Her Majesty’s Treasury plans to bring crypto use into the “day light,” as it were, by forcing cryptocurrency users to reveal their identities in the United Kingdom.

Naturally, many will liken this development to a crackdown. But what’s really going on? Should U.K. Bitcoiners be concerned or is this much ado about nothing?

Allow us to explain.

Treasury

The U.K. Treasury has crypto users anxious — Image via Faithful+Gould

Governmental concerns over crypto crime rises

Or at least that’s the official slant, right.

A new December 3rd report out of the Telegraph details how the U.K. Treasury is about to conduct a so-called crackdown on anonymous (keyword here: anonymous) Bitcoin and crypto use in the nation.

The problem? Ministers on the Treasury Committee worry that it’s too easy to skip out on taxes and to conduct money laundering as the current regulatory situation in the U.K. stands.

These are tired complaints, to be sure. It’s clear just from an anecdotal “finger on the pulse of the forums” that the vast majority of crypto users today are investors. Not terrorists, or tax cheats, or launderers. Just investors.

So what next?

The Ministers in question don’t want to illegalize crypto altogether. They do, however, want to mitigate investment anonymity to make it easier to track criminals. Accordingly, the Ministers have “plans to regulate the Bitcoin that will force traders in so-called crypto-currencies to disclose their identities and report suspicious activity.”

Ministers on Treasury Committee see regulation as the only way

At the moment, the Treasury Committee members think it’s a bad idea to sit back and watch. They’ve collectively determined that regulating the crypto ecosystem before it gets too far ahead of the letter of the law.

Per Labor Party Minister John Mann, a member of the committee overseeing the Treasury:

“These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get left behind – that’s particularly important in terms of money-laundering, terrorism or pure theft […] 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 things in this country, but that makes it all the more important that we don’t have a regulatory lag.”

A pain in the you know what for privacy … but no reason for grand FUD yet

U.K. Bitcoiners undoubtedly groaned upon hearing of the Treasury’s de-anonymizing plans.

If these plans actualize, then British users will have to use crypto exchanges much like they use their personal banks. Their accounts will be linked to their respective identities to be in line with the nation’s anti-money laundering laws.

The tension between personal privacy and freedom and governmental oversight has been going on for centuries. The Treasury’s plans are just the latest, small milestone in that struggle.

But what is lacking in the Treasury’s proposed de-anonymizing measures is some comprehensive crypto crackdown. Again, Bitcoin use isn’t being illegalized in the nation. To that end, this story poises more of a nuisance for U.K. users rather than any grand cause for fear, uncertainty, and doubt (FUD) — at least for now.

Treasury feels threatened?

Timothy C. May, one of the original cypherpunks, seemingly predicted this kind of antagonism in a now-legendary pamphlet from 1988 called “The Crypto Anarchist Manifesto.”

May noted that:

“The State will of course try to slow or halt the spread of this technology, citing national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration.”

Many users will see a semblance of this dynamic at play in the Treasury Committee’s latest regulatory bid. Rightfully so, it appears.

 

Posted by William M. Peaster

William M. Peaster is a cryptocurrency journalist and copy-editor based out of Pensacola, Florida. He’s an avid fan of Ethereum, ERC-20 tokens, and smart contracts in general. Follow him on Twitter: @WPeaster