EU, UK regulators look to crackdown on bitcoin

EU, UK regulators look to crackdown on bitcoin
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European countries are plotting a crackdown on the digital currency bitcoin as its value hits record highs.

European Union countries and the United Kingdom are planning to regulate bitcoin and other cryptocurrencies out of concern for their use for criminal activity like money laundering and tax evasion.

Cryptocurrency detractors worry that its anonymity helps criminals looking to avoid law enforcement oversight.

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Accordingly, an EU-wide plan would force digital currency trading platforms and digital wallets to carry out due diligence on customers and report suspicious activity to the authorities, essentially removing the anonymity behind cryptocurrencies.

“We are working to address concerns about the use of cryptocurrencies by negotiating to bring virtual currency exchange platforms and some wallet providers within anti-money laundering and counter-terrorist financing regulation,” U.K.’s Treasury said in a statement.

The regulations are expected to be enacted over the next several months.

“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,” John Mann, a member of the Treasury select committee, told the Telegraph.

"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.”

The EU and U.K. would join world powers like the U.S., Russia and China, who have all taken steps to crack down on the fast-rising currency in recent months.

Last week, Coinbase, the largest digital currency platform, was ordered to hand over 14,000 accounts to the IRS after losing a federal lawsuit.

Such regulations come as bitcoin and other cryptocurrencies have hit record high valuations.

Bitcoin hit an all-time high of more than $11,000 per coin last week. Ethereum, the second most valuable digital currency in terms of market capitalization, is currently trading around its all-time high of more than $460.

Despite recent moves, what some governments across the world will do has yet to be determined.

American lawmakers during a congressional hearing earlier in the year appeared to be less concerned with the sorts of risks digital currencies pose. Many in the hearing noted the potential to use bitcoin to fund nefarious activities, but also lauded potential benefits.

The Securities and Exchange Commission, which could more immediately regulate digital currencies, has not given a clear position on if it plans to crack down on them, except in clear instances where certain coins are clearly frauds or operating as securities.