Treasury planning crackdown on bitcoin and cryptocurrency anonymity in bid to tackle criminal use of digital currencies
Ministers at the Treasury are planning a shake-up in the world of cryptocurrencies that will mean bitcoins and other virtual currencies can no longer be purchased anonymously.
The change in the law, which the Treasury is preparing to introduce next year, will subject bitcoin exchanges and wallets to the same regulations as high street banks, reported the Sunday Times. This would require providers of bitcoins and other virtual currencies to check the identity and address of customers.
Under the amended rules, bitcoin buyers would have to provide a passport or driving licence to the exchange where their digital currency is purchased, which would make tracing their true identity easier.
The proposed crackdown follows warnings from police that bitcoins are being used to launder millions of pounds, according to the Sunday Times. Digital currencies have previously been linked to criminal activity, in which they were used as the tender used to buy drugs, weapons and child pornography. The Treasury declined to comment.