Bitcoin faces tighter UK regulation under money laundering plans

 
Courtney Goldsmith
Follow Courtney
Bitcoin Cryptocurrency Is Booming
Bitcoin's price has risen to more than $11,800 (Source: Getty)

The UK is looking to crack down on bitcoin by expanding European Union anti-money-laundering rules that force traders to disclose their identities and report suspicious activity to include cryptocurrencies.

Bitcoin prices have rocketed more than 1,000 per cent this year, but despite digital currencies becoming more mainstream they are often still associated with cybercrime.

The government is currently negotiating amendments to the fourth anti-money laundering directive, and earlier this month Stephen Barclay, the Treasury's economic secretary, told parliament that the amendments will "bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation".

The notice, which was made 3 November but only reported today, said firms' activities would be overseen by national competent authorities for those areas.

Read more: Bitcoin explained: What is it? Why did its price rise? What's next?

The negotiations are expected to conclude at the EU level in the next few months.

When finalised, the Treasury will set out the next steps to transpose the EU legislation, including regulating cryptocurrencies.

Nicholas Gregory, chief executive of London-based CommerceBlock, which helps firms do businesses in cryptocurrency, said the move was a "stamp of approval" recognising the "pivotal" role digital currencies are set to 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."

Gregory said that while the UK and Europe were playing catch up to a degree, they were 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."

Bitcoin's price rose to a fresh record high of more than $11,800 late last night.

Read more: Winklevoss twins become bitcoin billionaires

Related articles