United Kingdom Treasury Targets Bitcoin For AML & Tax Dodging Regulation
The Treasury of the United Kingdom has recently announced a “crackdown on the virtual currency Bitcoin amid growing concern it is being used to launder money and dodge tax”. Bitcoin investors and enthusiasts worldwide, however, are quick to point out that increased regulatory interest in Bitcoin is likely due to the meteoric rise in value of the most valuable crypto.
This latest surge in governmental interest in Bitcoin is likely far more likely to be linked to all-time high price records, as opposed to terrorism or tax avoidance, and comes with a renewed surge in formal regulatory policy announcements.
Bitcoin and Terrorism
Robert Mendick and Gordon Rayner have recently revealed that the UK Treasury has “disclosed plans to regulate the Bitcoin that will force traders in so-called crypto-currencies to disclose their identities and report suspicious activity.”
The mainstream media has been pushing a continuous stream of news that attempts to link the supposed anonymity in transaction function with domestic terrorism in the UK or tax avoidance. The pretext is now being brought forward once again to justify government intervention in Bitcoin regulation.
The pseudo-anonymous nature of Bitcoin transactions makes it difficult to track the movement of value in comparison to tightly controlled fiat currency, a fact that doesn’t sit well with incumbent financial and governmental institutions.
Ironically, the most anonymous currency of all is government-issued physical currency.
Labor Party Minister of Parliament John Mann- who is also a member of the treasury committee- has recently commented on the renewed interest in Bitcoin regulation:
“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,”
Mann also hinted toward an impending inquiry:
“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,”
Despite the narrative of stratospheric consumer adoption that is currently being pushed by the mainstream news media, cryptocurrencies still have a significant amount of ground to cover before they can be considered to be dominating financial affairs.
The University of Cambridge Judge Business School has recently released its Global Cryptocurrency Benchmarking Study, a 115 page in-depth investigation into the current and relative position of Bitcoin as detailed by Cambridge Center for Alternative Finance.
The study shows that between the 2.9 million and 5.8 million active cryptocurrency wallet users, only around 1,876 individuals work full-time in the cryptocurrency industry. While it’s safe to assume that these figures have increased slightly in the intervening year, they are still not sufficient to justify the massive amount of negative press and scrutiny directed toward the blockchain ecosystem.
Regardless of the facts of the matter, UK regulators appear to be aiming specifically at the anonymous nature of Bitcoin. Stephen Barclay, the Economic Secretary to the Treasury, has commented on the government intent to focus on exchanges:
“The UK government is currently negotiating amendments that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation, which will result in these firms’ activities being overseen by national competent authorities.”
United Kingdom Treasury Targets Bitcoin For AML Summary
With the rapid development of truly distributed exchanges, however, there is little regulatory bodies will be able to do to stem the flow of crypto apart from waste taxpayer funds in desultory, reactive, and inefficient attempts to regulate and control technologies that are barely understood by the individuals responsible for legislation themselves.