Bitcoin to face tighter regulation under British government crackdown

Bitcoin to face tighter regulation under British government crackdown

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The British government is mounting a crackdown on the virtual currency Bitcoin amid rising concerns about money laundering and tax evasion.

The British Treasury has said it intends to regulate the digital currency to bring it in line with anti-money laundering and counter-terrorism financial legislation. Under the EU-wide plan, online platforms where Bitcoins are traded will be required to carry out due diligence on customers and report suspicious transactions.

The move is designed to end the anonymity which has made the currency attractive to criminals. Parts of the NHS and other organisations around the world were brought to a standstill earlier this year by hackers who demand ransoms paid in Bitcoin to unlock their computers.

A British Treasury spokesman said: “We have clear tax rules for people who use crypto-currencies 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.”

Ministers now expect the EU-level negotiations to conclude early in 2018. Labour MP John Mann, a member of the Commons Treasury Committee, said it would probably now want to look into the regulation of virtual currencies.

He told The Daily Telegraph: “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 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.”

The plan to regulate Bitcoin was originally set out by British Treasury minister Stephen Barclay in a little-noticed Commons written answer in November.

Mr 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.

“The Government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017/early 2018.”

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