The end of anonymity for Bitcoin users may be fast approaching as the EU has put forth a proposal that would require anyone using the cryptocurrency to register on a database.
The European Commission (EC) is behind the push to take away anonymity from Bitcoin and other virtual currencies with the hope that this could help prevent a number of crimes that utilise digital wallets as a means of avoiding a paper trail. The proposal would require all users of the cryptocurrency to register using their real-world identity and to provide the addresses of the virtual wallets containing their funds.
Since Bitcoin is untraceable by nature, cybercriminals have embraced the virtual currency to commit cybercrime. This is especially so with ransomware where users often have to pay using cryptocurrency to unlock their files after falling victim to an attack. The global rise in this form of malware has affected individuals, companies and even governments which is why the EU is willing to do anything in its power to prevent it from becoming a larger problem than it already is.
The EU is currently working on reforming its Anti-Money Laundering Directive (AMLD) and has decided to add a database of cryptocurrency users to it in order to prevent criminals from laundering money in an untraceable way via the internet. It has been quite difficult for governments to include cryptocurrency into their laws as this nascent technology is rarely recognised as actual money by financial institutions.
The latest version of the AMLD will recognise virtual currencies as money and its database will remove the anonymity that those employing it for nefarious purposes have hid behind for some time. The companies that provide digital currency wallets will also be held accountable to require that users in the EU register using their real information.
The proposal is expected to be voted upon by the European parliament before the end of 2016.
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