comScore
Tech Saturday, March 23rd 2013 at 11:00 am

Government Applies New Money Laundering Rules to Bitcoin, Defeating the Purpose of Bitcoin

By ( ) Comments

Using Bitcoin to launder all the cash from your illegal dealings just got a little harder. The United States Treasury Department just enacted new rules to regulate Bitcoin and other virtual currencies, making it subject to the same level of scrutiny as other forms of currency. That’s bad news for anyone looking to launder money using Bitcoin, but it could be good news for proponents of virtual currency for legitimate purposes.

The new rules will see Bitcoin and its ilk regulated in a similar fashion to how the government deals with traditional money-order services like Western Union. Little is expected to change for individuals trading in Bitcoins, but businesses will be required to keep more detailed records of the transactions. There will also now be a rule that any transactions over $10,000 must be reported.

The measures are aimed at stopping illegal activity like money laundering done with virtual currency, but as Bitcoin developer Jeff Garzik points out, “I think it’s inevitable that just like you have U.S. dollars used by thieves and criminals, it’s sadly inevitable you will have criminals use a virtual currency. We want to work with authorities.”

Just because some criminals use Bitcoin, does not mean it’s a criminal empire. Although the new rules should make it harder to use things like Bitcoin for illicit activity, having the Treasury department regulating it should make supporters of virtual currency happy to see that it’s getting a level legitimacy it didn’t have before.

From what I understand, what the real supporters of Bitcoin want more than anything is for the currency to be taken seriously.

(via The Wall Street Journal, image via zcopley)

Relevant to your interests

Filed Under | • • • •
  • We Outnumber You

    Very skeptical that one of the most corrupt, dishonest Governments on the planet think THEY have the moral authority or any right to regulate ANYTHING when they harbor war criminals like Bush and Cheney, allow Monsanto and big Pharmaceutical companies to buy the right to poison their population and openly fund attacks on human and civil rights. The Federal Reserve regularly RAPES the American Economy, but these are the people who are going to ‘regulate’ a democratic currency and therefore one of the biggest threats to their corrupt practices. Conflict of interest?

  • Jean-Claude Morin

    The tile of the article implies that the “purpose” of Bitcoin is to do Money Laundering… and it’s not the case. The law make it harder to convert USD to Bitcoin and versa, but once you have Bitcoin you are still free to do the transactions you want.

  • The Dark Lord

    So launder it in amounts under $10,000. Shouldn’t be too hard.

  • http://www.facebook.com/olhovsky Kris Olhovsky

    You don’t know what the purpose of Bitcoin is.

  • Michael Hardy

    I’m inclined to agree with (most of) the article, but not with the headline.

  • Cronus de Gaia

    Our government is much more dangerous than all the terrorists, money launderers, dope peddlers, porn traffickers, and gun runners combined. I suggest we shun the exchanges that allow themselves to be “regulated” and support the ones that locate in hospitable offshore jurisdictions or who go underground like the Silk Road.

    So-called “currency legitimacy” means government control. It’s the central banks and their minions that are truly illegitimate. Let’s keep the BitCoin economy free!

  • http://geekosystem.com/ Glen Tickle

    The headline is in reference to the idea that most people seem think Bitcoin is primarily used for criminal purposes, which I point out is untrue in the article itself.

  • Smoovious

    The purpose of bitcoin is to have a currency free of government control…

    I don’t see how this decision of theirs has anything to do with bitcoin, as it still only covers the side of the transaction that involves their money.

    Nothing new here, just a propaganda attempt it seems to me.

  • Bruce Bates

    Indeed only now it will be taxed, you cant gamble with it (as that would be illegal to gamble online with a federally recognized currency… its no longer like gambling peanuts), and your transactions will be monitored.

    The idea of buying and spending tax free with bitcoins, just flew out the window.

  • Bruce Bates

    No it does not….. it means companies must report bitcoin earnings and be taxed on it, it means they will have to report sales of over $10,000 just like with cash, it means that you can’t gamble with bitcoins as a US citizen as bitcoins are now recognized as tender so its not like gambling peanuts anymore, this changes many things – I think the biggest being the taxes.

  • http://twitter.com/eddiecarrigan Eddie Carrigan

    That was well said and to the point,nice to see some people are awake !