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Even criminals don't trust Bitcoin

November 21, 2013

In a hearing this week, the U.S. Senate offered to help out federal agencies with new regulations addressing the use and exchange of virtual currencies such as Bitcoin (never mind that the senator running the hearing admitted that he didn't understand how it worked). But ... no takers.

According to a Businessweek report, the general feeling among law enforcement officials present at the hearing was that they already have the regulatory tools they need to fight the kinds of crime associated (rightly or wrongly) with digital currency — money-laundering, tax evasion, and the occasional need to engage a hitman.

Moreover, they said, Bitcoin was in no way a significant payments player among Eastern Europe's organized crime gangs, operators of really bigtime money laundering outfits.

When it comes to digital currency, they have the same reservations as the next guy about hacking theft (they should know) and sudden, unexpected changes in valuation. Speculation has increased the Bitcoin price 46-fold since January, when the price was $13.

As Jennifer Shasky Calvery, director of the U.S. Treasury Department Financial Crimes Enforcement Network, said during the hearing, "Cash is still probably the best medium for laundering money." 

Read more about regulatory issues.