UK plans crackdown on Bitcoin and cryptocurrencies amid tax evasion fears

Purvai Dua

Source: @Photoshot

New rules to come into force by the end of the year or early 2018

In a move to bring transparency to virtual currency exchanges, the UK Treasury and other EU governments are launching a crackdown on the digital currencies like Bitcoin amid growing concern it is being used to launder money and dodge tax.

Under the plan, online platforms would be forced to carry out due diligence on customers and report suspicious transactions in an effort to make them less attractive to criminals.

The authorities are alarmed by the lack of regulation around the digital currencies. Anybody can buy and sell them anonymously, making them attractive for criminals and tax avoiders.

But the UK Treasury has now said it intends to begin regulating the virtual currency, which has a total value of £145 billion, to bring it in line with rules on anti-money laundering and counter-terrorism financial legislation.

The new rules are expected to come into force by the end of the year or early in 2018

A Treasury spokesperson said on Monday: “We have clear tax rules for people who use cryptocurrencies, and like all tax rules, these are kept under review. We also intend to update regulation to bring virtual currency exchange platforms into anti-money laundering and counter-terrorist financing regulation.”

The value of Bitcoin has climbed by more than 1,000 per cent in the year to date. Despite some fluctuations in valuation last week, there are growing reports that the cryptocurrency will gain further in future.

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