Lagarde slams Bitcoin over ‘reprehensible money laundering’

EUROPEAN Central Bank (ECB) President Christine Lagarde took aim at Bitcoin’s role in facilitating criminal activity, saying the cryptocurrency has been enabling “funny business”.

“For those who had assumed that it might turn into a currency – terribly sorry, but this is an asset and it’s a highly speculative asset which has conducted some funny business and some interesting and totally reprehensible moneylaundering activity,” Ms Lagarde said in an online event organized by Reuters.

The remarks, made in a conversation largely focused on the euro area’s economic outlook, show top policymakers are taking notice as a speculative fever sweeps cryptocurrency markets.

Bitcoin prices have more than doubled since November and topped a record $41,000 (€33,700) earlier this month.

Bitcoin offers users a degree of anonymity, making it a popular vehicle for criminal behaviour.

On Tuesday, German police took down what they believe was the world’s largest illegal ‘Darknet’ marketplace, shuttering a platform that about half a million people used to trade drugs and cryptocurrencies including Bitcoin.

Central banks, including the ECB, are increasingly focused on developing their own digital currencies. In part they’re being spurred by the attention given to cryptocurrencies and the desire to offer an official alternative to cash for the digital age.

Concerns over money laundering and the ability of financial firms to know the identities of their clients have been at the forefront of the cryptocurrency debate.

Bitcoin was little changed at $34,661 in London yesterday afternoon. The market’s volatility has whipsawed investors over the past few days, with prices falling as much as 6.8pc during the Asia session.