The UK And EU Plan To Make Bitcoin Investors Use Their Real Names

Bitcoin managed to set a new price record on Sunday, briefly hitting $US11,826 ($15,569) per coin. And governments around the world are taking note of the boom in divergent ways. In the European Union, a new plan is expected to regulate cryptocurrencies under the same anti-money laundering laws as fiat money. It's expected to take effect sometime next year.

Photo: Getty

For governments that are suspicious of cryptocurrencies, fears of bubbles, ponzi schemes and economic destabilisation have often been the focus. Countries such as South Korea and China have publicly come out against initial coin offerings (ICOs) that work as investment opportunities and have a high potential for fraud. But for the UK and the EU, cryptocurrencies' potential for enabling money laundering, drug dealing, terrorist funding and other nefarious activities have lawmakers up in arms. According to The Guardian:

[Britain's] Treasury plans to regulate bitcoin and other cryptocurrencies to bring them in line with anti-money laundering and counter-terrorism financial legislation. Traders will be forced to disclose their identities, ending the anonymity that has made the currency attractive for drug dealing and other illegal activities.

Under the EU-wide plan, online platforms where bitcoins are traded will be required to carry out due diligence on customers and report suspicious transactions.

Last week, London's Metropolitan Police publicly warned that drug dealers at all levels were using Bitcoin ATMs to stash their profits out of sight.

In October, Stephen Barclay, the economic secretary to the Treasury in the UK, responded to a parliamentary inquiry with a written plan that would amend anti-money laundering and counter-terrorism regulations to include cryptocurrencies. "The government supports the intention behind these amendments," he wrote. "We expect these negotiations to conclude at EU level in late 2017 or early 2018."

How seriously these bodies pursue individual cryptocurrency users remains to be seen. It would certainly cause headaches for Bitcoin and alt-coin users because anonymity is one of the most attractive features of cryptocurrency. But the fact is, with Bitcoin and variations such as Monero, if a user wants to be anonymous, there's little that a government can do to stop them. Regulating exchanges will be easier, but if someone wants to bypass an exchange, they could certainly do so. Still, criminalising the use of cryptocurrencies without attaching identification would certainly be a deterrent, and individuals who don't take every step to hide their identity could be targeted.

Last week, White House Press Secretary Sarah Huckabee Sanders said that Tom Bossert and the Homeland Security team was "monitoring" cryptocurrencies. It's unclear whether the US considers Bitcoin to be a security issue, or if the White House was just improvising an answer to a question it hadn't really considered.

But not all governments are taking the view that cryptocurrencies are a threat.

For Venezuela, they could be an opportunity to find relief from the economic struggle that was only exacerbated by recent sanctions. According to Reuters, Venezuela's President Nicolas Maduro announced on Sunday that his government would issue its own digital currency called the "Petro".

It's a fitting name because the Petro will be backed by oil, gas, gold and diamond reserves, Maduro said in a television broadcast. While it makes sense that Venezuela would try a drastic economic measure at a time when its monthly minimum wage has fallen to the equivalent of just $AU5.66, it's not yet clear how the Petro would actually work. Bitcoin and its imitators are decentralised currencies that mostly use algorithms and public interest to determine their supply and value. Maduro didn't offer many specifics, mostly making vague proclamations such as saying that this initiative will help Venezuela "advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade".

For cryptocurrency evangelists, decentralised money has always been considered a potential option in countries where the people can't trust their government to properly manage the economy. One could imagine, in theory, that an anonymous currency could help citizens get around economic sanctions and avoid the rapidly depreciating Venezuelan bolivar. But it appears that the Petro will simply be tied into Venezuela's central bank, an untried strategy for a major country.

On top of that, The Washington Post reports that a third of Venezuela's citizens don't have an internet connection. Throw in the fact that digital currency has a bit of a learning curve, and that there's no infrastructure set up for taking payments, and the plan seems at least a little bit half-baked. Angel Alvarado, an opposition lawmaker and economist, told Reuters that the move has no credibility. "It's Maduro being a clown," he said.

Speaking of clowns, Mark Zuckerberg's former rivals the Winklevoss twins recently became Bitcoin billionaires, according to The Telegraph, as their combined $US11 million ($14.5 million) investment in the cryptocurrency in 2013 is now worth 10 digits. The last thing the world needs is more dimwitted billionaires. Maybe making this all illegal isn't such a bad idea.

[The Guardian, Business Insider, Reuters, France 24]



    Don't you already need to do this? Everytime I've gone to buy bitcoins, for whatever reason, it's been a MAJOR pain in the ass to bend over backwards providing all the ID details they want. The last one I wanted to sign up for actually wanted me to take photos of myself and my ID's etc. Fuck dat.

      Perhaps you've just had your money and ID stolen?

        Not yet, but I do feel if I signed up to any of these bitcoin sites I would...

    Bitcoin was created specifically as a decentralised store of value/money that is free from the mismanagement of governments/banks. Obviously, the value of bitcoin is now making them nervous as the banking disruption it promises gets closer to reality.

    Banks/governments will likely try, but the only way to kill bitcoin is to turn the internet off. There are so many ways around crypto censorship that its pathetic for banks/governments to think they can control it in any way.

    Governments want to register crypto users? - Well, people can just trade for privacy coins which are 100% anonymous.

    Banks/governments want all exchanges to report their users? - Well, people can just use one of the decentralised exchanges built on blockchain, which is just as indestructible and immune to centralised interference as bitcoin is.

    Big Brother could conceivably cut the fiat to crypto lifeline by blocking electronic fiat transactions to known bitcoin suppliers, but the market and bitcoin would continue OTC for as long as it needs to.

    Crypto The Fed might as well just buy some BTC and get on the bandwagon before its too late.

    Cameron @moonhead Have you tried one of the more reliable exchanges like CoinBase or even an Australian one like CoinJar, CoinSpot or Cointree? They'll all ask for ID, but this is just to make sure people aren't buying bitcoins with stolen credit cards, etc. These companies make plenty of money doing what they do so I'm 100% certain the exchanges I've listed aren't out to rip customers off.

    Last edited 05/12/17 8:00 pm

      " but the only way to kill bitcoin is to turn the internet off."
      At some point, to extract the "cash value" from a bitcoin it needs to be traded to someone.
      Exchanges can be killed off by the banks refusing to service the companies that run the exchanges. That will stop most of the bitcoin<->country-based-currency conversions.
      Businesses (legit or dodgy) that accept bitcoin are unlikely to keep accepting it if they can't get their money from it.

      Alternatively, any government could fairly easily launch a 51% attack and just destroy it that way.

      Have you tried one of the more reliable exchanges like CoinBase or even an Australian one like CoinJar, CoinSpot or Cointree?

      Those are the ones I'm talking about... The excessive ID requirements are dodgy as all hell. Who are these people, what measure do they have in place to secure my information, how can I verify that, and more importantly, why would I bother? The whole industry is just dodgy and sites like this should be warning people about it, not encouraging people to hand over all their personal information.

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