A taskforce convened by the Royal United Services Institute has warned that cryptocurrency laundering is a material risk for the United Kingdom ahead of its 2027 Financial Action Task Force mutual evaluation. The report, published on Friday, draws on discussions from private sector, law enforcement and civil society experts who met in September.
The FATF assessors are due to visit the UK in June 2027, but the country's mandatory statutory crypto regime will not take effect until October 25, 2027. The UK's report is expected to be agreed at the FATF plenary in February 2028. Taskforce members argued this timing leaves Britain unable to demonstrate adequate implementation during the on-site evaluation, and noted the UK has moved more conservatively than Hong Kong, the European Union and Singapore.
The report cites City of London Police data showing 66% of investment fraud in the UK involves crypto, and the 2025 National Risk Assessment rated crypto money laundering as high risk, up from medium in 2020. Over-the-counter brokers were identified as likely channels for hundreds of millions of dollars in laundering each year.
While the Metropolitan Police's £5.5 billion, around $7.3 billion, crypto seizure linked to a convicted Chinese money launderer was praised, the taskforce said that success has not been repeated widely and that enforcement has barely scratched the surface. The FATF is expected to test whether results match the risk rather than rely on a single headline case.
The report also warns that because the UK regime focuses on identifiable crypto firms, the highest-risk activity may be pushed outside the Financial Conduct Authority's perimeter. Law enforcement would then have to trace assets such as Tether's USDT, which a July 2025 Treasury report said had been extensively exploited by Russian-speaking laundering networks. The taskforce highlighted resource pressures on the UK Financial Intelligence Unit and economic crime policing as vulnerabilities, while praising international cooperation through Operation Destabilise.
More broadly, FATF said in July that nearly 93% of surveyed jurisdictions had yet to apply its standards to qualifying DeFi platforms, underscoring the global enforcement challenge.
