Bitcoin in the Headlines: UK Regulation Trumps Dark Market Collapse

Bitcoin in the Headlines is a weekly look at global bitcoin news, analysing media coverage and its impact.

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The UK Treasury set the tone for a positive, if quiet, bitcoin news cycle this week with the publication of a lengthy report that promised the industry will soon be regulated domestically.

As the UK-based bitcoin community revelled in the news, others were left reeling at the sudden dissolution of a black market that seems to have sent the price of bitcoin into a tailspin.

Once again we will bear witness to the good, the bad and the ugly as we take a look at this week’s top headlines from across the globe.

The UK’s big moment

The normally quiet UK bitcoin ecosystem was thrust into the spotlight this week after the Treasury published proposed regulation for the nascent sector, which included anti-money laundering (AML) rules.

The global ecosystem has long been plagued with a level of uncertainty, with entrepreneurs reporting that the lack of existing regulation has made it difficult for them to do business and hampered the possibility of securing banking relationships, the latter of which has proved especially problematic in the UK.

Although the specifics of the Treasury’s proposal will not undergo consultation until the next parliament, it seems that the news was well-received across the media. At the time of press the terms “bitcoin” and “UK budget” brought up over 70 Google results.

In her piece in the Financial Times, Jane Wild noted the change from the government which had previously warned mainly of the technology’s risks.

Wired’s Katie Collins also discussed the government’s announcement, stating:

“It is hoped that regulation will not only prevent criminal use of digital currencies, such as bitcoin, but support innovation.”

She continued: “Ideally the environment would allow for the fast, efficient and secure transfer of ownership of anything of value over the internet. It could guarantee that a secure and permanent record is made of what had taken place, without the need for a third party to oversee the process.”

This week’s scandal

As the chatter about regulation increased, the other side of the Internet was shouting about bitcoin’s most recent scandal – another dark web marketplace running away with users’ money.

Whether you think that criminals, who have been fouled by other criminals, deserve sympathy or not, the truth seems to be that Verto and Kimble, Evolution’s administrators, ran off with approximately $12m worth in bitcoin.

Whatever the story, major publications are rushing to tell the latest tall tale.

Forbes‘ Thomas Fox-Brewster described the site as a “bigger, badder version of the Silk Road drug bazaar”.

Highlighting the issue of trust in bitcoin transactions, the author said:

“Ironically, the site had what was supposed to be a security feature, with funds held in escrow until at leat two of the parties involved in a transaction signed off.”

AlJazeera published a piece titled “Evolution devolves: When dark net drug deals go badly”, noting that “since Silk Road, dark web markets have gotten darker”.

While narcotics were by far the most popular listings on Evolution, it continues, the author also says that it did a swift trade in stolen bank information and other illicit activities. It seems that drug dealers are diversifying their business, which begs the question of what we can expect to see next.

Verge of mainstream

With the regulation chatter invading the UK, and the sudden disappearance of Evolution, credit goes to Forbes‘ Ilya Pozin for asking the question that everyone wants answered: is the world ready for bitcoin to go mainstream?

Pozin said:

“Bitcoin is changing the way people pay for things and the larger economy overall. Although bitcoin remains mysterious and confusing to most people, there are signs nearly every day that bitcoin is gaining more and more legitimacy, not only in technology circles but also amongst the mainstream.”

Citing Goldman Sachs’ recent report, which construed that bitcoin had the potential to reshape the financial industry, Pozin was sure to point out that it if was ever to succeed, the digital currency had to become integrated into everyday use.

Whether bitcoin will ever hit the big time will remain to be seen, but it seems that we may be moving in the right direction, at least for now.

Image via Shutterstock. 

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