FCA proposes personal-wallet checks in nonbinding crypto guidance
The nonbinding consultation lists unhosted-wallet due diligence as good practice and criticizes unexplained third-party scores and rigid tracing rules. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Britain's Financial Conduct Authority has proposed treating enhanced checks on crypto transfers involving personal, or unhosted, wallets as good practice in nonbinding guidance. It also criticizes firms that cannot explain the risk scores they use.
The regulator opened consultation CP26/38 on Oct. 23, seeking feedback on changes to its Financial Crime Guide until Dec. 24, 2026. The proposals address how firms assess transfers and operate their financial-crime controls.
Related ReadingDraft section FCG 3.2.8 lists applying enhanced due diligence, meaning more intensive checks, to transactions involving unhosted wallets as a good-practice example. For someone moving crypto from a personal wallet to a UK firm, the proposed example concerns how the receiving firm checks that transfer.
The proposed guidance is nonbinding. The FCA says the Guide contains no rules and imposes no new requirements, although it expects firms to read and consider it when establishing effective controls. Departing from the guidance would not, by itself, establish a breach of FCA rules.
The monitoring proposals also address how firms reach those decisions. Draft FCG 3.2.5 identifies as poor practice using third-party technology without being able to explain or evidence the basis of its findings or scoring.