For some time we have been talking about how cryptocurrencies have been misused. Anonymity is all very fine when it is not abused, and we are not sure that this is the case. All premonitions alone, experts from all over the world have been citing proof that there may be something indeed rotten in the state of current affairs.
The growing concern about the rise of these chunks of digital assets has made many people feel uneasy. Not only that, but now that a South Korean regulator has passed away, we have all the reasons to worry.
‘I told you so!’ would be a popular refrain among naysayers, but we simply try to gauge the situation at its own merit. However, the facts are that presently more than sixty financial watchdogs from the world over (including Interpol and Europol) are now pooling their resources to undo the allegedly illegal proceedings.
And the sums are quite substantial, hence the reason for concern among experts. Estimated $5.5 billion is currently being laundered through such assets, which is a stunning amount.
Criminals have indeed found a new haven that is beyond the reach of regulators. And what is worrying is that not criminals, but ordinary investors and traders are shielding the crypto world from the prying hand of banks and governments.
Even though Blockchain allows people to trace the origins of transactions, that is not always feasible. For instance, criminally-minded individuals will often use extra accounts to make sure they can trade the sums multiple times until they are lost in the ether.
And an even more worrying trend of recent days is the plain fact that new currencies may be sprouting out of the ground to particularly cater to people who use the crypto assets to engage in such illegal activities.
Monero is known to be drug dealers’ favourite exchange currency. Regulators are now acting all across the world, including US, EU, Japan, and Australia.
The European Union
The European Union will now undertake its own investigation of money laundering and tax evasion involving any sort of digital assets. As per a recent piece of the law voted on 7 February, the EU Parliament will see to create a committee that will deal with tax privileges among individuals in Portugal, Italy, Malta, and the United Kingdom, and Cyprus.
However, investigating the finances of individual Member States remains within the remit of every individual state, making it difficult for any commit to carrying out its responsibilities in full. For the plan to kick off, a majority plenary vote will have to be passed.
The United States
If you think that the United States is behind on regulating cryptocurrencies, think again. There is the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) that is dealing with exchanges and companies that own assets in said currencies.
Finally, Japan is exercising control over its own exchanges through the Financial Services Agency (FSA). Most recently, one of the country’s largest exchanges got hit by a hacker attack that cost it dearly.
The culprits managed to run away lifting $530 million in the process. Naturally, the country is now seeking to establish a common framework for managing crypto assets and to ensure that low-key wallets will not need to losses worth millions.