The European Commission wants to take away anonymity from the virtual currencies by taking the user registers on a database so that they can be tracked. This proposal would provide EU with a huge record that contains the real-world identities of all the people who use cryptocurrencies and also the addresses of the virtual wallets where the money is held.
Forms of Cryptocurrencies like Bitcoin can not be traced, thus making them a very popular choice for the cyber-criminals to fund their illegal activities. Most of the Ransomware attacks, for example, demand payments in the form of Bitcoin because it just leaves no identifiable paper trail to its source.
Reports from Softpedia say that the EU wants to have a database of cryptocurrency. This is a part of its Anti-Money Laundering Directive (AMLD) reform, which is included to broadened the so-called virtual currencies.
Governments faced many struggles to incorporate the cryptocurrency into current laws because it is not usually recognized as actual money by many financial institutions. And just this week, one of Miami judges threw out a case against the man who is accused of illegally laundering $1,500 worth of Bitcoin after ruling that his actions did not breach current laws of money laundering.
This would see the EU create a database that links cryptocurrencies to their users, effectively ending anonymity. This would be created by the intelligence services of member states.
At the same time, providers of digital currency wallets that are essentially the cryptocurrency equivalent of a bank account would be required to make European users register with their real information, which would then be accessible to financial intelligence services. The EU hopes that by doing so it will discourage the use of virtual currencies in crimes involving human trafficking, black market trading and extortion to name but a few, or at least make it possible to trace those responsible.