This post is by Chandra Lye.
The executive body of the European Union (EU) has warned of a further crackdown on virtual currencies in hopes of cutting off financing to terrorists.
Details were revealed recently in the European Commission’s Action Plan for strengthening the fight against terrorist financing and its call for Bitcoin exchanges to come under the supervision of the Anti-Money Laundering Directive.
If proposed legislation passes, virtual currency exchanges would be accountable for gathering comprehensive information about those looking to change bitcoin into traditional currency.
“We must cut off terrorists’ access to funds and enable authorities to better track financial flows to prevent devastating attacks such as those in Paris,” E.U. Commission Vice President Valdis Dombrovskis said in a statement.
Forbes has argued the currency has not been that anonymous, as each transaction has been documented on the blockchain. But a spokesperson for the E.C. said the public ledgers were not transparent enough.
“Indeed, public ledgers offer traceability to transactions between accounts,” press officer Letizia Lupini explained. “However, these accounts remain anonymous. This anonymity is potentially an incentive for unlawful activities.”
Regulators and advocacy groups have said more education is needed, not regulation.