Bitcoin Transparency & Money Laundering Risks: ECB Official
Known Bitcoin critic Ewald Nowotny, member of the Governing Council of the European Central Bank, has adopted an even tougher position on Bitcoin, claiming the risk of criminal activities being conducted with cryptocurrencies is serious enough to warrant the involvement of law enforcement agencies.
"Bitcoins weren’t created transparently and publicly, and they are suitable for money laundering. For a long time, I had the view that investment in Bitcoin should be a private matter. But I got the feeling that a legal provision is needed."
While Nowotny has never been a fan of Bitcoin, his previous statements on the cryptocurrency were merely dismissive of its potential as a store of value, and limited to criticizing its lack of worth as a currency.
Now, however, as the ECB prepares to tighten the noose around cryptocurrencies, Nowotny is also calling for stricter regulation of Bitcoin and its peers. He pointed out that the investigation of savings associations for compliance with AML rules is “absurd”, while with Bitcoin “the floodgates are open”.
"I like what the Chinese central bank governor has said: Bitcoins aren’t a matter for monetary policy in China, but for the police."
Meanwhile, the Austrian central bank governor is not the only one pushing for more stringent checks on cryptocurrencies. South Korea recently banned all anonymous crypto trading accounts, China (where crypto trading and ICOs are already banned) is in the process of ushering Bitcoin miners towards an “orderly exit” from the country, and India’s finance minister recently issued a stern statement against Bitcoin and its users. France and Germany have also joined forces to draft regulations for the crypto market, which they plan to present at the upcoming G20 summit in March.
In other developments, the Bitfinex exchange was subpoenaed in December last year, leading to a loss of confidence in the already-shadowy USDT, the circulating supply of which, unsettlingly, continues to increase. Social media giants Facebook and Instagram also added to the growing panic in the crypto market when they recently banned all ads related to cryptocurrencies and ICOs, in a bid to curb “misleading or deceptive promotional practices”.
Under the onslaught of increased regulatory pressure and discouraging developments which have spooked investors, the crypto market has crashed and Bitcoin has buckled, plunging below $8,500 and losing more than half its value in six weeks.
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