Virtual currencies ‘need regulation’


The likelihood of crimes based around virtual currencies may be increased by the lack of restrictions governing them, according to a Commonwealth survey carried out in eight countries.

Virtual currencies are anonymised representations of value used for exchanges on the internet.

Currencies such as Bitcoin are widely used for the legitimate buying and selling of goods and services, but the Commonwealth researchers also found that there were not enough regulations in place to counteract the risk of criminal usage.

Opportunities for money laundering, the financing of terrorism and illegal trade exist within the current virtual currency system. Most criminal uses of virtual currencies take place in concealed or obscure parts of the web.

The Commonwealth Virtual Currencies Working Group met in London in August in an effort to find possible routes toward guarding against these threats.

“Collaboration and knowledge sharing is key to counter the risks and maximise the benefits of this rapidly developing technology,” said Katalaina Sapolu, director of the Commonwealth’s Rule of Law Division.

Online currencies don’t have legal tender status and in some countries, such as Bangladesh, they are not legal at all.

However, many other countries recognise it as a legitimate mode of exchange. The Financial Action Task Force this year released guidelines aimed at dealing with the potential for crime posed by virtual currencies.


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