Bitcoin laws are coming

[silicon_toad2000]

http://www.theregister.co.uk/2013/08/14/us_senate_bitcoin_probe/

is there a jurisdiction issue here?

The heat is on for Bitcoin and other virtual currencies in the US, with lawmakers at the highest levels of government now actively investigating how to regulate the upstart digital monies.

On Tuesday, the Senate Committee on Homeland Security and Governmental Affairs sent letters to a number of prominent federal regulatory bodies, asking them what policies or procedures they had in place to prevent criminals from using virtual currencies for nefarious ends.

The Washington Post reports that identical letters were sent to the Commodities Futures Trading Commission, the Department of Homeland Security, the Department of Justice, the Department of Treasury, the Federal Reserve, the Office of Management and Budget, and the Securities and Exchange Commission.

[GhostShip]

I believe they are more worried that folks may start using the "upstart" currency in preference to their national one and that removes much of the control they have over their citizens finances, thus this is something they feel they need to stamp on rapidly.

The arguments regarding the criminal usage of non dollar currencies is pretty spurious as folks can use any number of commodities that are barely regulated such as precious metals or gems, overseas currencies, bearer bonds and other valuables that are pretty much as good as cash, this is really all about control of digitally compatible financial systems and the ability to levy tax's or seize such funds legitimately or otherwise.

I find it hypocritical that they want to dig deeply into such competing financial systems but ask any questions regarding their own flawed federal reserve currency and the doors slam shut on openness and transparency, just when was the last audit ?

[RebelMX]

I don't entirely agree with your skepticism.  If you had $1 million in drug money and wanted to launder it and get it out the country you have few options other than smuggling.  Using digital currency you can smuggle it out without any controls at all.

$1 million in drug money converts to 8,992.81 bitcoins
Someone sends me a gift of bitcoins over the net.
I exchange them into sterling at a value of £641,996.71 in clean laundered money.  No government can prevent it as there are no controls and there is no need to encounter drugs sniffing dogs, xray machine or even pay a person to travel. Easy, cheap and the perfect way to avoid the "machine".

[GhostShip]

I can see your new to international money laundering schemes 

A professional sets up a "front" company for an overseas shell company that's owned again by another shell company in another location and they can move as much money as they like around the globe with little traceability as no one actually knows who owns or owes whom what due to privacy laws and the use of "proxies" to act as trustees for the real owner.

If you don't feel this is a real scenario please read "private eye" magazine, they regularly document such activities done in the main for tax avoidance reasons but also regularly used to launder "dirty" money.
Its a fact that the dollar and all other currencies are used to fund crime and criminals do give each other credit from time to time , alternatively they more often use well known banks that have gotten lazy in doing due diligence on their customers, you may recall the BCCI scandal and the many times Barclays have been investigated and over the years nearly all banks have been fined for being lax when it came to taking the easy money gained by turning a blind eye to dubious revenue streams, call me sceptical for sure but rest assured I don't go around with my eyes closed to white collar crime as the US govt seems to, have they located the missing trillions yet they announced the day before september the 11th ?