News

04th December 2017

Crackdown On Bitcoin As UK Considers Cryptocurrency Regulation

The UK is cracking down on cryptocurrencies including Bitcoin with the aim of bringing in regulations to combat crime including terrorism, money laundering and tax evasion.

The Treasury has announced that work to bring transparency to virtual currency exchanges has begun across the EU.

The plan proposes that online platforms should be accountable for conducting due diligence on all customers and report transactions they deem to be suspicious. The aim of which, is to make the market less attractive for criminals to use.

The pressure to impose a plan increased as Bitstamp exchange showed Bitcoin hovering just below its latest record value of £8,790 ($11,800) on Sunday.

Bitcoins value has increased by more than 1000% this year and is viewed as a financial asset akin to gold rather than a digital currency.

Both experienced investors and regulators have warned of the risk that the bitcoin bubble may burst as last week saw the value of the currency wildly fluctuating as it approached the $11,800 mark.

Irrespective of the risk, it is hoped that the creation of Futures Markets next year will help to soothe volatility.

Authorities have shared particular concern regarding unregulated digital currencies due to how easy it is for currency holders to avoid detection.

An example of this was highlighted back in May, when hackers targeted WannaCry ransomware systems worldwide. A third of NHS Trusts were dramatically effected by this, as hackers locked computers and demanded ransoms in the form of Bitcoin payments.

A spokesperson for the Treasury has stated that there are clear tax rules for people using crypto-currencies which are kept under review. They further noted the intention to bring in anti- money laundering and counter- terrorist financing regulation for virtual currency exchange platforms.

Gary Broadfield, Head of Cyber Crime comments:

"Cryptocurrencies such as Bitcoin operate largely outside the existing financial system. As they are decentralised, they are fundamentally difficult, perhaps impossible, for governments to control.

One exception to that may be the “exchanges” or the point at which cryptocurrencies are exchanged for fiat currencies and the proceeds remitted to banks. The regulation of exchanges and in particular the proposal to impose “Know Your Customer” due diligence requirements on exchanges has been in the pipeline for some time and is nothing new.

However, it remains to be seen how effective such regulation can actually be, especially when we look at newer, privacy focused cryptocurrencies such as Monero that purport to offer users a far greater degree of anonymity than Bitcoin."

For information or advice in relation to cyber and online crime matters call our team on 0808 168 5550 or email info@cartwrightking.co.uk

For further information please get in touch with our dedicated team.

You can always call us on 0845 894 1622 or email on info@cartwrightking.co.uk

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