recent reports—such as the National Risk Assessment of Money Laundering and Terrorist Financing and the Home Office Economic Crime Survey 2024—highlight the UK’s exposure due to an open economy, pooled accounts, trust-registration gaps and rising cyber-enabled fraud associated with crypto assets.
Frequently Asked Questions
How do the reforms change customer due diligence for crypto firms?
The draft tightens customer due diligence by clarifying identity verification expectations, endorsing digital ID guidance, and requiring more robust monitoring of high-risk relationships, especially those involving cross-border service providers.
Will trust registration and correspondent banking rules change?
Yes. The reforms propose clarifying trust registration obligations and imposing stricter correspondent banking restrictions to limit abuse of correspondent relationships for money laundering and to improve traceability.
Key Takeaways
- Lower threshold: Change-in-control notifications fall to 10%—increasing transparency.
- Expanded oversight: FCA’s broader “fit and proper” test targets complex ownership and controllers.
- Operational impact: Crypto firms must strengthen KYC, trust registration, and governance ahead of regulatory finalization in early 2026.
Conclusion
The draft HM Treasury measures tighten UK AML reforms with specific implications for crypto AML regulations, including a 10% notification threshold and tougher controller tests. Firms should review governance and compliance processes now and prepare responses for the consultation to reduce regulatory and operational risk.
Published: 2025-09-04 | Updated: 2025-09-04
Author / Organization: COINOTAG
