According to a taskforce convened by the Royal United Services Institute, published Friday, crypto poses a 'material risk' to the UK ahead of its 2027 Financial Action Task Force evaluation. The UK's full crypto regulatory regime takes effect on October 25, 2027, but FATF assessors are due to visit in June, creating a timing conflict during the transition period.

The report cites data showing 66% of UK investment fraud involves crypto, with the City of London Police flagging the sector as high-risk for money laundering. The taskforce also highlighted over-the-counter brokers as a key gap, noting the National Crime Agency estimates they launder hundreds of millions annually, and warned that the UK's regulatory focus on identifiable crypto firms risks pushing the highest-risk activity outside the FCA's oversight and onto law enforcement.

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