Bitcoin has always been associated with various types of illegal activity. One of the claims which is repeated quite often is that the world’s leading cryptocurrency is regularly used to launder money. So far, there has been very little evidence to back up such allegations. Regardless, the UK Treasury is growing increasingly concerned over this possibility, and it aims to regulate Bitcoin in the near future.
UK Treasury Worries About Bitcoin
In a way, it is anything but surprising to learn the UK Treasury has been keeping close tabs on Bitcoin and other cryptocurrencies. As one would expect, the main concern is the potential to launder money or evade taxes when using Bitcoin. Right now, there is no official taxation guideline for Bitcoin in the UK, nor is there any official regulation whatsoever. That situation may change in the very near future.
To address these concerns, the UK Treasury plans to introduce new Bitcoin-related regulations. It is a bit unclear what they will entail, though. According to The Telegraph, the goal is to require users and traders to disclose their identities and report suspicious activity. Considering how most Bitcoin exchanges already adhere to existing KYC and AML laws, this proposal is causing even more confusion right now.
Although plans to regulate Bitcoin in the UK are still in the very early stages, the new legislation may be put in place pretty quickly. Despite some initial struggles, there is now a booming Bitcoin community all over the United Kingdom, and a lot of people are paying attention to Bitcoin thanks to the recent price gains. It is certainly true one could purchase small amounts of Bitcoin through an ATM without verifying his or her identity. However, when it comes to making large purchases, there is no way to remain anonymous, unless one uses LocalBitcoins and never completes any peer-to-peer trades in person. We have previously touched on other payment methods also capable of being used without verifying one’s identity. Bitcoin is seemingly being scrutinized mainly because it is uncontrollable.
It is commendable to see the UK Treasury explore new ways to bring Bitcoin in line with existing AML and KYC legislation in the United Kingdom. However, given the fact that exchanges already adhere to these guidelines, it is unclear how things will evolve in this regard. The new rules will reportedly apply to the rest of the European Union as well.
For the time being, most of the specifics regarding this legislation remain shrouded in mystery. According to a UK Treasury spokesperson, this new regulation will go into place by the end of 2018, although that date has yet to be officially confirmed. In hindsight, it was only a matter of time until we saw more Bitcoin-related regulation across the European Union. Whether or not anything will change for individual users remains to be determined, though.
