Europe’s largest tax havens are becoming a cryptocurrency hub

What comes to your mind when you hear the word Gibraltar? For many readers, two words: tax havens.

Located on the south coast of Spain, Gibraltar, a British overseas territory, has a population of 33,000 and is known as one of the world’s leading tax havens.according to Taxhavens.biz, Tax-related information Wikipedia, “Gibraltar is also known for providing offshore services such as offshore company establishment, offshore banking, insurance and investment fund management. Gibraltar’s economy relies heavily on the offshore financial sector. I am. ”

But things are changing and seem fast. The leopard is desperately trying to change its location.

Spain removed Gibraltar from its tax havens list last year after reaching an agreement on tax cooperation with the United Kingdom. The Government of Gibraltar seems to be doing everything in its power to restore the country’s rather dubious reputation.

So why is Gibraltar trying to become Europe’s premier crypto hub?

In the last week of December Guardian reportedThe government will soon allow traditional bonds to “trade with major cryptocurrencies such as Bitcoin and Dogecoin.” Yes, Dogecoin, the world’s first “meme coin”, Quote its creator, Means “joke”. However, the relationship between cryptocurrencies and money laundering is not a joke. Cryptocurrencies have become synonymous with money laundering because they provide a lot of anonymity. Today, like Bitcoin and its 10,000 siblings, sending illegal money anywhere in the world has never been easier.

Therefore, Gibraltar, a place known (or once known) for providing homes to tax evaders, could soon provide homes to crypto-savvy money launderers. Is this an accurate assumption or an overall over-generalization? TRT World Reached out to Nathan C. Goldman, He is a professor of accounting at North Carolina State University and an expert in money laundering.

According to Goldman, cryptocurrencies “promote money laundering by providing a platform for conducting personal transactions without the knowledge of government or tax authorities.”

The parties “achieve this by first using illegal funds to buy cryptocurrencies. Often, exchanges have various regulatory requirements that allow them to be purchased from the exchange. You can move to the exchange. Parties also often buy lesser-known cryptocurrencies that may have less oversight and visibility to the authorities. Second, they are purchased using illegal funds. Cryptocurrencies are used to buy other cryptocurrencies. It helps to hide paper trails, allows illegal funds to be converted to more famous cryptocurrencies, and various funds. Strengthen the ability to move to different countries. ”

Finally, Goldman said, “Using these cleaner cryptocurrencies, the parties can act as an intermediary to sell cryptocurrencies through counter brokers, thereby cleaning / laundering these funds. You can do it like that. “

Cryptography for criminals is an exaggeration

So why does Gibraltar, a country desperately trying to restore that image, appear to be a crypto hub? We need some perspectives. Goldman emphasized: “Cryptocurrencies are not used for money laundering as a whole, and it is worth emphasizing that most people who buy and sell cryptocurrencies are not money laundering.”

“But in recent years, more and more parties are involved in cryptocurrencies, prices have skyrocketed, and more parties are accepting cryptocurrencies for payment, raising concerns (ie, gambling websites, Tesla, etc.). These items are leading the government. Like the United States, we will introduce stricter tracking and reporting rules for cryptocurrencies. “

Carol Goforce, Leading experts Regarding the regulation of crypto assets, it seems to support the movement of Gibraltar. “I think the rhetoric about’cryptography is for criminals’ is exaggerated,” she said. TRT World..

After all, she added: In addition, historically, Gibraltar has a record of compliance with FATF AML requirements, and as of the latest assessment (2019), there is no record of terrorist funding, whether e-commerce or not. did. I’m not a legal expert in Gibraltar, but companies using distributed ledger technology comply with EU directives on this subject and have a related financial business with KYC (know customer) and AML requirements. I think it is considered. “

In the Guardian article mentioned above, Albert Isola, the Minister of Digital, Financial Services and Utilities in Gibraltar, told readers that Gibraltar may have been a “tax haven 20 years ago”, but since then, ” The territory is currently a tax and information sharing policy. “

The introduction of cryptographic regulations is said to have “similar effects. It eradicates malicious individuals and provides investors with a guarantee.” For bad actors, Isola had some bad news: “If you want to do crypto naughty things, you’re not in Gibraltar, because the company is licensed and regulated and they Nowhere else in the world. ”

However, criminals can still do money laundering just because the company is licensed and regulated. “Of course, there is no guarantee in the world, but transactions in Gibraltar are regulated and subject to surveillance,” says Goforth.

How does this affect a criminal’s ability to make a living? Goforth replied: “Criminals are more likely to see transactions that do not go through intermediaries who are obliged to collect identification information, maintain records, and share reports. Gibraltar provides a regulated environment. The fact that they are will make it harder for criminals to use cryptography rather than facilitating traditional money laundering and funding for illegal activities. “In her opinion,” Isola is right. ” And, mischievous people need to look elsewhere.

According to Dr. Goldman, “License and regulation do not completely prevent companies from engaging in illegal activities, but they may mitigate those activities. Money laundering is unique to Gibraltar. It’s not a thing, and it may still be at a higher level after the reform. It’s higher than many other countries, but activity in Gibraltar is probably since the reform was implemented. It should be noted that it is declining. “

Therefore, contrary to common beliefs (and objective reality), leopards seem to be able to change their location. A country that was once synonymous with shaded business practices is changing its image. The Government of Gibraltar seems to be adopting cryptocurrencies in the hope of preventing criminal activity rather than enabling it.

Source: TRT World