The European Union Sets New Rules in Motion to Tackle Illicit Activities Using Cryptocurrencies

The growing popularity of cryptocurrencies is also exposing the ill intentions behind the malicious use of cryptocurrencies in activities like terror funding and money laundering. This has forced several government institutions to monitor and regulate the flow of cryptocurrency transactions made or received.

Currently, a case of an American woman was registered who was later found guilty of making Bitcoin payments to a terrorist organization - ISIS operating in Syria. Moreover, the attempts of online hacking have also increased where recently nuclear nation North Korea has been accused of several attempts to hack user accounts and steal Bitcoins have been reported.

In order to foil such attempts in future, the European Union has reached an agreement of Friday to put some regulations on the operations of exchanges. As per the latest reports by Reuters, these agreements also aims to impose strict measures for tax evasion as well as impose controls on the pre-paid cards.

Europe’s Justice Commissioner Vera Jourova said, “Today’s agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing.”

The investigators say that all the agreed measures will put an end to several anonymous transactions done with pre-paid cards on the virtual currency platforms which can supposedly be used for illicit activities. Also, these new measures will force exchanges to gather user identity and make it impossible for the users to perform transactions without revealing their identity.

However, things are unclear at the moment as to how the European Union plans to implement this measures. This is because many of the wallet developers do not operate within their jurisdiction. Moreover, all the measures will come into effect by the next 18 months.

The decision is said to come as the Bitcoin price grows by more than 1800% in past one year and has triggered a lot of worries currently in the market regarding a possible bubble that can burst anytime.

The reports also suggest that all these measures have been decided with over a year of negotiation after the legislative proposals were put forward by the European Commission following the shooting and bombing attacks in Paris and Brussels in 2015 and 2016.

It took this long to arrive at this decision because some companies opposed the increased transparency of trusts and companies fear that it might negatively impact their economies. MEP Judith Sargentini, the lawmaker in charge of the issue says Britain, Malta, Cyprus, Luxembourg and Ireland were the countries opposing.