Government takes Steps to Tighten Bitcoin Regulation

News reports today indicate the UK government is intent on mounting a crackdown on bitcoin by introducing tighter regulation on the cryptomarkets.

The Treasury said it will regulate the digital money and bring it in line with current anti-money laundering laws and counter-terrorism financial legislation.

Reports suggest that under the EU-wide plan, online platforms that deal in bitcoin or other crypto currencies will be required to carry out due diligence with each customer and report suspicious transactions to the authorities. The main aim is to remove the anonymity criminals thrive on in the crypto economy.

A spokesperson for the Treasury said: “We have clear tax rules for people who use cryptocurrencies, and like all tax rules, these are kept under review.”

“We also intend to update regulation to bring virtual currency exchange platforms into anti-money laundering and counter-terrorist financing regulation.”

According to Nicholas Gregory, CEO of London-based CommerceBlock, this comes as good news for the bitcoin sector, as government attention is like a stamp of approval: “What some will bill as censure, the cryptocurrency community will deem a stamp of approval that finally recognises the pivotal role that digital currencies will ultimately hold for the global economy.

“It’s important to remember that bitcoin exchanges are already regulated as money service businesses in the US and that has failed to pour any cold water on bitcoin’s incredible growth story.

“That’s why any suggestion that bitcoin is used by money launderers any more than traditional currencies is a fallacy.

“The UK and Europe are playing catch up to some degree here but they are on the right page. Industry players want the same thing as politicians – cryptocurrencies that offer cheap, frictionless, international transactions used for legal purposes.

“If anything, regulation will only increase bitcoin’s rate of growth as regulation lends credibility and engenders trust.”