The NCA requested digital assets mixing technology regulation, considering that criminals can use this method to legitimize illegal operations.
According to a report in the Financial Times, the UK’s National Crime Agency (NCA) urged for regulation of crypto assets mixing technology able to cover traceable operations carried out on the blockchain, according to a report in the Financial Times.
Criminals can execute cryptocurrency mixers to disguise the origin of the digital currency through multiple parties contributing many inputs to operations like a transaction, vanishing the exact details of its origin.
In an interview, Gary Cathcar told Financial Times that this procedure could help provide a layering service, churning out criminal cash that covers its origins and audit trails, similar to how criminals can use the cash business to legitimize cash through the banking system.
The NCA clarified it is currently looking for regulation that would need mixers to comply with money laundering policies, periodic client checks, and audit trails of funds housed on their networks.
According to CoinDesk, CoinJoin usage reached a peak, valued at 65,000 BTC ($2.5 billion) in January 2021, which runs parallel to at least 0.35% of total Bitcoin operations that month.
Stronger Measures in the UK
The UK has experienced some crackdowns impacting the crypto environment. on Friday, March 11, the UK Financial Conduct Authority (FCA) ordered all crypto ATM operators to immediately suspend their ATM services to customers.
ATMs must comply with registration in the FCA, and none so far are complying with that rule. It is not the only action the FCA has made lately regarding digital assets. Just this month, it reported that it was leading an investigation of at least 50 cryptocurrency companies and managed to review more than 300 cases linked to digital currencies.
The financial watchdog led fifty investigations, including “criminal investigations” into companies that operate with digital currencies and have not registered with them. The cases got opened after the FCA struggled with thousands of complaints about deceiving attacks.
Most scams reported to the FCA included crypto-asset scams, boiler rooms, and recovery rooms,” reads the body’s consumer investment data review statement. The FCA also added in a separate entry detailing the complaints, there was an increase in crypto fraud reports.
On the other hand, the United Kingdom highlighted in January that it would further apply stricter rules on cryptocurrency advertising to prevent misleading encouragements and protect customers from false promotions.
Wasabi Wallet Bans
Crypto exchanges and wallet developers such as Wasabi have responded to crypto-assets mixing by suspending all financial operations from services that work with CoinJoins.
According to a Coindesk report, a Wasabi developer highlighted that the move was necessary to prevent attackers and deceivers from using the service and keep the company out of unspecified troubles. The decision highlights the challenges experienced by centralized companies providing services built to make interaction with a decentralized ecosystem easier.
By: Jenson Nuñez
