The U.K. government is planning regulation of bitcoin and other cryptocurrencies amid growing concerns that they are being used for money laundering and tax evasion purposes.

According to The Daily Telegraph, new rules will soon be introduced to ensure that traders are no longer able to buy and sell bitcoins and other digital currencies anonymously. Under the changes, which will be applied across the European Union and are expected to come into force by the end of the year or early 2018, cryptocurrency traders will be forced to disclose their identities to help online platforms monitor suspicious activity.

The plans reflect the U.K. Treasury’s desire to bring cryptocurrency regulation in line with anti-money laundering and counter-terrorism financial legislation.

News of the regulatory crackdown came after bitcoin hit a record high of $11,800 on Sunday. Bitcoin fell to $10,554 when the story emerged, according to the Guardian, but has since recovered most of those losses. (See also: Bitcoin Price Defies Critics, Crosses $11,000 Again.)

John Mann, a member of the U.K. Treasury select committee, told The Daily Telegraph that an inquiry into the regulation of bitcoin and other cryptocurrencies was necessary given their growing popularity. He expects an official inquiry to be held in the new year.

"These new forms of exchange are expanding rapidly and we've got to make sure we don't get left behind — that's particularly important in terms of money-laundering, terrorism or pure theft,” said Mann. 

He added: "It would be timely to have a proper look at what this means. It may be that we want to speed up our use of these kinds of thing in this country, but that makes it all the more important that we don't have a regulatory lag."

Stephen Barclay, the economic secretary to the U.K. Treasury, mentioned the government's plans to crackdown on cryptocurrencies in a written parliamentary answer in October. (See also: Bitcoin Should Be Outlawed, Says Nobel Prize Winner Joseph Stiglitz.)

“The U.K. government is currently negotiating amendments to the anti-money laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas,” he said. “The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017 or early 2018.”