Financial crime regulatory developments: August update

Summary: This article summarises the UK Government’s response to the consultation on amending the Money Laundering Regulations as part of the Economic Crime Plan 2023–26. It outlines key reform areas relevant to accountants, including:

• CDD and risk-based approach: Enhanced due diligence (EDD) rules clarified for high-risk third countries and complex transactions.
• Trust registration and transparency: All non-UK trusts holding UK property acquired before October 2020 must now register with HMRC.
• Company formation and beneficial ownership: The sale of off-the-shelf companies will now be a regulated activity.
• Crypto assets and emerging risks: Accountants advising clients in the crypto space must ensure providers are properly registered and monitored.

Impact: A draft statutory amendment to the UK Money Laundering Regulations will be introduced later in 2025. Firms should prepare for technical consultations and updated sector-specific guidance.

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Summary: This article explores the growing threat of money mules in the UK. Key takeaways include:

• APP fraud: Accounts receiving fraudulent funds are often controlled by fraudsters.
• Exploitation of newer institutions: Digital banks and payment firms are frequently targeted due to weaker financial crime controls.
• Ecosystem-wide response: The variety of destinations and methods used to move funds highlights the need for all parts of the payments ecosystem—including smaller firms and crypto providers—to engage in data-sharing initiatives.

Impact: Digital banks and payment firms should ensure that risk indicators related to money mules are reflected in their business-wide risk assessments. They should monitor unusual behaviour (e.g. rapid fund movement) and engage in real-time data sharing with law enforcement and other financial institutions.

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Summary: The FCA received 4,465 reports of fake FCA scams in the first half of 2025, with 480 victims tricked into sending money to fraudsters. Common scam tactics included false legal threats, crypto recovery scams, and loan scam follow-ups. The FCA has reiterated that it will never ask for money transfers or sensitive banking details such as PINs or passwords.

Impact: Firms should verify any suspicious communications by contacting the FCA directly via their online contact form. They are also reminded not to share sensitive information.

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Summary: The Wolfsberg Group’s second statement encourages financial institutions to move from outdated, rules-based transaction monitoring to more effective, intelligence-led systems using AI and machine learning. It emphasises the need for improved governance, transparency, and collaboration to enhance the quality of suspicious activity reporting and align monitoring with real-world financial crime risks.

Impact: Firms are encouraged to modernise their transaction monitoring systems by adopting AI and machine learning to improve the detection of suspicious activity.

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Summary: This toolkit is designed to help countries conduct effective National Risk Assessments (NRAs). It can be adapted to suit different risk profiles and contexts. The toolkit includes:

• Annex A: Quick guides for complex areas such as corruption, virtual assets, legal persons, and the informal economy.
• Annex B: Aggregated data from 59 Mutual Evaluation Reports identifying common predicate offences and money laundering typologies.
• Annex C: A package of NRA tools, including templates, methodologies, and examples.

Impact: The FATF toolkit supports countries in contextualising and tailoring their National Risk Assessments using practical tools and data-driven insights.

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