The 2025 Money Laundering Regulations: What Compliance Teams Need to Know

The 2025 Money Laundering Regulations: What Compliance Teams Need to Know

The UK’s Money Laundering Regulations 2017 are evolving again. The 2025 updates introduce some of the most significant changes in recent years, reflecting regulators’ focus on risk-based compliance, transparency, and adaptation to new financial technologies.

If your organisation handles financial transactions, client funds, or emerging services such as cryptoassets, understanding these changes is essential. Ignoring them could mean costly fines, reputational damage, or even criminal liability.

Here’s a detailed guide for compliance teams on the key reforms and what they mean in practice.

1. New Customer Due Diligence (CDD) Thresholds

Customer Due Diligence (CDD) lies at the heart of anti-money laundering (AML) compliance. The 2025 regulations have revised the monetary thresholds that determine when businesses must carry out identification checks, risk assessments, and ongoing monitoring.

Why it matters:

• Transactions previously considered low-risk may now require verification.

• Businesses must consider both single and cumulative transactions when assessing thresholds.

• Failure to meet CDD obligations can lead to regulatory investigations or financial penalties.

Practical implications for your organisation:

• Update your onboarding procedures to reflect new thresholds. For example, new rules may mean enhanced checks for clients depositing or transferring amounts previously exempt.

• Train front-line staff to recognise high-risk situations, particularly in sectors prone to fraud or complex ownership structures.

• Consider integrating automated CDD systems to streamline checks while reducing human error.

2. Pooled Client Accounts and High-Value Transactions

The updated regulations place more emphasis on pooled client accounts and the monitoring of high-value transactions. Pooled accounts, where multiple clients’ funds are held together, can be vulnerable to misuse if not properly tracked.

Key changes:

• Enhanced requirements to maintain detailed records of each client’s funds.

• Clearer obligations for detecting unusual or suspicious transactions within pooled accounts.

• Revised definitions of “high-value” transactions, impacting reporting obligations.

Practical steps for compliance teams:

• Implement robust internal controls to track all individual client contributions and withdrawals.

• Adjust your monitoring systems to flag transactions exceeding new high-value thresholds.

• Ensure audit trails are thorough – regulators increasingly focus on whether organisations can demonstrate how funds were handled.

Top tip: A risk-based approach helps prioritise oversight where it matters most, particularly in pooled accounts that aggregate large sums from multiple clients.

3. Cryptoasset Service Providers

For the first time, cryptoasset businesses are explicitly included in the regulations. This reflects the UK’s growing focus on regulating digital assets to prevent money laundering and terrorist financing.

Who’s affected:

• Crypto exchanges and brokers

• Wallet providers and custodial services

• Platforms facilitating crypto payments or transfers

Key compliance obligations:

• Registration with the relevant supervisory authority, such as HMRC.

• Conducting thorough CDD for all clients, including enhanced checks for higher-risk accounts.

• Monitoring transactions for suspicious activity and reporting through standard channels.

Practical implications:

• Firms must adapt traditional AML frameworks to digital asset flows.

• Staff training is critical, as crypto transactions can be complex and difficult to trace.

• Policies and procedures should cover emerging risks such as decentralised finance (DeFi) transactions or peer-to-peer transfers.

Top tip: Even if you’re a small provider, regulators expect a robust, proportionate framework — don’t wait until issues arise to update your processes.

4. Expanded Trust Registration Requirements

The 2025 updates expand trust registration obligations, reflecting regulators’ concerns about hidden beneficial ownership and complex legal structures being used for money laundering.

Key changes:

• More trusts are now required to register with HMRC, including certain express and discretionary trusts.

• Information on beneficial owners must be kept current and accurate.

• Registration deadlines and penalties are stricter than before.

Practical implications:

• Review all trusts under your management to ensure they are correctly registered.

• Update internal record-keeping systems to maintain accurate beneficial ownership data.

• Train legal, finance, and compliance teams to manage reporting obligations and deadlines effectively.

Top tip: Early preparation avoids last-minute compliance scrambles and reduces the risk of fines or reputational damage.

5. Shifts in Supervisory Expectations and Enforcement

Regulators are signalling a more proactive and risk-focused approach to AML supervision in 2025. Enforcement isn’t just about fines — it’s about demonstrating that your business has a culture of compliance embedded throughout operations.

What’s changing:

• Greater scrutiny of risk-based approaches to CDD, transaction monitoring, and internal controls.

• Increased use of supervisory visits, audits, and data requests.

• Stronger focus on emerging risks, including digital assets and complex client structures.

Practical advice for compliance teams:

• Adopt a risk-based approach and document your rationale for decisions.

• Conduct regular internal audits to ensure policies and procedures are followed.

• Invest in staff training — regulators expect all levels of an organisation to understand Anti-Money Laundering (AML) responsibilities.

Top tip: Compliance culture matters as much as compliance processes. Leadership involvement signals to regulators that the business takes its obligations seriously.

6. 2025 Compliance Checklist for Businesses

Here’s a practical checklist to help your organisation prepare:

• Review and update CDD policies to reflect new thresholds.

• Strengthen monitoring of pooled client accounts and high-value transactions.

• Ensure cryptoasset activities are registered and compliant.

• Audit trust registrations and beneficial ownership records.

• Train staff in the latest best practice on Anti-Money Laundering (AML), Anti-Bribery and Corruption, Anti-Fraud, Market Abuse Regulation, Conflicts of Interest, and Criminal Finances Act and Tax Evasion

• Review internal controls, reporting lines, and audit trails for robustness.

• Embed a risk-based compliance culture across your organisation.

Conclusion

The 2025 updates to the Money Laundering Regulations are a reminder that AML compliance is dynamic, complex, and essential.

By reviewing policies, updating processes, and embedding compliance into everyday business operations, organisations can reduce risk, avoid penalties, and maintain trust with clients, partners, and regulators.

Staying informed and proactive isn’t just about avoiding fines — it’s about building a resilient, trustworthy, and future-ready organisation.

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