The popularity of the digital currency Bitcoin is exploding. Today’s price spiked over $600, nearly double what is was just over a week ago. It seems the U.S. government now wants into the party.
Today several federal agencies weighed in on the decentralized currency. While most agencies acknowledged its legitimate uses, the Department of Homeland Security referred to Bitcoin as an emerging threat.
In a letter to the Senate Committee on Homeland Security and Governmental Affairs, DHS wrote that they have “been actively investigating the emerging threat and criminal exploitation of virtual currency systems that further transnational criminal operations.”
DHS blamed “anonymity in cyberspace” and called for an aggressive posture to deal with Bitcoin and other crypto-currencies.
“The anonymity of cyberspace affords a unique opportunity for criminal organizations to launder huge sums of money undetected,” they wrote. “With the advent of virtual currencies and the ease with which financial transactions can be exploited by criminal organizations, DHS has recognized the need for an aggressive posture toward this evolving trend.”
Besides targeting suspected black markets like Silk Road and so-called transnational criminal networks with an aggressive posture, the DHS also targets all virtual currency platforms and exchanges.
“The multi-prong strategy employed by DHS also targets the virtual currency platforms and the network of virtual currency exchange makers.”
Homeland Security seeks greater collaboration with law enforcement and private sector partners to reign in the growth and sophistication of cybercrime conducted in virtual currencies.
See their full letter with recommendations along with notes from other agencies below:
One can gather from their statement that they view financial anonymity itself as a cybercrime. Bitcoin is considered a disruptive technology to the current banking system for many reasons, privacy chief among them. The ability to store accrued labor (wealth) privately, out of the reach of government or bankers, is now being treated as money laundering.
As politicians around the world raid private bank accounts and pension funds to pay their debts to bankers, Bitcoin provides cover for citizens. As central banks race to devalue their fiat currencies — hurting savers and consumers — Bitcoin offers refuge. As commercial banks continue to raise fees and reduce services, Bitcoin makes them look foolish. As Wall Street continues to fudge numbers to confuse investors, Bitcoin provides transparency with an absolute supply and open transaction log.
Bitcoin solves many problems of the current financial system. That is why its popularity is skyrocketing, not because people can buy weed online with it.
But DHS is right, Bitcoin is an emerging threat — a threat to the establishment’s theft of the public — which they clearly aim to preserve.