MONEY transfer websites have been forced to withdraw support for the fast-growing virtual currency Bitcoin amid uncertainty over money laundering regulations.
Leading transfer services, often used to wire traditional currencies to Bitcoin exchanges, told City A.M. they could not continue to operate without revised regulation.
“There’s no clear guidance,” said Brett Meyers, managing director of CurrencyFair. “We have to ensure we’re not assisting in money laundering and terrorist financing. We decided to be ultra conservative and see if [Bitcoin] achieves some regulatory legitimacy.”
Bitcoin has rapidly gained in popularity during 2013 with hundreds of businesses now accepting it as payment, including some London pubs and restaurants.
But regulators have failed to keep up with the currency, which is pseudo-anonymous and is designed to be hard to trace. This makes it almost impossible for financial institutions to be certain they meet “know your customer” guidelines.
Meyers said even CurrencyFair’s banking partner, Bank of America, was not clear of the regulatory risks of dealing with Bitcoin.
Both CurrencyFair and TransferWise, another prominent money transfer website, said they would consider dealing with Bitcoin exchanges if they received firm guidance from financial regulators.