The European Commission is out to track cryptocurrency users, taking anonymity away with the demand that users register on an EU-wide database.
Their proposal not only empowers them over tracking purposes, but the record would provide them with real-world identities of people using cryptocurrencies such as Bitcoin, along with the associated virtual wallet addresses wherein their money is held.
This is only the first part of an action plan the EU officially put into action back in February 2016.
The Bitcoin-linked proposal was later approved in July 2016 as it’s been favorably voted by EU’s Juncker Commission.
Untraceable by nature, Bitcoin is a popular choice for those who’d rather leave no paper or digital trail and remain anonymous for personal reasons.
Cryptocurrencies like Bitcoin can’t be traced easily, making them a popular choice for cyber-criminals for funding illegal activities.
Bitcoin Use as a Global Concern
Ransomware attacks, for instance, typically demand payments in the form of Bitcoin because it leaves no identifiable trail leading to its source.
This has become a tool that’s readily available to cyber criminals. One such attack called “Jigsaw,” slowly deletes your files if you shilly-shally to pay the ransom.
The victim is often required by a hacker to pay using cryptocurrency like Bitcoin.
It’s why the EU is willing to do whatever it takes in its power to prevent the problem from getting out of hand only to spell even bigger trouble.
Bitcoin is also regularly used for human trafficking, kidnappings, extortions, acquiring hacking tools and all sorts of illegal goods or services.
The EU hopes to put this under control once and for all, or at least track down some of the responsible parties.
Did you know that financial institutions generally do not recognize Bitcoin and other alternatives as actual money? No wonder, governments throughout the globe have constantly struggled to incorporate virtual cryptocurrencies like Bitcoin into their current laws.
EU has acted upon this matter hoping to prevent numerous crimes that take advantage of digital currencies to avoid easily and efficiently being tracked by authorities.
The EU executive body’s mandatory database of cryptocurrency users is geared towards the reform of their Anti-Money Laundering Directive. It is intended to broaden the AMLD to have virtual currencies included.
Not only does the new draft seek to have virtual currencies like Bitcoin recognized as money, but sees to the creation of a database that links cryptocurrencies to each user accordingly, which ultimately ends anonymity.
Those employing Bitcoin for nefarious motives and hiding under its cloak will be unmasked.
Once in effect, the proposal would enable authorities to better track all financial flows.
This would effectively prevent the misuse of virtual currencies.
Furthermore, companies which provide digital currency wallets or the cryptocurrency equivalent of bank accounts will be held accountable for gathering users’ data.
It’s imperative that they require their users in the EU to register using their real information.
EU’s proposal likewise includes a set of regulations that provides FIUs or financial intelligence units with the necessary tools for tracking digital currencies like Bitcoin as they do with fiat currencies.
Data would then be accessible and managed by the intelligence services.
It’s noteworthy that the draft cites self-declaration forms for virtual currency users’ utilization, whereby users are allowed to register on their own as a sign of good faith.
Before the end of 2016, the European Parliament is anticipated to vote on the proposal before the end of 2016.