Tuesday, December 1, 2020

UK regulators to curb money laundering through cryptocurrency

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The proposed amendments to the country’s financial regulations are meant to curb money laundering and other illicit financial activity that is being done using cryptocurrency.

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The FCA has proposed that the government of the UK should place restrictive measures on software programs created and developed for the crypto industry.

The anti-money laundering and counter-terrorism financing regulations will be applied to businesses that engage with cryptocurrencies and digital transactions. The regulatory authority says that these regulations will be put into effect within the next year.

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Firms that produce open-source software, and companies which provide wallet software, will also be governed by these regulations. The crypto landscape in the country will change significantly as a result of these new regulations.

Keeping track of crypto transactions

The proposed regulations are expected to go into effect in the first quarter of 2020. They were originally proposed by the UK’s treasury department, and they are specifically designed to counter illegal financial activity.

Authorities in the UK will be able to track any activity that a trader engages in on their crypto wallet, among some of the monitoring activities that they will be able to execute.

Players in the crypto community have come out and criticized the proposed regulations. Coin Center, a US based research institute for cryptocurrency, said that the extension of these regulations violates the privacy of crypto users.

The regulations may infringe the users’ right to freedom of privacy and speech, and this is a cause for concern for members of the crypto community.

The FCA and the UK’s government are looking to have more control over cryptocurrencies through these measures.

Having access to user data and being able to track each transaction made using crypto assets will give the authorities greater control over the crypto industry.

Cryptocurrencies and policies worldwide

While the UK is developing these regulations to further monitor crypto activity, other countries are developing crypto friendly policies to encourage the growth of the crypto industry within their jurisdiction. Portugal and France have amended their tax laws and have made crypto transactions tax free.

This enables crypto related businesses in these countries to grow in their activity and to increase the scope of the work that they do. Japan’s authorities continue to issue out licenses to crypto related firms as online crypto trading continues to grow in the country.

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