Europol calls for greater Bitcoin policing powers

Europol, the EU's policing agency, has called for police to be given greater powers to identify criminals using crypto currencies to launder money on the internet.

While users of virtual currencies are not by definition carrying out illegal activities online, they have proved a popular method of transacting on the internet as they are highly anonymous and, by reputation, untraceable.

A new report from Juniper Networks has shown digital monies such as Bitcoin and Litecoin are increasingly the only form of payment accepted by cyber criminals, thanks to these attributes, which also make them easier to launder.

Guest editor's thoughts

There are clear benefits to organisations using bitcoins. Cheap transaction fees, no credit card details to store and hence no PCI issues or hackers trying to get your customer details to name but three. However, if Bitcoins are going to be embraced by the general public, rather than the tech savy few, then their image, in my opinion, needs some work. I for one will certainly want to be happy that I have the same protection and rights I currently enjoy with other payment methods before the allure of a single currency with low/no exchange rate can persuade me to change. I will also want to be 100 per cent convinced that they're not going to suddenly disappear if/when an exchange goes bankrupt. What I want is a paypal for bitcoins...perhaps a new business idea for David Marcus or Carl Icahn? Liam Quinn, IT director, Richmond Events

According to Reuters, Wainright said police forces do not have sufficient powers to operate online and identify groups using the so-called dark net to carry out illicit transactions using digital currencies.

Crypto currencies have experienced a tumultuous 12 months, gaining lots of bad press in the process.

In October 2013, the FBI shut down notorious underground marketplace Silk Road, arrested its alleged founder Ross William Ulbricht and was attempting to seize 600,000 Bitcoins (approximately 48.5 million) in assets.

Additionally, in January 2014, the vice chairman of the Bitcoin Foundation, Charlie Shrem, was arrested and charged by US prosecutors for allegedly conspiring to commit money laundering in relation to Silk Road. His trial is due to start in November.

Furthermore, two Bitcoin exchanges, Mt. Gox and Flexcoin, were forced to shut down early this year following hacking attacks that saw them jountly lose millions of pounds worth of customers' Bitcoins.

In addition to greater policing powers with regard to cryptocurrencies, there have also been calls to normalise their legal and regulatory status.

The European Banking Authority has said it is examining the use of virtual monies and considering possible Europe-wide regulation. Japan, on the other hand, has called for any regulation to be global, in order to avoid loopholes.

Meanwhile, although the UK Financial Conduct Authority has said it does not regulate digital currencies and has no intention of doing so, in March HMRC did changed the way they are taxed, meaning users will be charged income tax, capital gains tax and corporation tax on any profits they make.