UK Treasury Won’t Force Anti-Money Laundering Rules on Bitcoin Wallet Providers

Rage Review : The feedback on the first announcement of imposing anti-money laundering regulations (AML) on digital currency companies last year was not good. Instead, it would increase the risk of money laundering and terrorist financing and impose more burdens on companies in this field. Last week, the UK Treasury stated that it would not impose anti-money laundering (AML) regulations on digital currency wallet providers. The government will encourage information sharing between agencies, and in the process will exchange data through "new forms of transactions such as online banking and digital currencies."

Translation: Nicole

The UK Treasury has said it will not impose anti-money laundering (AML) regulations on digital currency wallet providers to avoid placing an undue burden on the service.

Last week’s report detailed the U.S. government’s plan to address money laundering and terrorist financing issues. The Treasury Department first announced the enhanced measures last year to bring digital currency trading companies “under anti-money laundering regulations,” according to the report.

However, the most salient question at that time is whether these regulations will apply to digital wallet services that do not provide the function of exchanging fiat currencies for digital currencies.

According to the latest report, these companies do not have to meet these regulations.

The UK Treasury said:

“This approach (for exchanges) is also risky, as we find that imposing AML regulations on other digital currency trading companies (i.e. digital wallet providers) will not do anything to reduce the risk of money laundering and terrorist financing, and will add more burdens to companies in this innovative space.”

In short, the government’s anti-money laundering regulations will not be imposed on other companies dealing with digital currencies either.

The report found that feedback from law enforcement, academia and governments showed evidence of “a reduction in illicit activity in digital currency networks” — a factor that could be considered in the outline of regulatory proposals.

The government said in the report it would encourage information-sharing between agencies, in the process exchanging data through "new forms of transactions such as online banking and digital currencies".

The report suggests that the government plans to overhaul its approach to anti-money laundering regulation over the next two years.