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Virtual currencies to be regulated in UK and EU

Virtual currencies to be regulated in UK and EU

The UK government aims to introduce tighter money-laundering regulations to include virtual currencies. Currently under negotiation with the EU, this is part of a broad update that will ultimately stop transactions being made anoymously.

In response to the Metropolitan Police saying cryptocurrency cash machines across London are used by criminals to launder money, the UK Treasury has advised that regulations must be updated to include Bitcoin and other virtual currencies.

During a press briefing, Detective Superintendent Nick Stevens, from the Serious and Organised Crime Command, said: “Organised criminal groups have been early adopters of crypto-currencies to evade traditional money laundering checks and statutory regulations. Criminals have also used crypto-currencies to purchase illegal commodities on dark market sites with anonymity.”

The digital currency market is currently booming in the UK, with many people making a lot of money from the increased successes of virtual currencies across the world. With more and more people investing, enticed by surging value of Bitcoin, the government’s plans to regulate it more tightly could be immediate. Though, as CoinTelegraph reports, it is likely to be in by the end of 2018.

However, the news could jump the industry into action to better self-regulate. Dr Garrick Hileman, a research fellow at the University of Cambridge and Bitcoin expert said: “I think these announcements have a powerful signalling effect and put the industry on notice that the ‘cop on the beat’ is concerned and watching crypto-currencies more closely now. This in turn will motivate companies to more effectively self-police bad actors.”

As virtual currencies continue to rise from strength to strength, we must expect tighter regulations and laws to govern the industry. When governments take notice it gives credence to the industry and it is important that Bitcoin and other currency providers anticipate these changes to ensure customers are protected.

Virtual currencies have seen tighter regulation in New York State in the USA where companies using bitcoin are required to have a BitLicense. This resulted in what was called the ‘great bitcoin exodus’.