EU Council Requests The Registration Of Bitcoin Users
The European Council seeks to introduce an anti-terrorism measure that will ensure a stricter handling on cryptocurrencies, such as Bitcoin, Litecoin, and Ripple. If the motion gets accepted by the heads of state and the governments of the member countries, the listed currencies will be managed by the EU Anti-Money Laundering Directive.
According to the German media outlet heise.de, the platforms that âdeal with cryptocurrencies or exchange them into traditional currenciesâ will need to store both the identity and the address of the user electronic wallets in a central database.
The measures by the EU Council are intended to prevent abuse caused by the anonymity of electronic currencies. Bitcoin is widely used on the internet. However, it is also a mainstream cryptocurrency commonly used for making illegal deals on the dark web. There is no clear evidence that terrorists are using electronic currencies for financing their activities, but the European Council seeks to prevent this from happening.
The motion also seeks to impose new restrictions on prepaid cards too. In the future, clients have to deposit 150 euros to acquire a prepaid card. In addition to that, the daily limit will be set to 250 euros, although, some member countries already have their own stricter guidelines.
The political initiative originated from the EU Commission and the Council adopted the position with some changes. It is now awaiting to be accepted by the EU Parliament.
The initiative, if accepted, could change the future of cryptocurrencies. There is a chance that many users will abandon Bitcoin due to the new anti-money laundering policy, which could cause the currencyâs price to drop.
The EU Council adopted the motion, even though, a Europol report in early 2016 showed that terrorists do not use cryptocurrencies to finance their activities.
âThere is no evidence, however of IS-financing networks in existence. Third party reporting suggested that terrorists use anonymous currencies like bitcoin to finance their activities. However, this has not been confirmed by law enforcement. The financing of terrorist operations has not undergone any marked changes in the recent past. The sources of funding of the operatives in the EU are largely unknown,â the Europol report suggests.
Experts say that possible payment methods for terrorists are bank transfers and cash. Unlike traditional financing methods, Bitcoin transactions can be easily tracked on a public ledger in real-time, which offers no advantage to the terrorists. The report also included the communication methods and the use of encryption technologies of Islamic State terrorists:
The internet and social media are used for communication and the acquisition of goods (such as, weapons and fake IDs) and services, made relatively safe for terrorists with the availability of secure and inherently encrypted appliances, such as WhatsApp, Skype, and Viber. On other platforms such as Facebook, VKA, and Twitter, they join closed and hidden groups that can be accessed by invitation only, and coded language.
The use of encryption and anonymizing tools prevent conventional observation by security authorities. There is evidence of a level of technical knowledge available to religiously inspired terrorist groups, allowing them to make their use of the internet and social media invisible to intelligence and law enforcement agencies.