Treasury Eyes Bitcoin Crackdown

The measures will include forcing traders to disclose their identities and report suspicious activity, according to The Telegraph, to bring it in line with rules on anti-money laundering and counter-terrorism financial legislation.

John Mann, a member of the Treasury Select Committee said the new rules will be applied across the European Union and will come into force by the end of this year or in early 2018.

Bitcoin and other digital currencies can be traded anonymously, making it attractive to those who wish to 'wash' money or those looking to avoid paying the correct tax.

Mann was quoted: "These new forms of exchange are expanding rapidly and we have got to make sure we do not get left behind - that is particularly important in terms of money-laundering, terrorism or pure theft.

"I am not convinced that the regulatory authorities are keeping up to speed. I would be surprised if the committee doesn't have an inquiry next year.

"It would be timely to have a proper look at what this means. It may be that we want to speed up our use of these kinds of thing in this country, but that makes it all the more important that we don't have a regulatory lag."

Last week, Bitcoin soared through $10,000 to reach a fresh high of $11,155.20, just says after it had reached $9,000. 

The recent surge in prices has been driven by the world's largest derivatives exchange operator CME Group last week announcing it would start offering Bitcoin futures as early as December, according to Bloomberg.

However, there has been some concern about Bitcoin's rise with BoE deputy governor Sir Jon Cunliffe telling BBC Radio 5 Live this morning: "This is not a currency in the accepted sense. There is no central bank that stands behind it. For me it is much more like a commodity.

"This is not at a size where it is a macroeconomic risk to the global economy, but when prices are moving like that, my view would be investors need to do their homework."

The Treasury changes, which were unveiled in plans to change the legislation in a written parliamentary answer from Stephen Barclay, the Economic Secretary to the Treasury, come amid increasing fears Bitcoin is being used by gangs to conceal criminal earnings.

The number of Bitcoin users is estimated at about three million worldwide, according to a Cambridge University study, but it is unclear how many of them are in the UK.