Bitcoin Regulation - One AML Audit

Known as an “innovative payment network and a new kind of money”, Bitcoin is the world’s leading form of cryptocurrency.

By using peer-to-peer technology, Bitcoin operates with no central authority or banks – enabling people, all around the globe, to anonymously purchase, sell and exchange digital money.

The Need for Regulation

Since its creation in 2009, Bitcoin has grown dramatically in both popularity and value. And, in recent years, so too has the need for regulation of this controversial market.

Given the decentralised nature of Bitcoin, it is extremely difficult to control. Neither transactions, nor accounts, are connected to real-world identities – and, the software can be downloaded for free, by absolutely anyone.

Thus, in a climate where it’s becoming increasingly difficult to hide illegal activities, the cross-border character, lack of surveillance, and anonymity of crypto assets, creates an enticing opportunity for crafty criminals to hide illicit funds.

Although it’s difficult to scope out the exact extent of this problem, current estimations suggest that between 1-44% of Bitcoin transactions are from a criminal order.

Regardless, it’s due to mounting concerns over these matters, that Binance Holdings Ltd – the world’s biggest cryptocurrency exchange in the USA, is currently under official investigation by the Justice Department and Internal Revenue Service.

The Regulatory Radar

One thing that is certain, however, is that Bitcoin is here to stay.

As financial regulators worldwide continue to sharpen their focus on Bitcoin and cryptocurrencies, they are increasingly looking for a stable framework of regulation and monitoring – arguing that Bitcoin should be held the same standards as the rest of the financial world.

In the short term, such regulations may suppress the trading values of cryptocurrency. But, in the long term, it’s expected that these regulations – if done properly, will stabilise the market, and make it a safer investment for all.

An International Approach

However, there is still a significant amount of work to be done by the government,  financial industry bodies, crypto businesses and financial institutions, in order to achieve regulation and compliance. And, it’s clear that any approach to cryptocurrency regulation must have international consensus.

Given that, at present, each country has different standards around cryptocurrencies, this will be no easy feat.

We Can Help

While the debate and conversation around Bitcoin continues globally, in the meantime, our highly specialised team here at One AML is available to provide more information surrounding these issues, as well as expert advice on how to remain vigilant and compliant.

Get in touch with us today.