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Treasury launches crackdown on bitcoin misuse

Treasury plans to bring crypto-currency under anti-money laundering and counter-terrorism rules.

Treasury launches crackdown on bitcoin misuse

The Treasury has revealed plans to regulate bitcoin, bringing the crypto-currency under its anti-money laundering and counter-terrorism rules in a bid to stamp out its use for illegal means.

In a written parliamentary answer, economic secretary to the Treasury Stephen Barclay said the government would toughen up the  rules on money laundering through virtual currencies.

‘The UK government is currently negotiating amendments [to the 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,’ he said.

MP John Mann, who sits on the Treasury Select Committee, told the Telegraph he expected an inquiry into the currency next year.

‘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.

‘I'm not convinced that the regulatory authorities are keeping up to speed. I would be surprised if the committee doesn't have an inquiry next year.’

News of the Treasury's plans prompted a dip in the rocketing price of bitcoin, which passed the $10,000 mark last week. But after falling from $11,725 to $10,940 yesterday, it has recovered most of that ground and is currently trading at $11,291.

The Treasury's move would bring the UK more in line with the US, whose treasury classified bitcoin as a decentralised virtual currency in 2013, before it was classified as a commodity by financial regulator the Commodity Futures Trading Commission two years later.

'The UK is playing catch up but there is no excuse for this. The US is way ahead in terms of regulating crypto-currencies,' said Julian Dixon, chief executive of big data specialists Fortytwo Data.

News of the Treasury crackdown has meanwhile done little to dent enthusiasm for the currency ahead of the launch of bitcoin futures.

'The new bitcoin futures, launching in two weeks, have given the legitimacy of this asset a boost, defying sceptics and global regulators, all of whom are urging investor caution,' said Rebecca O'Keefe, head of investment at Interactive Investor.

'Exchange-traded fund providers are all trying to be first out of the gate to offer a digital currency option to mainstream investors.'

1 comment so far. Why not have your say?


Dec 04, 2017 at 15:36

The Treasury can't even control the rampant money laundering in the London property market which uses their own fiat tickets. Or they simply choose not to because they're on the receiving end.

That's the real issue they have with crypto.

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