House edge: UK Gambling Commission issues another fine over money laundering failures

18 March 2021

The UK Gambling Commission has announced a £3.4m fine levied against In Touch Games Limited (In Touch) after uncovering a series of social responsibility, anti-money laundering (AML) and marketing failures.

In addition to the fine, and as a new licence condition, In Touch will have to expend additional sums to instruct auditors to ensure its policies and processes are in full compliance with the Gambling Commission’s Licence Conditions and Codes of Practice.

The Gambling Commission’s latest fine comes off the back of the announcement this week of the first criminal proceedings launched by the FCA in respect of offences under the Money Laundering Regulations 2007. This flurry of enforcement activity by regulatory bodies is indicative of a trend towards greater scrutiny of AML procedures across regulated sectors.

Key AML failures identified by the Gambling Commission included that In Touch failed to:

  • take into account the risk of allowing customers to use a payment provider that also acts as an exchange for cryptocurrencies;
  • conduct appropriate levels of enhanced customer due diligence; and
  • critically review source of funds information once it was requested.

The identification of failures in adequately addressing risk concerns regarding cryptocurrency exchanges is representative of increasing regulatory scrutiny of the cryptoasset industry. Firms in regulated sectors should expect to be challenged by regulators if their AML processes prove insufficiently robust in responding to the continuing growth in the use of cryptoassets by their customers.

Through our challenging compliance and enforcement activity we will continue our work to raise standards in the industry and continue to hold failing operators to account.