Blockchain News: Cryptocurrency to come under money laundering, disclosure laws

Cryptocurrency is becoming a reality and the need for regulation is urgent.

Many countries are still getting grips on the concept of cryptocurrency, yet the virtual currency is growing by leaps and bounds, without the string of regulations that come with regular currency.

Currency regulation is important in current times for not just the stability of the global economic system, but even for global safety. Money laundering and terror financing are major concerns for global monetary institutions such as the International Monetary Fund. Cryptocurrency, since it is a virtual currency, which is not under the purview of any government, is increasingly raising concerns worldwide.

In this financial environment, US financial regulators such as the US Commodity Futures Trading Commission (CFTC) has raised concerns about cryptocurrency. It has also issued warnings to cryptocurrency holders, that the virtual currency will be held to the rules that control regular currency.

The CFTC, the US Securities and Exchange Commission and the US Financial Crimes Enforcement Network has issued a joint statement. According to the statement, digital assets such as cryptocurrency will come under money laundering laws and require reporting of suspicious activity. Financial laws such as Bank Secrecy Laws will "apply very broadly" according to the regulators.

"The leaders of the U.S. Commodity Futures Trading Commission, the Financial Crimes Enforcement Network, and the U.S. Securities and Exchange Commission (the "Agencies") today issued the following joint statement to remind persons engaged in activities involving digital assets of their anti-money laundering and countering the financing of terrorism (AML/CFT) obligations under the Bank Secrecy Act (BSA)," the regulators stated.

However, the registration norms may vary for cryptocurrency exchanges and cryptocurrency holders.

Firm government regulation may actually hold more security for investors and also make all such currency beholden to the regular rules.

However, grey areas remain. Countries such as North Korea, which have been under harsh financial sanctions have been reportedly trying to create their cryptocurrencies. It remains to be seen whether the pace of regulations will match the pace of development of cryptocurrency.