UK & EU To Introduce New Legislation To Address Bitcoin Concerns
The European Union (EU) and the United Kingdom (UK) are poised to come down hard on Bitcoin trading to address the growing fears and reports concerning crimes being committed with the cryptocurrency.
Currently, Bitcoin trades on countless smaller exchanges. This means that transactions and trades go through very little regulation compared to transactions carried out in bigger exchanges.
Bitcoins value has gone through the roof this year and crossed the $11,000 mark.
This significant spike in the last 11 months has forced the EU and the UK to make amendments to Bitcoin and cryptocurrency regulations and get them on the same page with anti-money laundering and counter-terrorism rules that other financial transactions must follow.
One of the biggest threats that Bitcoin and other cryptocurrencies pose is the anonymity associated with it. Cryptocurrency exchanges protect the identity of its traders, which makes it easier for financial crimes to be committed and for traders to get away with suspicious activity.
This is why the EU-wide plan will mandate governments to enact or amend laws to force online platforms trading in cryptocurrency to follow financial regulations and be more diligent in reporting suspicious transactions. Cryptocurrency traders will now also be required to disclose their identities in response to the growing fears that the cryptocurrency is being used to finance drug dealings and other illegal transactions.
As of now, there is little evidence to suggest that cryptocurrency is being used for money laundering schemes but this risk is expected to grow. However the volatility of Bitcoin’s price, has been seen by many financial experts as highly unreliable and unsettling. Lloyd Blankfein, chief executive of Goldman Sachs went as far as to call Bitcoin a vehicle to perpetrate fraud.
With Bitcoin growing by more than 1000 percent in 2017, countries have no option but to amend their financial regulations and address Bitcoin and the cryptocurrency market. The UK Treasury had already started discussing amendments to the current anti-money- laundering regulations to put Bitcoin under the national financial jurisdiction.
Stephen Barclay, economic secretary of the Treasury answered a written question from Labor member Chris Evans in October. The question was related to the department’s efforts to regulate the cryptocurrency market.
In a statement, Barclay said
The UK government is currently negotiating amendments to the 4th Anti-Money Laundering Directive that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas.
According to Barclay, the government is in full support of the amendments they are trying to introduce. Changes are expected to be implemented in early 2018.