Providing crypto custodian services in the UK requires approval from the Financial Conduct Authority (FCA). This means following specific rules to ensure the safekeeping of digital assets and compliance with legal and regulatory standards. Companies must meet strict Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements to verify customer identities and report any suspicious activities.
At Buckingham Capital Consulting (BCC), we specialise in guiding crypto custodian service providers through the regulatory landscape. With over 12 years of experience, we help clients secure FCA authorisation smoothly and efficiently. Our team assists in developing comprehensive business plans, detailing business models, financial forecasts, and compliance measures, ensuring all aspects of AML and KYC are thoroughly addressed.
Beyond the initial application, BCC offers ongoing support with regular reporting, audits, and compliance checks to maintain adherence to FCA regulations. Our friendly and professional team is dedicated to making regulatory compliance straightforward and manageable, helping businesses navigate the complexities of the UK crypto regulatory environment with ease.
Why leading firms choose us as their partner.
"We engaged Buckingham Capital Consulting to assist us in developing our Anti-Money Laundering (AML) and Financial Promotions compliance framework for our crypto business. Their expertise in cryptoasset regulations, AML laws, and financial promotions compliance has been instrumental in helping us establish a robust framework to meet our compliance obligations with the FCA."
Our services for crypto custodian service providers
Buckingham Capital Consulting assists crypto custodian service providers in securing regulatory authorisation in the UK and Europe. Our expert team provides comprehensive support in compliance, operational setup, technology solutions, and financial management, ensuring your crypto business meets all regulatory requirements.
We guide crypto custodian service providers through the FCA registration process, ensuring compliance with all UK regulatory requirements. Our comprehensive support includes application preparation, detailed documentation, and direct liaison with the FCA, providing a seamless path to obtaining the license and operating successfully.
EU Authorisation
We assist crypto custodian service providers in obtaining authorisation across the EU, navigating the complexities of European regulations. Our services include drafting applications, providing regulatory advice, and ensuring ongoing compliance, enabling smooth market entry and operation within the European Union.
Compliance Services
We offer tailored compliance solutions for crypto custodian service providers, helping them adhere to all regulatory requirements. Our services encompass policy development, compliance audits, risk assessments, and ongoing advisory, ensuring operations remain compliant and reducing the risk of potential penalties.
Operational Support
We deliver ongoing operational support tailored to crypto custodian service providers, including risk management, internal controls, daily operational guidance, and assistance with setting up and managing bank accounts. Our expertise helps optimise efficiency, ensure regulatory adherence, and manage risks effectively, supporting sustainable growth and operational excellence.
Financial Management
We provide comprehensive financial management services, including financial reporting, accounting, and audits. Our team ensures crypto custodian service providers maintain accurate records and meet all financial regulations. By streamlining financial operations and enhancing transparency, we support compliance and promote business growth.
Financial Promotions Review and Approval
We offer financial promotions review and approval services for crypto custodian service providers. Our team ensures all promotional materials comply with regulatory standards, helping you avoid penalties and maintain a trustworthy market presence. By reviewing and approving your financial promotions, we can support your marketing and ensure compliance.
Feel free to reach out if you need something more bespoke or have specific requirements that aren't listed above. We're here to help and would love to discuss how we can support you.
Why Buckingham Capital Consulting
Whether its compliance, authorisation or something else, its about being part of your journey.
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Expertise from seasoned experts
Our team of seasoned professionals brings a wealth of expertise to the table. With years of industry experience, we offer tailored solutions and are committed to supporting you through every stage of your journey.
Comprehensive Regulatory Support
We provide a comprehensive range of regulatory consulting services, including financial reporting, audit, compliance, training, and financial crime. Count on us to manage your needs with seamless support.
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Since 2013, we've been at the forefront of assisting crypto custodian services providers in navigating the complex regulatory environment. Our services include licensing, compliance, and consulting, tailored specifically for the crypto industry across the United Kingdom and Europe. With deep knowledge of crypto regulations, we are well-equipped to guide businesses of all sizes through the evolving landscape, ensuring they meet all regulatory requirements and thrive in this dynamic sector.
Download our free guide on FCA registration and authorisation and how to ensure a successful outcome with your application.
Recent successful work
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Our People
Our team of regulatory and compliance experts brings together diverse backgrounds in banking, consulting, legal, financial, and regulatory sectors. This collective experience provides us with a comprehensive understanding of the unique challenges our clients face. When you choose to work with us, you’ll benefit from the personalised attention of seasoned professionals, often at the director level, ensuring you have direct access to senior experts. Our team combines robust regulatory knowledge with commercial insight, delving deep into your business to tailor unique solutions specifically suited to your needs. This approach ensures we address your challenges effectively and support your success.
Crypto custodian services licence guide
Introduction
Providing crypto custodian services in the UK involves adhering to specific regulations set by the Financial Conduct Authority (FCA). This guide provides detailed information on the necessary steps to obtain a license and operate legally, ensuring the security and legality of financial transactions.
Overview of Regulatory Requirements
The FCA oversees crypto custodian services to ensure they adhere to regulations designed to prevent financial crimes and protect consumers. Compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) is essential.
Licensing Process
1. Registering with the FCA
To legally offer crypto custodian services, you must register with the FCA. This involves:
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Completing the Application: Submit a detailed application via the FCA’s Connect system, including information about your business model, ownership structure, and compliance measures.
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Paying the Fee: The registration fee for cryptoasset businesses is £10,000.
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Providing Documentation: Include a comprehensive business plan, risk assessments, and evidence of AML and KYC procedures.
2. AML and KYC Compliance
The FCA requires stringent Anti-Money Laundering (AML) measures and Know Your Customer (KYC) procedures to combat financial crimes:
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AML Policies: Implement robust AML policies, such as transaction monitoring and suspicious activity reporting.
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KYC Procedures: Verify customer identities using reliable documents like passports and utility bills.
3. Data Protection Compliance
Adhering to data protection laws, such as the General Data Protection Regulation (GDPR), is crucial. Implement measures to protect customer data, including secure storage solutions and encryption.
Operational Requirements
Business Plan
Develop a detailed business plan that outlines your market analysis, operational plan, and financial projections. This plan should demonstrate your understanding of the market and your strategy for compliance and risk management.
Continuous Compliance and Reporting
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Regular Audits: Conduct regular internal and external audits to ensure ongoing compliance with regulatory requirements.
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Transparency and Reporting: Provide regular reports to the FCA on your business operations, financial status, and compliance measures.
Navigating the FCA Cryptoasset AML Application Process Successfully
Successfully navigating the FCA’s cryptoasset AML application process involves several critical steps to ensure compliance and readiness for approval. Here's a detailed breakdown of what you need to focus on:
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Detailed Application: Your application must be comprehensive, covering all required information about your business model, AML policies, and KYC procedures. This includes how you will verify customer identities, monitor transactions, and report suspicious activities.
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Appointing a Fit and Proper MLRO: You must appoint a Money Laundering Reporting Officer (MLRO) who has sufficient knowledge, experience, and training in handling cryptoasset-related technologies. The MLRO must be fully involved in preparing the application and demonstrate the ability to manage the specific money laundering and terrorist financing risks associated with your business model. The FCA will assess the MLRO’s fitness and propriety, including their probity and track record.
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Comprehensive Business Plan: Your business plan should include detailed descriptions of your business model, roles and responsibilities of key partners, sources of liquidity, customer journey, and flow-of-funds charts. It should also provide realistic financial forecasts, compliance oversight functions, and risk mitigation strategies. The business plan must not only focus on commercial aspects but also on compliance, risk management, and financial controls.
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Risk Assessment and Management: Conduct a thorough Business-Wide Risk Assessment (BWRA) tailored to your business model. This should identify and assess all inherent risks, including money laundering, terrorist financing, and proliferation financing. Your risk assessment methodology should outline how you identify, evaluate, and mitigate these risks.
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Policies, Systems, and Controls: Implement robust policies, systems, and controls to manage and mitigate the identified risks. This includes having adequate transaction monitoring procedures, blockchain analysis, and staff training programs. Ensure that your compliance measures are effective and up-to-date with the latest regulatory requirements.
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Customer Onboarding and Monitoring: Provide details of your customer onboarding process, including screening tools for sanctions, politically exposed persons, and adverse media. Maintain rigorous ongoing monitoring and transaction monitoring procedures to detect and escalate suspicious activity.
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Record-Keeping and Reporting: Establish procedures for accurate record-keeping and timely reporting of any changes in individuals attached to your firm or updates to policies and procedures. Ensure that your marketing materials are fair, clear, and not misleading, and comply with FCA rules on financial promotions.
The Travel Rule
From 1 September 2023, cryptoasset businesses in the UK must comply with the Travel Rule, which requires collecting, verifying, and sharing information about cryptoasset transfers. This aligns practices with those common in other financial services to prevent money laundering and terrorist financing.
Conclusion
Providing crypto custodian services in the UK requires meticulous planning, adherence to regulatory requirements, and a commitment to ensuring the safety and security of customer assets. By following this guide and consulting additional resources, you can navigate the regulatory landscape and build a successful and compliant crypto custodian service.