New Amendment to EU Legislation to End Anonymity in Bitcoin Casinos

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Bitcoin casino players that reside in countries within the European Union are at risk of losing their transaction anonymity, according to a recently published report concerning a new amendment proposal to EU’s AML (anti-money laundering) laws.

The amendment proposal in question refers to the current European Parliament and Council Directive from 2015 for the prevention of financial systems abuses to finance terrorism and launder money. And according to the published report, there are several changes which directly concern Bitcoin users as they are designed to give authorities more regulatory insight over virtual currency exchanges that would change how the buying process works, which weren’t included in the previous version.

What Does the EU have in Mind?

According to the report, the European Commission finds it “clear” that virtual currencies can be put to use for criminal agendas, which is why they are proposing to turn virtual currencies suppliers into more traditional providers of financial services. To do this, the Commission suggests that exchange platforms and wallet providers become subject to the “same reporting obligations” as their traditional counterparts.

The commission finds that terrorists groups can use virtual currency networks to transfer money inside EU’s financial system by exploiting some degree of anonymity from virtual currency platforms and concealing their transfers, since there are no existing legal obligations to identify suspicious activities.  Thus, they believe the Directive (EU) 2015/849 should be expanded to allow the relevant authorities to monitor the flow of virtual currencies.

It’s interesting to note that in the report the Commission voices its concerns that the credibility of virtual currencies like Bitcoin will never increase as long as they are misused for criminal purposes. With this in mind, they are suggesting that the anonymity of Bitcoin and other cryptocurrencies will become more of a barrier that an asset, which will in turn hinder the growth of their potential benefits, which frankly, is an interesting choice of perspective.

Regulation, Not Endorsement

In line with this new context, the new amendment proposes to give more power to the national FIUs (Financial Intelligence Units) so they can fight the risks tied to anonymity. Their weapons, as stated in the report, are to “associate” the addresses of cryptocurrencies to their owner’s identity, but also explore the possibility to allow cryptocurrency users to voluntarily “self-declare” to the assigned authorities.

Near the end of the report, there’s also an opinion from the European Committee on Legal Affairs which agrees with the proposed legislative and calls cryptocurrencies a “marginal phenomenon at present”, but also one whose importance can grow significantly over time.  Thus, the Committee gives its approval but also states that it agrees with the ECB (European Central Bank) that the report should not use a choice of words that could be misunderstood as an “endorsement to virtual currencies”.

The Transposition date for the new Anti-Money Laundering Directive is set for the 26th of June this year, which means that changes in EU exchange policies could be set up this summer

March 15, 2017: • No Comments

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