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Fear, Terror To Be Used By Senate To Regulate Virtual Currencies Out Of Existence

August 14, 2013 by  

Fear, Terror To Be Used By Senate To Regulate Virtual Currencies Out Of Existence

The Senate Homeland Security and Government Affairs Committee set the wheels in motion this week for a comprehensive review of how it plans to clamp down on virtual currencies like Bitcoin.

In a letter to seven Federal agencies Monday, the panel requested feedback and policy proposals for virtual currency regulation.

The letter, signed by the committee’s Chairman Senator Tom Carper (D-Del.) and ranking member Senator Tom Coburn (R-Okla.), expresses lawmaker concerns that virtual currency “can be sent nearly anonymously, leaving little or no trail for regulators or enforcement agencies.”

“Their near anonymous and decentralized nature has also attracted criminals who value few things more than being allowed to operate in the shadows,” the letter continues.

Entities that received the letter include:  the Department of Justice, the Federal Reserve, the Treasury, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Since Bitcoin began receiving widespread attention in the media as a viable alternative to cash, Federal agencies have kept a close watch on the startup and on firms with which it does business.

Liberty Reserve, another virtual currency system based in Costa Rica, was shut down in May when the Justice Department charged the company with money laundering and used the Patriot Act to lock it out of the American financial system.

The government built a case against Liberty Reserve decrying customers’ ability to anonymously convert money into virtual currency and transfer it from account to account with a 1 percent transaction fee. Justice and the Treasury officials said that allowed criminals to hide the sources of their money.

“The global enforcement action we announce today is an important step towards reining in the ‘Wild West’ of illicit Internet banking,” U.S. Attorney Preet Bharara said in a statement at the time. “As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”

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Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

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