One of the financial regulators’’ worst fears when it comes to bitcoin is that the virtual currency keeps the users anonymous. Once you convert your fiat currency to bitcoin, those funds are kept in a virtual wallet, and are assigned a private key. From this point, it is impossible to tell who owns the bitcoins, which protects the owner’s identity.
On the other hand, fiat currency can be traced through bank account and credit card details, so the authorities will always know where the money goes. By monitoring transactions back and forth, gambling regulators are able to monitor casino’s activities and impose necessary regulations. Most of the casinos and gambling sites, like the ones listed at www.topratedbingosites.co.uk/new/, are operating solely using fiat currencies and those may not be the safest options for your privacy. With bitcoin, this is not very easy to do, which begs the question of whether gambling regulations are being rendered ineffective by bitcoin.
Legislation of gambling with bitcoin
There are currently no particular laws that address gambling with bitcoin, which leaves the gambling industry in a grey area. With no specific laws about the practice, it is generally accepted that you can use bitcoin in gambling within regions where both bitcoin and gambling have been legalized.
Meanwhile, for those regions where either gambling or bitcoin have been restricted, bitcoin allows residents in these areas to bypass these laws and keep on gambling. These situations are the ones that make gambling regulations seem ineffective in the face of bitcoin. For example, online gambling through offshore sites in Norway is not allowed, but Norwegians still do it using bitcoin.
Are there any dangers to gambling using bitcoin?
Regulators monitor gambling activities because the industry can be used for nefarious activities like money laundering. If these regulators notice any suspicious activities, they can proceed to trace the transactions and confirm if there was any illegal activity. Using bitcoin for the same purpose will be very difficult to determine, and this leaves the regulators’ hands tied.
Besides, regulators monitor gambling activities for match fixing. They can tell if this happened by tracing the source of the funds to the results of the matches. Again, this is not possible if the fixers used bitcoin, making the regulations seem useless.
What are the regulators doing?
Knowing the dangers that gambling with bitcoin pose to the industry as a whole, the regulators are trying to come up with new ways to prevent, or at least control and monitor, gambling transaction with bitcoin. In several countries, legislation has been passed requiring the gambling institutions to screen their clients and establish their identities.
Other laws have been passed that restrict payment providers from processing transactions for bitcoin. However, these laws do not target use of bitcoin in particular, and there are still many loopholes.
Are the regulations unneeded?
Even though use of bitcoin in gambling is making the current regulations ineffective, these laws are still very much needed. Looking at the dangers posed by gambling through bitcoin, the industry could be threatened if appropriate and effective laws are not passed to regulate the industry.