Following the recent terror attacks in Brussels and Paris that claimed 165 lives, European regulators are now looking to crack down on terrorists’ funding, including Bitcoin.
In June, the European Commission will meet to overhaul money laundering laws in response to the recent attacks. Proposed rules will require verification of traders on all currency exchange websites.
For an industry based on secrecy, this will be a major hit. A big part of the BTC appeal is the anonymity between parties. Regulators hope that by requiring due diligence they will deter criminals from using BTC. While many companies currently require verification documents from new clients it is not EU law. New legislation would require government issued ID or proof of residence.
After 7 years of Bitcoin the sudden push for ID is shocking to most traders. Traders can no longer ignore the fact that digital currencies have created a shadowy payment system favored by criminals and terrorists. As Bitcoin becomes more popular the laundering and terrorism risks continue to grow.
Prepaid debit cards will also be subject to new laws. Current EU laws only require ID for cards below 250 euros for international and 500 euros for domestic cards. Regulators are looking to institute laws requiring ID for lower value cards.
Will these new laws will affect criminals or consumers the most? Criminals were the earliest adopters of Bitcoin and will certainly find a way around these regulations. New ID requirements will mostly affect average consumers who could be discouraged from trading Bitcoin on the Forex exchanges. The affect on Bitcoin’s value still remains to be seen.
Anthony Young
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