RiskFinancial CrimeBitcoin Lobbyists Discuss Digital Currency with US Authorities

Bitcoin Lobbyists Discuss Digital Currency with US Authorities

A lobby group representing
digital currency the Bitcoin (BTC)
has met with US authorities to discuss their concerns over its potential for money laundering abuses and use in funding illegal activities such as drug purchases.

Representatives of the BTC’s largest lobby group met federal law enforcement and financial agencies on Monday as the US authorities increased their scrutiny of the controversial digital currency.

Patrick Murck, general counsel for the Bitcoin Foundation, said that the group was meeting with bodies that included the Federal Reserve, the Federal Bureau of Investigation (FBI), the Treasury Department, tax officials and members of the secret service.

In an email, Murck described  the agenda of the Washington meeting as to “help regulators, policymakers and law enforcement officials better understand the Bitcoin protocol and distributed finance so they can make better decisions and develop new methodologies for identifying and interceding illicit activity.

“Bitcoin and distributed finance is here to stay and our preferred path forward is a co-operative one, where we all can help ease each other’s transition into an inclusive and distributed global financial system.”

Concerns over possible abuses of the BTC stem from the fact that unlike traditional currencies, the BTC is not backed by a central government, but instead created by a computer programme and can be traded or used to buy goods and services. The exchange rate for a BTC has proved highly volatile and the online currency circulates without using intermediaries such as banks.

Murck said he hoped the Federal meetings would clear up misunderstandings. “We view this as the beginning of a conversation about the appropriate role of government and law enforcement in this emerging space. Our hope is that this is the beginning of an open and transparent dialog between good-faith stakeholders to find common ground and develop public-private partnerships.

“It is refreshing to see US regulators at the federal level take a responsible approach to working with the industry to understand these issues.

“Contrast that with what we are seeing at the state level: regulators seem more interested in rushing to conclusions and tripping over themselves to be first movers, without regard to the unintended consequences for the industry and US policy at the national level.”

The US Senate Homeland Security and Government Affairs Committee recently wrote to the Departments of Treasury, Homeland Security and other government agencies requesting details on how they oversee the use of virtual currencies, part of an investigation begun several months ago.

The letters followed 22 subpoenas issued on 12 August by the New York Department of Financial Services to BTC businesses asking questions about their anti-money laundering (AML) and consumer protection policies.

Related Articles

Why working in silos is a killer when battling financial crimes

Cyber Security & Fraud Why working in silos is a killer when battling financial crimes

4m Andrew Simpson
PSD2: dull name, but seismic effect

Clearing & Settlement PSD2: dull name, but seismic effect

6m Alex Kwiatkowski
Staying one step ahead: PSD2 and the future of fraud

Financial Crime Staying one step ahead: PSD2 and the future of fraud

6m Seth Ruden
8 predictions for treasury in 2018

Financial Crime 8 predictions for treasury in 2018

7m Bob Stark
FDIC sues 9 European banks over Libor

Banking FDIC sues 9 European banks over Libor

11m Victoria Beckett
Appreciating supply chain cyber risk

Cyber Security & Fraud Appreciating supply chain cyber risk

11m Peregrine Storrs-Fox
The death of the password: biometric banking

Automation The death of the password: biometric banking

11m Paul Sheldon Foote
The insecurity of fraud victims in the fight against cyber-assailants

Bank Relationships The insecurity of fraud victims in the fight against cyber-assailants

11m Keiron Dalton