European Commission wants to abolish bitcoin anonymity

The executive arm of the European Union has proposed a directive that has been designed to help prevent the use of the digital currencies to finance criminal activities and terrorism.

The idea from the European Commission would create a central database holding records of the identities and wallet addresses for users of all cryto-currencies including Bitcoin. This information would then be accessible to member states’ financial and law enforcement officials through a centralised automated search query. The legislation could become law as early as January.

The proposal says that “it seeks to prevent the large-scale concealment of funds that can hinder the effective fight against financial crime and to ensure enhanced corporate transparency so that true beneficial owners of companies or other legal arrangements cannot hide behind undisclosed identities.”

The European Commission is responsible for proposing legislation, implementing decisions, upholding treaties and managing the day-to-day business of the European Union and the draft legislation has been offered as part of reforms to its existing Anti-Money Laundering Directive.

The proposal also states that unfettered access to information is essential to ensure that flows of money can be properly traced and illicit networks and flows detected at an early stage. If the proposal passes, the directive would require Bitcoin users in all of the bloc’s 28 member states including Germany, France, Italy and Finland to have their details registered.

Although not recognising cryto-currencies as actual money, the draft legislation would moreover oblige providers of digital currency wallets to abide by existing know-your-customer measures.