The FCA will use the information garnered from the reports to assess the risks that are associated with financial crimes. This will enable them to direct their resources to the areas where the greatest risk is identified.

The UK financial regulatory bodies already regulate other cryptocurrencies such as Bitcoin, Ethereum and Litecoin among others. The FCA has prompted all crypto firms to submit their data regardless of the revenues accrued. It further added that the activities conducted by these firms were operating in an environment that had a higher risk for money laundering activities.

The FCA’s move comes at a time when the popularity of crypto assets is increasing. The regulator highlights their belief that the risk for these assets being used for criminal activities is also rising.

This is furthered by the fear that some of these assets being bought and sold for money laundering or to fund terrorist organizations.

The FCA is also under a lot of pressure to introduce guidelines that will also protect the UK consumers of digital assets. Currently, this body only regulates the firms but the consumers have minimal or no protection against the fraudulent schemes that are being witnessed among crypto firms across the world.

The new regulations provided by the FCA will also affect other organizations that offer Multilateral Trading Facilities (MTF), Organized Trading Facilities (OTF) and those that offer electronic currencies. These institutions include banks, building societies and firms dealing with MiFID activities.