Reason For Bitcoin Sudden Plunge Revealed: UK Plans Regulatory Crackdown On Cryptocurrencies

Tyler Durden's picture

Just after 430pm ET we showed that bitcoin, and the entire crypto space, tumbled, with Bitcoin plunging from session highs just under $12,000 to a low of $10,600 on what appeared at first sight to be no news.

However, in retrospect this appears to not have been the case, and as the Telegraph reported just around the time of the big drop, UK "ministers are launching a crackdown on the virtual currency Bitcoin amid growing concern it is being used to launder money and dodge tax."

Taking a page out of the Chinese playbook, the UK Treasury has announced plans to regulate the Bitcoin that will force traders in so-called crypto-currencies to disclose their identities and report suspicious activity. 

According to the Telegraph, while "until now, anybody buying and selling Bitcoins and other  digital currencies have been able to do so anonymously, making it attractive to criminals and tax avoiders. But the Treasury has now said it intends to begin regulating the virtual currency, which has a total value of £145 billion, to bring it in line with rules on anti-money laundering and counter-terrorism financial legislation."

John Mann, a member of the Treasury select committee, said he expected to hold an inquiry into the need for better regulation of Bitcoin and other alternative currencies in the new year.


He said: "These new forms of exchange are expanding rapidly and we've got to make sure we don't get left behind - that's particularly important in terms of money-laundering, terrorism or pure theft.


"I'm not convinced that the regulatory authorities are keeping up to speed. I would be surprised if the committee doesn't have an inquiry next year. "It would be timely to have a proper look at what this means. It may be that we want speed up our use of these kinds of thing in this country, but that makes it all the more important that we don't have a regulatory lag."

The proposed changes come amid increasing fears that Bitcoin is being used by gangs to launder the proceeds of crime while also attracting currency speculators - with the value of the coin soaring in the past 12 months.

In other words, the same reason why the IRS is cracking down on Coinbase clients in the US is also why UK and European regulators are joining China in cracking down on capital flight.

While such legislation by the UK alone would hardly have a major impact on crypto pricing - after all the UK is a very minor player in a market that is dominated by Korea and Japan (as proxies for China), and to a growing extent, the US, the new rules will also be applied across the European Union, and "are expected to come into force by the end of the year or early in 2018, the minister in charge has said."

As for the EU, the new regulations are expected to be included in amendments to current European Union wide legislation designed to prevent money laundering and terrorism financing. 

In terms of actual changes, the Telegraph notes that cryptocurrency exchange platforms and wallet providers will be obliged to report suspicious transactions and carry out due diligence on customers. That means the identities of Bitcoin users will no longer remain anonymous.

Stephen Barclay, the Economic Secretary to the Treasury, revealed plans to change the legislation in a written parliamentary answer.

Mr Barclay said: “The UK government is currently negotiating amendments [to the anti-money-laundering directive] that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas.  “We expect these negotiations to conclude at EU level in late 2017/early 2018.”


A Treasury spokesman said last night: “We intend to update regulation to bring virtual currency exchange platforms into Anti-Money Laundering and Counter-Terrorist Financing regulation.”

That said, neither the UK, nor the EU will be the first to demand a crackdown on bitcoin anonymity. In fact, since China's infamous block of cryptocurrency exchanges in September, bitcoin has risen nearly fourfold, seemingly undaunted by anything that regulators, central banks and sovereigns have thrown at it.

It remains to be seen if this time will be any different, although after sliding to a Sunday session low of $10,600 bitcoin has already cut its losses in half, and was trading at $11,280 at last check.

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DownWithYogaPants's picture

Bank of England Rothschild bank has English government taking dictation. Says slow down that competing currency.  Big surprise!  NOT.

BaBaBouy's picture

Finally Jimmie Diamond Get a Win...

eforce's picture

"John Mann"

A labour party socialist, not in power.

MagicHandPuppet's picture

Reason For Bitcoin Sudden Plunge Revealed:

(((They))) don't like competition

Took Red Pill's picture

The twin brothers who Zuckerberg screwed are now billionaires after investing their lawsuit winnings in bitcoin.

philipat's picture

I'm not overboard on Bitcoin but it is, at least until Bitcoin Futures start trading, something that cannot be officially manipulated and so to be welcomed as possibly the ONLY free market with real price discovery left standing? Hence, it was only a matter of time before Governments wanted to restore their monopoly on ponzi schemes.

And the always, "Terrorism". It's for your good you know?

It might also be pointed out that the only reason there is any tax liability is because Bitcoin has been wildly successful in a free market devoid of Government manipulation. As soon as that changes, there may no longer be any tax liability. But we still have "Terrorism" as the gift that keeps on giving. To Governments......

fx's picture

When futures trading will commence, things will get very interesting, indeed. Will the CME/Nasdaq dominate price discovery? What will happen on weekends, i.e.would anyone want to hold a sizeable open futures position over the weekend when the fireworks may start in Korea while your futures position may get killed? Will Asia teach the CME/Nasdaq a lesson over weekends? Or will the CME/Nasdaq do so towards Asians come workdays?

Will that actually slow down the BTC price rise (or even reverse it) and will other cryptos (Bitcoin cash, eth, eos etc) get more consideration and will appreciate relative to BTC?


My answer to all the questions raised above is "yes", btw, though it is little more than a  semi-educated guess.

philipat's picture

Yes agreed and also agree that we can only guess at this stage. The CB/BIS/ESF complex has no concern about paper losses, as has been so evident in the paper dumps of PM's on Comex, because it's only paper and they can print as much as they need to achieve their policy objectives?

???ö?'s picture

Of course the Rothchilds, umm ...  U.K. Regulators want to crack down on Bitcoin.  It's an existential threat to their world banking CARTEL, which would be illegal in any other setting.   

Funding Nazis was fine though.  Also okay to start WWI by bankrupting Germany. No problem financing the opium trade with China or manipulating precious metals prices ... and on and on and on.

The real question is when will America shed itself of the conniving, bucktooth, odorous, U.K. queers instead of aping those royal child molesting fucks.

MonetaryApostate's picture

Finally, someone who shares my sentiments!

Fake money, fake debt, fake value, fake news, fake investments, fake markets, fake history, yes, fake everything!

Luc X. Ifer's picture

Useless - the genie is out of the bottle, resistence is futile. Adapt & evolve or not and perish.

MonetaryApostate's picture

You have limited thinking, I could build us things your mind couldn't possibly comprehend, & yet you think we are powerless, but something simple as oil & a match can cause much damage!

Maybe when serfs start storming the UK and lighting everything on fire, they'll begin to see the power of respecting the peons they love to piss on, & though I know they'll never respect us, but God isn't going to save the queen, sorry.  Too much bloodshed & pedophilia in the UK.

Luc X. Ifer's picture

Retard - I work in the AI and Blockchain field daily. Get the fuck off and wait for your imaginary friend to save or punish you.

fx's picture

If so, it would be pretty ironic that the "acceptance" of BTC by the financial cleptocraty would be BTC's ultimate undoing, and at the same time it would be paving the way for all the other cryptos (many of which are technically superior to BTC anyway). Would be an interesting race then - whatever crypto becomes too strong will get futures listed - and killed via that route.

2rigged2fail's picture

Good read on what happens after CME kicks in.  We will go up for a while then crash.

BennyBoy's picture








tmosley's picture

That is an extraordinarily emotional sentiment you have there. Are you quite certain you are thinking clearly? There is a nuance to the problems with the current bull run.

Michigander's picture

Just a bunch of governmental feel good nonsense. They think they have control but it is only limited in nature. Buying crypto and moving it from the exchange is just like cashing a check at your bank and then pulling the cash. Once it’s out, there is no reasonable tracking mechanisms anymore. Any transaction with a non business identity is just like cash. Buy a used car from a private party with BTC or cash…no tax. So sure, the KYC exchange portals are currently the choke point of control. That too will pass as decentralizes P2P trading develops further.


webmatex's picture



Mr Barclay said: “The UK government is currently negotiating amendments [to the anti-money-laundering directive] that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas.

So just keep it in your offline wallets.

MonetaryApostate's picture

Bullshit run is more like it.

philipat's picture

Dup. Sorry, slow Internet today.

old naughty's picture

holy crap, 

COL strikes back...

Croesus's picture

April 2013:

"DotGov can step in at anytime, and shut it down under the Patriot Act, or some similar law, on the grounds that it's being used to fund terrorist activities/drug running/money laundering/kiddie porn/ illegal downloading."

Not saying the guys who bought didn't do well; they certainly did. The inane cheerleading, more than anything else, is what turned me off about it: "It's going to change EVERYTHING"...yup, until it runs into a wall of bankers and politicians who want their pound of flesh for free.

SickDollar's picture

Here comes the .gov  and banks  to control it  BITCHEZ


Whisky Zero's picture

Oh my, the government could shut down the Internet to eliminate the competition from Crypto.  The same Internet DARPA envisioned surviving the apocalypse?   What will we do?


fx's picture

Yawn. So UK ministers are mulling to look into regulating that stuff a bit more over the coming few months. Stop the presses! Not!

If that is indeed the only news/factor behind the 10-15% drop then I fully expect BTC to surpass $12,000 not later than coming Tuesday.

95% of people who flock into BTC now do not do so to avoid taxes, launder money  or do other illegal stuff. They simply want to gamble on much higher prices down the road. So they couldn't care less. The people who really sold here below $11,000 based on this nonsensical "news" will likely deeply regret it.

In other news, a nuclear war was announced to start early next year, prompting the S&P500 to spike to yet another record high. MSM were quick to point out that cryprocurrencies were in an epic bubble, while urging people to buy the still undervalued stock market instead.

???ö?'s picture

The crowd buys cryptocurrency because everybody's sick of the banking CARTEL and the computer nerds finally got pissed enough to do something about it.

greenskeeper carl's picture

"MSM were quick to point out that cryprocurrencies were in an epic bubble, while urging people to buy the still undervalued stock market instead."


Thats what cracks me up about all this. The same shills that are telling everyone to buy stocks, which happen to be the same types of people insisting everything was fine a few years back when it was, in fact, completely going to shit, are saying bitcoin is in a bubble, trust us we're the experts. We may not have seen any of the bubbles or crashes in recent history, but trust us.

AlexCharting's picture

Death and taxes...  death and fucking taxes!

fx's picture

accidental double post. deleted

nmewn's picture

But but but...IT'S A WORLD WIDE >>>CURRENCY<<< totally unrestrained by any governments petty regulations!

Or access through their internet POP's ;-)

peddling-fiction's picture

"Or access through their internet POP's ;-)"

And the hidden internet firewalls, that are ready to activate at moments notice.

<click> and you are blocked to do transactions.

Your overseas proxy servers also do not seem to respond.


nmewn's picture

The same people advocating for ether "currencies" know ALL governments have the passages mined and monitored yet, they persist, I can't figure out the willful cognitive dissonance.

But hey! We're all big boys & girls here!

I just don't wanna hear a bunch of bellyaching about some greedy bastard buying at the top of this ponzi, they were warned more times than I care to count.

peddling-fiction's picture

We will hear wailing, howling and gnashing of teeth.

We did our part to warn our fellow speculators.


Don't worry. tmosley went no comment dark for a number of years after pulling the same buy the blow off top in silver cheerleader mentality he currently exhibits with crypto.

Nothing but crickets for several years from the crypto van down by the river when it tanks, methinks..  

ZH Snob's picture

it's already plunged back to 11.2K

HRClinton's picture

"These new forms of exchange are expanding rapidly and we've got to make sure we don't get left behind - that's particularly important in terms of money-laundering, terrorism or pure theft."

LMAO. The #1 vehicle for these 'problems' is the USD and other fiat currencies -- like the GBP -- all of which are Plantation Currencies for Plantation Debt Slaves.

BTC is the currency of the Parallel Economy, which is the currency of Plantation Escapees.

Once you're off the Plantation, you gotta stop having direct contact between CC and Fiat, lest you create both a Taxation link and Tracking link.

PM + CC + Gems + Cash = Currency of Parallel Economy 

Shift, trade and convert these for goods and services, but be sure to...

Convert CC into PM (also decentralized and untrackable) and from PM into fiat, if you chose to use Plantation currency. 

Got brains? Got clarity? Got tradecraft? Got guts? Use them or get some.

LostandFound's picture

People should be front running this nonsense and moving currency towards decentralised exchanges, because the world gov's are going to wrap the central exchanges regulatory tape in the next few years. 

Therefore you have the following risks:

  • Using centralised exchanges that will be forced to show your identity and transactions 
  • Using centralised exchanges which have the keys to your addresses 

Considering the above, you would be crazy to utilise them

Move to the DEX, move to BitShares

Schmuck Raker's picture

Guess I better pull the .2BTC I left on Bitstamp.

KingFiat's picture

Don't forget your Bitcoin Cash. You have that too if you had a Bitcoin amount at Bitstamp at the time of the fork.

tmosley's picture

Headline reading bots trading crypto now?

0valueleft's picture

Of course, if you think of an angle it's already in play.

any_mouse's picture

Bots flash crash crypto by exchanging at lower and lower prices.

The same owner owns the bots' wallets.

Nothing is hacked.

The blockchain is intact.

Owner buys crypto all the way down.

Maybe we will see Nanex articles again.

Cognitive Dissonance's picture

You didn’t think the “authorities” were going to be left at the curb...did you?

Crazy Or Not's picture

I feel sorry for the financial advice Stripper...." Now get back on the damn pole! "

nmewn's picture

Don't forget to "tip the kitty"...for her rock solid financial advice ;-)

Lumberjack's picture

You mean honest Hill’ry?