UK Treasury Won't Seek AML Rules for Bitcoin Wallet Providers

NEWS
Stan Higgins
Apr 25, 2016 at 20:45 UTC  |  Updated  Apr 26, 2016 at 00:51 UTC

The UK Treasury has said that it won't seek to impose anti-money laundering (AML) rules on digital currency wallet providers in a bid to avoid overburdening those services.

The remarks were issued last week in a report that detailed the UK government's plans to tackle money laundering and terrorist financing risks more broadly. According to the report, the UK Treasury plans to bring digital currency exchange firms "into anti-money laundering regulation", reinforcing plans first announced last year.

However, an outstanding question at the time related to whether these rules would extend to wallet services that do not offer fiat-to-digital exchange functionality.

According to the new report, these companies will not have to face those kinds of requirements

The UK Treasury said:

"This [focus on exchanges] is consistent with a risk-based approach, and we note that extending the perimeter of anti-money laundering regulations beyond digital currency exchange firms (eg to wallet providers) would not deliver any benefits in terms of mitigating money laundering and terrorist finance risk, and would place significant burdens on firms in this innovative and embryonic sector."

Put more simply, the government appears to be taking the position that AML rules won't be levied on other firms working in the digital currency space beyond wallet services, as well.

The report goes on to note that, following a review of feedback from law enforcement, academic and government sources, evidence points to "a low level of illicit activity in digital currency networks" - a possible factor in the regulatory approach outlined.

The government said in the report that it will also encourage information sharing among agencies, a process that would include exchanging data on "new forms of transactions such as online banking and virtual currencies".

According to the report, the government plans to overhaul its approach to anti-money laundering oversight over the next two years.

UK Treasury image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

UKEuropeRegulation

Load Comments