A report by the U.K. Treasury highlighted that crypto-asset companies were considered to be at significant risk for exploitation in money laundering activities between 2022 and 2023. Data provided by the Financial Conduct Authority (FCA) revealed that crypto firms were among the top four types of companies vulnerable to financial crimes like money laundering, alongside retail banking, wholesale banking, and wealth management firms.

The report indicated that there were 52.8 full-time specialists dedicated to Anti-Money Laundering oversight, with nearly one-third of them focused on supervising crypto enterprises. The FCA's financial crime experts conducted a total of 231 reviews of financial institutions in the U.K. during this period, in addition to handling 375 cases related to financial crimes and sanctions.

As part of intensified supervision efforts, FCA teams launched 95 cases into British crypto enterprises to ensure compliance with regulations. To enhance regulatory clarity, the U.K. Treasury announced plans to introduce a comprehensive framework for crypto assets and stablecoins by July 2024.

Furthermore, the U.K. National Crime Agency and police were granted expanded authority to seize and destroy criminal crypto assets without the need for arrests. Law enforcement now has the power to confiscate items that could assist in investigations, remove detrimental crypto assets from circulation, and transfer seized illicit cryptocurrency to controlled wallets. Victims of crimes involving crypto assets can also seek to recover funds from their accounts under the new laws.