The U.S. Justice Department has announced that it is exploring new ways of enforcing regulation in digital currency trading.
Speaking at a conference in Manhattan on Tuesday, Sujit Raman, an assistant deputy attorney general of the department said the anonymity and unregulated status of digital currencies were two areas the department was looking into.
“One of our major concerns is that we don’t know who has access to these virtual currencies, and who is using them. For us to have more visibility into that is very, very important.”
He expressed the Justice Department’s concern that crypto-assets may be funding terrorism and money laundering, adding that plans were underway to get trading platforms and others to collect information on who’s buying and selling the currencies in much the same way as banks do with stocks and bonds.
The anonymity and privacy in digital currency transactions along with its convenience for international trade have for long been the major selling point with cryptocurrencies. According to the New York Post, the proposed regulations could however change all of that and significantly affect the future of the digital currency as we know it.
Speaking at the conference, James McDonald the head of enforcement at the Commodity Futures Trading Commission said; “Participants want to know who is on the other side of the transaction. They want to know that the other entities are going to be playing by the same rules.”
Many however argue that digital coins should be exempt from securities regulations, with many companies including the photography company Kodak, issuing their own private digital currency through ICOs.
However, while speaking on the issue earlier this year, SEC Chairman Jay Clayton said most of the ICO tokens he’s seen would qualify as securities.
“If a person is raising money for a business, or an entrepreneurial idea, and people are giving money to that person with the hope that, if they’re successful, they’re going to make a profit off the efforts of others, that’s a security. That’s raising capital for a business,” Clayton said.