UK Treasury Seeks AML Case Studies Ahead of FATF Review Amid Crypto and AI Risks

Headline: UK Treasury asks banks and law firms for “feelgood” anti-money-laundering case studies as crypto and AI risks rise The Treasury has launched a rapid call for evidence asking bankers, lawyers and other City firms to hand over real-world examples that show how they have stopped dirty money from entering the UK. Ministers want concrete case studies to demonstrate that the country’s anti-money-laundering (AML), counter‑terrorist‑financing and sanctions systems are working in practice — a message they plan to include in their submission to the global watchdog later this year. The push comes as the UK prepares materials for the Financial Action Task Force (FATF). The government must submit its evidence packet by October; FATF examiners will then conduct an on-the-ground review in the UK next summer as part of the FATF’s mutual evaluation process that culminates in 2027. Officials are racing to compile examples that show the City has “upped its game” since its poor FATF assessment in 2018, which fed perceptions of London as a haven for “dirty money.” Officials are under pressure. The National Crime Agency has estimated that some £100bn is laundered through or within the UK each year, with legal and financial services sometimes providing the conduit for fraudsters, traffickers, the illegal drug trade and other organised crime. The UK’s national risk assessments have repeatedly labeled the legal sector “high risk” since 2017. Rating agency Moody’s has warned that the scrutiny is intensifying as the UK approaches the FATF review. Moody’s noted that “billions are spent each year in the UK on supervision with hundreds of firms refused entry to the financial system following due diligence, yet an estimated £100bn is still laundered annually,” and said FATF examiners will question how much risk the UK’s controls and enforcement are actually reducing. The Treasury’s request asks firms to submit cases from 2022 onward that show they refused to onboard or actively dumped potentially high‑risk clients, or where a firm’s intervention later prompted a state investigation or prosecution. The call also seeks examples where detection of red flags led firms to change the types of clients they accept or to adjust their controls. Ministers are particularly conscious of evolving threats. The government singled out the rise of AI-enabled investment fraud and the growing use of cryptocurrencies — tools that can obscure transaction origins — as new challenges for AML systems and enforcement. A Treasury spokesperson said: “We take firm and coordinated action across government and industry to crack down on economic crime. We have introduced new strategies, enhanced enforcement capabilities and increased funding designed to disrupt those seeking to abuse the UK economy. As you would expect, the government regularly engages with industry on this — and preparations for the FATF assessment in 2027 are no different.” Why crypto watchers should care: the FATF review could shape future UK AML expectations for virtual asset service providers and other crypto-related businesses. The Treasury’s evidence-gathering is a sign that London wants to show tangible improvements, but international examiners will be looking for measurable outcomes — not just anecdotes — as the UK seeks to counter the claim that it remains an attractive jurisdiction for laundered funds.