World Economy

UK Gov’t Plans Bitcoin Crackdown

The UK Treasury The UK Treasury

The UK government is looking to step up regulation of Bitcoin amid concerns criminals are using cryptocurrencies to launder money and avoid taxes.

Britain wants to increase regulation of Bitcoin and other digital currencies by expanding the reach of European Union anti-money-laundering rules that force traders to disclose their identities and report suspicious activity, Reuters reported.

With demand for Bitcoin surging, fuelling a 1,000% rally in its value so far this year, the British finance ministry said it expected negotiations over changes to the EU rules would conclude later this year or in early 2018.

Stephen Barclay, economic secretary to Britain’s Treasury, told parliament in a notice dated Nov. 3—but only reported by media on Monday—that the amendments “bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation.”

That would mean those companies would be overseen by national competent authorities, the statement said.

Bitcoin currently works by anonymous trading, which has fuelled fears that it could be an attractive way of funding illegal activity. A rise of 1,000% in value this year has worried MPs and banks alike.

Speaking to The Telegraph, treasury select committee member John Mann said he expects the government to carry out an inquiry over regulating digital currencies.

“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”, he said.

“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 things in this country, but that makes it all the more important that we don’t have a regulatory lag.”

Bitcoin hit record highs of $11,879 on Sunday night, before dropping to $11,253 on Monday morning, according to online cryptocurrency trading platform Coin Exchange.

The main US derivatives regulator said on Friday it would allow CME Group Inc and CBOE Global Markets Inc to list Bitcoin futures contracts, opening the door to added regulation.

Australia has also said it would strengthen its money-laundering laws by bringing Bitcoin providers under the government’s financial intelligence unit.

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