07:33 GMT +318 October 2018
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    EU to Crack Down on Bitcoin in Move Prevent Funding of Terrorism

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    The European Council and European Parliament agreed on Friday to impose stricter rules targeting exchange platforms for bitcoin and other cryptocurrencies to prevent the financing of terrorism and money laundering.

    The move to set new rules targeting bitcoin and other cryptocurrencies follows in the wake of the terror attacks in Paris and Brussels in 2015 and 2016, respectively. Another factor in the reform was the release of the Panama and Paradise Papers, which detailed how some politicians and celebrities had funneled money to tax havens. In response, the EU vowed to clamp down on tax avoidance and money laundering.

    READ MORE: Cryptocurrency for Terror: US Woman Accused of Using Bitcoin to Fund Daesh

    While the proposal was set forth by the EU's executive branch, the European Commission, more than a year of negotiations were needed for the measures to be approved, German broadcaster Deutsche Welle (DW) reports.

    The new measures will require platforms that transfer bitcoin, as well as "wallet" providers used for holding cryptocurrencies, to identify their users. Limits will be imposed on the use of pre-paid payment cards and transparency requirements for company and trust owners will be raised.

    The measures also give increased access to information for national investigators, including national bank account registers. According to Reuters, access to data on the beneficiaries of trusts will be given to authorities and "persons who can demonstrate a legitimate interest".

    "Today's agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing," the EU's Justice Commissioner said, according to DW.

    Calling the deal a "breakthrough", the rights group Transparency International noted that some elements were still lacking in the measures.

    "However, several loopholes remain, such as the lack of public access to information on the beneficiaries of trusts and similar arrangements. These loopholes should be addressed as EU Member States start to implement these revisions," Transparency International writes on their website.

    READ MORE: Bulgaria Reportedly Owns Enough Bitcoin to Pay Off Fifth of National Debt

    The new rules now need to be formally adopted by the national parliaments and legislatures of all EU member states within 18 months. However, there are still some countries opposed to the moves, including Britain, Malta, Cyprus, Luxembourg and Ireland, DW reports Judith Sargentini, the lawmaker in charge of the issue, as saying.

    Since the beginning of 2017, Bitcoin has surged over 1,700% in value, with an all-time high of over $18,000 in December. According to DW, while the increase in value has increased the legitimacy of the cryptocurrency, it has also stoked fears that the "bitcoin bubble" might soon burst.

    Tags:
    cryptocurrency, paradise papers, Panama Papers, money laundering, terrorism, Bitcoin, European Parliament, European Council, European Union
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