A Bit(Coin) of a Problem for the EU AML Framework

Abstract

Virtual currencies have been and continue to be the subject of legal ambiguity and policy fervour. The nature of their creation, evolution and exchange takes place in a complex virtual space where there is tension between entrepreneurial opportunity and criminal utility, leading to tentative temporary solutions in law, policy and practice. This chapter examines the case of bitcoin as an example of the fragmented approach that has been developed in the policing of virtual currencies. In particular, it highlights the challenges faced by Law Enforcement and those in the regulated sector following the extension of the EU Anti-Money Laundering Framework to include aspects of the Bitcoin system.