Congress directs the FBI to report on Bitcoin

FBILogoThe United States House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies 2014 appropriations bill recommends spending amounts for a number of government agencies including the FBI.

In their 2014 appropriations bill, the subcommittee directs the FBI to report on Bitcoin, specifically what the FBI is doing to address the “challenge” that they see from the “ersatz currency“.

Page 45 of the bill

Money laundering. —The Committee understands that Bitcoins and other forms of peer-to-peer digital currency are a potential means for criminal, terrorist or other illegal organizations and individuals to illegally launder and transfer money. News reports indicate that Bitcoins may have been used to help finance the flight and activity of fugitives. The Committee directs the FBI, in consultation with the Department and other Federal partners, to provide a briefing no later 120 days after the enactment of this Act on the nature and scale of the risk posed by such ersatz currency, both in financing illegal enterprises and in undermining financial institutions. The briefing should describe the FBI efforts in the context of a coordinated Federal response to this challenge, and identify staffing and other resources devoted to this effort.

From the wording of the bill, particularly in describing digital currencies as “ersatz” (inferior substitute – merriam-webster.com) we can guess that the members of the United States House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies are not big Bitcoin fans.

LetsTalkBitcoin, which broke the story on Monday, sees this fear from Congress as quite predictable.

The cash-like nature of Cryptocurrencies such as Bitcoin seem to be fundamentally at odds with the identity-based financial systems we’ve used since the advent of the internet.  What the bitcoin-using community sees as the advantages of Bitcoin; trustless and irrevocable transactions divorced of official identity.  In another light this can be seen as enabling money laundering, consumer fraud and terrorism.

“It is natural for established industries and their representatives in the Senate to fear new and disruptive technologies.” explained Andreas M. Antopoulos, Expert on decentralized networks  “As with the early Internet, there are those who only look at the empowering effects on criminals, rather than on the vast majority of people who can benefit enormously. It just takes time for the lawmakers and laws to catch up to the technology and adapt”

 

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