Central Banks Crack Down on OTC Bitcoin Trading12

Central banks are increasingly cracking down on over-the-counter (OTC) Bitcoin trading in an effort to curb money laundering and other illicit activities. In a recent move, the Bank of England (BoE) announced that it would require all cryptocurrency exchanges operating in the UK to register with the Financial Conduct Authority (FCA) by June 30, 2023. The FCA will then conduct due diligence checks on the exchanges to ensure that they are compliant with anti-money laundering and counter-terrorist financing regulations.

The move by the BoE is part of a broader crackdown on OTC Bitcoin trading by central banks around the world. In the United States, the Securities and Exchange Commission (SEC) has been investigating OTC Bitcoin trading platforms for potential violations of securities laws. The SEC has also issued subpoenas to several cryptocurrency exchanges, demanding information about their OTC trading activities.

The crackdown on OTC Bitcoin trading is a response to the growing use of cryptocurrency for illicit activities. In 2021, blockchain analysis firm Chainalysis estimated that $14 billion worth of cryptocurrency was used for illegal transactions. OTC Bitcoin trading is particularly attractive to criminals because it allows them to avoid the scrutiny of regulated exchanges.

Central banks are concerned that the use of cryptocurrency for illicit activities is undermining their efforts to maintain financial stability. They are also worried that cryptocurrency could be used to finance terrorism or other national security threats.

The crackdown on OTC Bitcoin trading is likely to have a significant impact on the cryptocurrency market. OTC trading is a major source of liquidity for Bitcoin, and its disruption could lead to a decline in the price of Bitcoin.

Conclusion

The crackdown on OTC Bitcoin trading is a sign that central banks are taking the threat of cryptocurrency seriously. They are determined to prevent cryptocurrency from being used for illicit activities and to protect the financial system from the risks it poses. The crackdown is likely to have a significant impact on the cryptocurrency market, and it could lead to a decline in the price of Bitcoin.

2025-02-02

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