The U.K. Treasury department has announced a crackdown on bitcoin and other digital currencies amid growing concerns that they are being employed by criminals for money laundering and tax evasion.
The cryptocurrency has become widely popular in a relatively short space of time. Unfortunately, while it has many benefits to its use, it has also gained a reputation of being utilised by criminals. It is because of this that the Treasury is planning to regulate them, bringing them in line with anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
Labour MP John Mann, a member of the House of Commons Treasury select committee, who suggested MPs would look into the regulation of virtual currencies, said over the weekend to The Daily Telegraph that:
These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get left behind – that’s particularly important in terms of money laundering, terrorism or pure theft. It would be timely to have a proper look at what this means. It may be that we want to speed up our use of these kinds of thing in this country, but that makes it all the more important that we don’t have a regulatory lag.
News of this announcement reportedly saw the price of bitcoin drop from new highs of just under $12,000 to $10,600, on Sunday evening, reports ZeroHedge. According to the report, it appears that the Treasury is taking a leaf out of China’s book that will eventually force digital currency traders to reveal their identities and report suspicious activities.
Stephen Barclay, the Economic Secretary to the Treasury, stated:
The U.K. Government is currently negotiating amendments to the anti-money-laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation.
The rules are expected to come into effect next year.
This announcement comes at a time when bitcoin is experiencing a surge in value of late. Yesterday, it was within touching distance of reaching $12,000 for the first time, at $11,858, pushing its market cap to $198.2 billion. Naturally, though, with its price rising, so too is the amount of interest toward it. So much so, that Lee Nak-yeon, South Korea’s prime minister, believes it could lure children to illegal activities.
Interestingly, Mario Draghi, the president of the European Central Bank (ECB), has been reported in the past as stating that the rising value of the cryptocurrency market doesn’t pose a threat to central banks, and that bitcoin isn’t ‘mature‘ enough for regulation.
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