Notice: register_sidebar was called incorrectly. No id was set in the arguments array for the "Sidebar 1" sidebar. Defaulting to "sidebar-1". Manually set the id to "sidebar-1" to silence this notice and keep existing sidebar content. Please see Debugging in WordPress for more information. (This message was added in version 4.2.0.) in /home/erzcpwspgm6g/public_html/wp-includes/functions.php on line 5664
CRF Blog » Blog Archive » Bitcoin: If You Can’t Ban It, Should You Regulate It?

CRF Blog

Bitcoin: If You Can’t Ban It, Should You Regulate It?

by Bill Hayes

In Bitcoin: If You Can’t Ban It, Should You Regulate It? for Justia, law professor Anita Ramasastry examines the merits of legalizing the digital currency.

Bitcoin, a so-called virtual peer-to-peer currency, is in the headlines around the globe. Russia is attempting to ban its use. China claims it has banned Bitcoin. Germany has declared that Bitcoin is not legal tender. Even Apple has removed the Bitcoin wallet app Blockchain from its App Store and done so without warning. Blockchain was the last remaining Bitcoin wallet available for iOS devices, causing some disgruntled iPhone users to smash their iPhones on video.

In the U.S., the federal and state governments have not tried to ban Bitcoin. The U.S. Treasury Department has, however, informed parties that issue or exchange Bitcoins that they are subject to federal laws dealing with money laundering, and may need to register as money transmitters and comply with reporting requirements regarding suspicious financial transactions.

Why is there so much fuss about Bitcoin? For two reasons. The first reason is that it is a substitute for official government currency. People are willing to trade in their government-issued money to obtain Bitcoins — hence posing some challenges to the global banking system. The second reason is perhaps the major one: Bitcoins, because they are not widely regulated or under government scrutiny, are used for illegal purposes. In January 2014, U.S. government agents arrested Charlie Shrem, the CEO of Bitcoin exchange BitInstant, charging him with laundering money for customers of the online drug bazaar Silk Road, which has been shut down. Law enforcement is trying to stop the use of Bitcoin on such sites — where people can buy drugs, guns, and illegal pornography.

In this column, I will look at recent attempts to extend legal recognition to Bitcoin, and explain why I believe this is a good thing. [more]