Regulators, Bitcoin group discuss digital currency

WASHINGTON Mon Aug 26, 2013 6:08pm EDT

WASHINGTON (Reuters) - U.S. regulators and law enforcement agencies met on Monday with an advocacy group for Bitcoin, a digital currency that has been under fire for its purported role in facilitating anonymous money transfers.

Jennifer Shasky-Calvery, director of the Financial Crimes Enforcement Network (FinCEN), said her unit hosted a presentation by members of the Bitcoin Foundation, an advocacy group of Bitcoin-related businesses.

"This is part of our ongoing dialogue aimed at enhancing communication with our regulated financial industries," Shasky-Calvery said in a statement.

She also noted that virtual currency exchanges must register with regulators and face requirements similar to those imposed on other financial firms. FinCEN is the Treasury Department's anti-money laundering unit.

Bitcoins, which have been around since 2008, are a form of electronic money that can be exchanged without using traditional banking or money transfer systems.

Bitcoins are the most prominent of these new currencies, which have come under scrutiny from regulators and law enforcement officials.

Representatives of the Bitcoin Foundation did not immediately respond to requests for comment. The group's website says it aims to make the currency more respected and to improve and protect its integrity.

The currency first came under scrutiny by law enforcement officials in mid-2011 after media reports surfaced linking the digital currency to the Silk Road online marketplace where marijuana, heroin, LSD and other illicit drugs are sold.

In recent months, the U.S. government has taken steps to rein in the currency and more regulatory action is expected.

Tokyo-based Mt. Gox, the world's largest exchanger of U.S. dollars with Bitcoins, had two accounts held by its U.S. subsidiary seized this year by agents from the Department of Homeland Security on the grounds that it was operating a money transmitting business without a license.

The Federal Bureau of Investigation reported last year that Bitcoin was used by criminals to move money around the world, and the U.S. Treasury said in March that digital currency firms are money transmitters and must comply with rules that combat money laundering.

The Senate Committee on Homeland Security and Government Affairs launched an inquiry into Bitcoin and other virtual currencies earlier this month, asking a range of regulators to list what safeguards are in place to prevent criminal activity.

(Reporting by Brett Wolf. Editing by Andre Grenon)

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Comments (1)
KStreet wrote:
I can honestly say that I do not know enough about bitcoin, it is a relevantly new form of a ‘currency’ or type of barter system (as far as I know doesn’t require a ‘license’, but not sure), so far from what I have read about it is seems fairly straightforward.

Better understanding of bitcoin is certainly warranted, so that everyone gets a fair pricing of exchange with goods and services, and people who ‘lease’ time on their computers.

I don’t advocate the crime(s) committed, and some charges may be legitimate and justified. Nevertheless, they are no different than crimes committed with present currency, HSBC for example – which we can safely assume the regulators and law enforcement will pursue criminal charges similarly, right? What about offshore accounts that deliberately avoid taxation, as another example.

The list of examples can go on and on… I am wondering where those ‘safeguards’ were then.

For all intent and purposes, this appears to be nothing more than a smear campaign typically found in history that, in this case, bitcoin threatens present day monetary systems.

I like cash, for more than faux-credit, and bitcoin appears to the closest thing to cash in a long time, in the last 100 years.

Aug 26, 2013 2:18pm EDT  --  Report as abuse
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