Earlier in May this year, ForexMinute reported that the Bank of Italy had questioned Bitcoin and issued a warning to users; now, three Italian institutions have issued several warnings and asked for new legislation to eliminate loopholes and regulatory ambiguity. Like the Bank of Italy, they also believe that there is lack of any mechanism to regulate Bitcoin investments.
Money laundering and anonymity have been the two major issues that the government is worried about. According to a report on the Italian financial information system (FIU), the Bank of Italy believes that Bitcoin poses a potential risk as it can be employed to circumvent money laundering regulations or funnel funds to terrorist organizations.
According to the FIU which has been examining Bitcoin’s potential for illicit activities and looking at complaints involving suspect Bitcoin transactions, the organization believes that while transactions are recorded in an online database, it is hard to identify the parties involved; thus, there cannot be any action against those who are laundering money.
The views from the FIU are shared by Colonel Albert Reda of the Guardia di Finanza, Italy’s financial police authority. Currently, it’s the Guardia di Finanza which is has any authority and resources to deal with Bitcoin; however, it believes that there are some major risks involved in Bitcoin for investors.
Volatility, Anonymity and lack of Regulation are Major Concerns Say Italian Authorities
According to Reda Bitcoin’s volatility poses a risk for investors and that its anonymity allows Italian residents to hold and transfer wealth anonymously. He believes that the Guardia di Finanza which is involved in an ongoing investigation is looking out for the case of Bitcoin and come out with any official views soon.
However, he made it clear that the absence of any form of regulation makes the digital currency a potentially powerful tool for money laundering, drug trafficking and arms trafficking. Apart from the accusation that Bitcoin is being used for contraband activities, the digital currency is also being abused that as it is not regulated it has hefty risk for investors.
Expressing his views on Bitcoin regulation, attorney General of Rome, Luigi Ciampoli, warned that Bitcoin could be abused by criminals engaged in money laundering, financing of terrorism, or mafia activities. According to him Bitcoin regulation would allow authorities to trace and identify all persons involved in digital currency transactions.
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