FBI Explores The Implications Of Bitcoin

from the why-that's-so-2011 dept

Remember Bitcoin? The online cryptographic currency that got a lot of attention last year, but quickly faded? There was some political grandstanding against it, like when Senator Chuck Schumer declared that Bitcoin was a form of money laundering. And, now, the FBI is trying to understand Bitcoin, sending around a document warning that criminals might (*gasp*) use Bitcoin.

The report is pretty even-handed, actually. It notes that there's a reasonable likelihood that "malicious actors will exploit Bitcoin to launder money." However, it at least admits, noting that this is no different than cash, that users of Bitcoin "value the currency for many of the same reasons people trust Federal Reserve notes: they believe they can exchange the currency for goods, services or a national currency at a later date." It does highlight some "unique features" that make Bitcoin especially suited for illegal activity -- but most of those just seem to be examples of Bitcoin being used for questionable activity, rather than specific features of Bitcoin.

It also suggests that the FBI isn't that worried about the fact that some uses of Bitcoin can be anonymous -- noting (correctly) that it's not as anonymous as some people think, and good old fashioned detective work can often uncover the people:
Although Bitcoin does not have a centralized authority, the FBI assesses with medium confidence that law enforcement can discover more information about, and in some cases identify, malicious actors, if the actors convert their bitcoins into a fiat currency. Thirdparty bitcoin services may require customers to submit valid identification or bank information to complete transactions. Furthermore, any third-party service that qualifies as a money transmitter, and therefore a MSB, must register with the FinCEN and implement an anti-money laundering program.
All in all, I actually expected more hyperbole and fear mongering, but seeing as this was meant for internal use, rather than for political gain, it seems like the paper was pretty even-handed. Of course, none of that matters at all if no one is using Bitcoin any more...


Reader Comments (rss)

(Flattened / Threaded)

  •  
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    bt, May 15th, 2012 @ 12:24pm

    Since when has...

    Since when has the FBI used the phrase "fiat currency?" Never.
    Fake report.

     

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      identicon
      Anonymous Coward, May 15th, 2012 @ 12:50pm

      uh... rrrrright!

      Inspector Clouseau solves another one.

       

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      identicon
      Anonymous Coward, May 15th, 2012 @ 1:23pm

      Re: Since when has...

      "Vat is dis 'baby'? De Fuehrer has never said 'baby'..."

       

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        identicon
        bt, May 15th, 2012 @ 2:06pm

        Re: Re: Since when has...

        Instead of adding snark could you show an example of the FBI using that phrase in any statements or documents? In my years of casual reading I've never come across it. While on bitcointalk forums its rather popular.

         

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          Some Other Guy (profile), May 15th, 2012 @ 2:21pm

          Re: Re: Re: Since when has...

          What do your years of casual reading of FBI documents say about the odds that agents of the FBI may pick up knowledge from those they investigate, perhaps certain turns of phrase or specific technical terms in use by them?

           

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            bt, May 15th, 2012 @ 2:29pm

            Re: Re: Re: Re: Since when has...

            That idea depends on agents tasked with reporting about currency not knowing about "fiat currency" and never stating it previously. Then picking it up from bitcoin user's and wedging it into a report. Does a street cop put street slang into reports? No they use the language typically used previously.

            If you want to know the technical terms used you should take a few years worth of reports on counterfeiting and money laundering and give them a read. Spoiler: fiat currency does not make an appearance.

             

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              Anonymous Coward, May 15th, 2012 @ 10:38pm

              Re: Re: Re: Re: Re: Since when has...

              Yeah right, fiat is 'slang' from bitcoin users:

              http://en.wikipedia.org/wiki/Fiat_money

              Maybe the agent who wrote the report studied economics

               

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                bt, May 17th, 2012 @ 7:48pm

                Re: Re: Re: Re: Re: Re: Since when has...

                I never said it was slang only used by bitcoin users.

                I'm also not seeing anyone showing any instance of the FBI previously using it in reports. Considering the amount of reports done on currency it should be easy for those scoffing at the idea of the FBI never using it.

                The writing looks, tastes, and smells like the product of bitcoin users. The tone set and the language used, when the language is used indicate rubbish to me. Again I would like to an example of the FBI using "fiat currency" like that "report" did, as I never have come across such a use.

                 

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            Joe, May 19th, 2012 @ 8:36am

            Re: Re: Re: Re: Since when has...

            Yep, language evolves. In 100 years time, it's probable that few people will even use the term fiat to describe printed money unless some big university immortalizes the word.

             

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        Anonymous Coward, May 15th, 2012 @ 5:30pm

        Re: Re: Since when has...

        Baby, baby, baby, oh?

         

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    quawonk, May 15th, 2012 @ 12:45pm

    They don't control it, therefore it's bad.

     

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    quawonk, May 15th, 2012 @ 12:46pm

    They don't control it, therefore it's bad.

     

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    Anonymous Coward, May 15th, 2012 @ 1:17pm

    Of course, none of that matters at all if no one is using Bitcoin any more...


    Therein is the key. If it were being widely adopted, there would be hyperbole, embellishment, overstatement, fear mongering, terrorist plots, pot dealers, dead baby seals, electric cars, fully automatic weapons, and probably mention of that guy who put the flaming bag of poop on your doorstep that one time for good measure.

     

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    weneedhelp (profile), May 15th, 2012 @ 1:37pm

    the FBI

    "the FBI is trying to understand Bitcoin, sending around a document warning that criminals might (*gasp*) use Bitcoin. "


    Takes one to know one.

     

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    Zos (profile), May 15th, 2012 @ 1:38pm

    it's still in use, though it's definitely taken some hits.

     

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      Zos (profile), May 15th, 2012 @ 1:39pm

      Re:

      http://www.bitcoindir.com/ (directory of sites that accept bitcoins, no idea how inclusive)

       

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      RonKaminsky (profile), May 15th, 2012 @ 5:31pm

      $276K of trading per day on Mt. Gox alone

      Yes, the report itself showcases information about the trading volume on Mt. Gox currently being around $276K per day.

      In my opinion, however, just trading shouldn't really be considered "use". The report has no firm information on the volume of bitcoins actually used to buy real goods or services.

       

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    iamtheky (profile), May 15th, 2012 @ 1:46pm

    just antagonizing

    bitcoin defenders using the FBI investigation as a defense for its legitimacy in 3..2..

     

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      The Moondoggie, May 15th, 2012 @ 10:17pm

      Re: just antagonizing

      We all know that bitcoin has been used by the netizens' criminal members in the Deep Web and .onion sites to spread/sell CP, drugs, smuggled goods, etc. way back. Also used in illegal betting, payment for mercenary services, etc.

      Fun times...

       

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    Mangix, May 15th, 2012 @ 1:52pm

    Not Quite Correct

    "for many of the same reasons people trust Federal Reserve notes: they believe they can exchange the currency for goods, services or a national currency at a later date."

    It's not that people have actual faith in the Federal Reserve. It's that they have no choice. Legal tender laws essentially eliminate any other form of currency as a legal means of exchange. See the Liberty Dollar case a while back as an example.

     

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      Anonymous Coward, May 15th, 2012 @ 2:30pm

      Re: Not Quite Correct

      Legal tender is not what it used to be: try paying a 2 euro coffee with a 500 euro note in a bar.

       

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      JimB, May 15th, 2012 @ 3:33pm

      Re: Not Quite Correct

      I'm perfectly willing to accept payment in gold, silver, platinum, or diamonds in lieu of Federal Reserve notes. I suspect I could arrange a transaction for almost anything I need in the future using the same medium of exchange. While not strictly 'legal tender' as a means of payment it would be widely accepted I suspect.

       

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    fogbugzd (profile), May 15th, 2012 @ 2:23pm

    The most common item used for money laundering as well as smuggling is the US $100 bill. Perhaps we need to investigate the US treasury department along with bitcoin.

     

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    Anonymous Coward, May 15th, 2012 @ 4:56pm

    Wasn't Falkvinge one of the early BitCoin scammers? Figures. I hope the FBI starts with him when they start rounding up the grifters who duped everyone.

     

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    Anonymous Coward, May 15th, 2012 @ 7:08pm

    Bitcoin rules.

     

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    Anonymous Coward, May 16th, 2012 @ 4:11am

    The authors of bitcoin have said that bitcoins aren't really anonymous.

     

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    identicon
    Anonymous Coward, May 16th, 2012 @ 6:28am

    Nobody uses bitcoin anymore? Anymore? It's hardly 3 years old. People are just beginning to use it.

     

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  •  
    identicon
    Bitcoin Value, Feb 22nd, 2014 @ 9:59pm

    Bitcoin Value - What is Bitcoin Mining and Exchange

    http://www.youtube.com/watch?v=2c98kK6okFs Bitcoin Value

    BITCOIN is about to take over the world!

    The price of Bitcoin is increasing at an exponential rate and it's going to continue at least until it is worth between $20,000 and $100,000 / 1 BTC.

     

    reply to this | link to this | view in chronology ]


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