Financial crime regulatory developments: September 2026

Summary: the FCA has secured the recovery of funds for victims of a cryptocurrency investment fraud through confiscation orders obtained against the perpetrators. Between February 2017 and June 2019, at least 65 investors were defrauded and lost more than £1.5 million through a fraudulent crypto investment scheme. The perpetrators were each sentenced to more than five years' imprisonment for their roles in the scheme.

Impact: the case reinforces the FCA’s enforcement focus on crypto-asset fraud, including the use of confiscation orders to recover funds for victims. Firms should consider whether their financial crime controls appropriately capture emerging crypto-related fraud and associated money-laundering risk.

Link: FCA secures money back for victims of crypto fraud | FCA

Summary: an FCA survey highlighted an increase in suspected money mule accounts, which are used to launder the proceeds of crime through the financial system. The regulator found that criminals often move fraudulent funds through multiple accounts, with funds frequently withdrawn between the second and fifth accounts in the payment chain, making detection and tracing more difficult. The FCA also highlighted common warning signs of money mule activity, including unsolicited job offers and requests for access to sensitive financial information. Card payments were identified as the most common cash-out method, often involving numerous low-value transactions that can resemble legitimate consumer spending. The survey further found that retail banks processed the majority of mule-account transactions, while other firms generally experienced lower volumes but higher-value payments. 

Impact: the findings reinforce the need for firms to maintain effective transaction monitoring, fraud prevention and customer due diligence controls to identify and disrupt money mule activity before illicit funds are withdrawn or transferred beyond recovery. Firms should also consider opportunities to strengthen information-sharing to support earlier identification and disruption of suspected mule activity.

Link: Firms crack down on money mules but need to do more | FCA

Summary: the FCA published an update on its planned takeover of AML supervision for:

• Legal service providers
• Accountancy firms
• Trust and company service providers

The reform is expected to reduce the UK's AML supervisory structure from numerous professional body supervisors and HM Revenue and Customs (HMRC) to a more centralised model with FCA supervision beginning from late 2028 and transitioning through to 2030.

Impact: firms currently supervised by professional body supervisors or HMRC should monitor developments and consider the implications of the proposed transition to a more centralised AML supervisory framework under the FCA from late 2028 onwards.

Link: Anti-money laundering supervisory reform | FCA

Summary: Steve Smart, the executive director of enforcement and market oversight made a speech at the Law Society’s Economic Crime Conference. He highlighted the growing threat of financial crime, including fraud, money laundering and the misuse of new technologies.

The FCA stressed that firms, regulators and law enforcement must work together through effective information sharing and intelligence-led approaches. The speech also reaffirmed the FCA's intention to take a risk-based supervisory approach, focusing on firms that facilitate financial crime while reducing unnecessary burden on compliant firms.

Impact: the speech reinforces the FCA's focus on the effectiveness of firms' financial crime controls and outcomes, rather than procedural compliance alone and highlights the importance of effective information sharing between firms, regulators and law enforcement.

Link: Financial crime: protecting the hive | FCA

Summary: the FCA has published PS26/18: Crypto-asset Perimeter Guidance, providing clarity on the scope of the UK's future crypto-asset regime and the activities that may require FCA authorisation. The guidance covers stablecoin issuance, crypto-asset trading platforms, dealing and arranging activities, safeguarding crypto-assets and crypto-asset staking arrangements. The new regime will take effect on 25 October 2027.

Impact: firms have greater clarity on how the new regime will apply to their business, enabling them to assess regulatory impact and prepare for implementation ahead of the regime coming into force in October 2027. Firms intending to undertake in scope activities can apply for authorisation from 30 September 2026.

Links: Crypto firms get guidance on how the new regime applies | FCA PS26/18: Cryptoasset perimeter guidance | FCA

Summary: the FCA has continued its crackdown on illegal crypto trading, working with HMRC and the Metropolitan Police Service to target three London premises suspected of conducting illegal peer-to-peer crypto trading. The operation forms part of the FCA's wider efforts to tackle unauthorised cryptoasset activity and reduce the risk of financial crime within the sector.

Impact: the FCA's continued enforcement action reinforces expectations that firms conducting cryptoasset activities comply with applicable regulatory requirements and maintain effective controls to mitigate money laundering and other financial crime risks.

Link: FCA and partners continues crackdown on illegal crypto trading | FCA

Summary: the UK Government (Home Office) published the anti-money laundering and asset recovery strategy 2026-2029, setting out the UK's AML priorities for the next three years. The strategy aims to strengthen the UK's response to money laundering through a more targeted, intelligence-led approach focused on disrupting criminal activity, improving information sharing and increasing asset recovery.

Impact: the strategy signals continued emphasis on intelligence-led AML controls, information sharing and suspicious activity reporting, reinforcing the important role firms play in identifying, preventing and disrupting money laundering.

Link: Anti-money laundering and asset recovery strategy: 2026 to 2029 - GOV.UK

Summary: the Financial Action Task Force (FATF) has published a report examining the role of underground banking, Hawala Networks and Other Similar Service Providers (HOSSPs) in professional money laundering. The report notes that while these informal value-transfer systems can support legitimate remittance and financial services, they are increasingly being exploited by criminal networks to move and conceal illicit proceeds.  FATF found that such networks are becoming more sophisticated and are now linked to a wider range of crimes, including fraud, cybercrime, corruption, tax evasion and terrorist financing, rather than just traditional cash-based offences.

Impact: firms should be aware of the increasing use of underground banking and hawala networks to facilitate money laundering and consider whether existing customer due diligence and transaction monitoring controls are sufficient to identify and mitigate these risks.

Link: New FATF report finds underground banking and hawala are key channels for professional money launderers

Summary: the Financial Action Task Force (FATF) has published new risk indicators highlighting the growing money laundering, terrorist financing and proliferation financing risks within the gaming and gambling sectors. The report identifies illegal gambling as a significant global risk and warns that criminals are increasingly exploiting online gambling platforms, e-wallets, mobile money and virtual assets to move illicit funds, while taking advantage of regulatory differences across jurisdictions and complex ownership structures to evade detection. The findings are intended to help public and private stakeholders identify, assess and respond to suspicious activity. 

Impact: firms should be aware of emerging ML, TF and PF risks associated with the gaming and gambling sectors and consider whether their customer due diligence, transaction monitoring and risk assessment frameworks adequately identify and mitigate these risks.

Link: FATF warns of emerging risks in gaming and gambling and publishes new risk indicators