Law Society of England and Wales Tells Members to Be Wary of Bitcoin Use in Transactions
The Law Society of England and Wales said members should treat bitcoin (BTC) as cash and be aware of potential money laundering issues when clients choose to use the cryptocurrency for transactions.
Responding to a question seeking advice on the purchase of a property with the proceeds of bitcoin investment, the professional association for lawyers said while there is no specific guidance, members need to establish the source of funds used to buy the bitcoin.
"This is a cash transaction, so there is a high risk of money laundering," it said in a post on its website. There is a "significant risk" in this transaction that the bitcoin "may be derived from criminal activity."
"Under regulation 33 of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, you must apply enhanced due diligence (EDD) measures dictated by the level of risk and obligations on source of wealth and source of funds."
Membership of the society is included in the cost of a practicing certificate for solicitors in England and Wales. Its judgement on bitcoin therefore is likely to have far-reaching implications for how bitcoin is treated.
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