The Nature of the Form: Legal and Regulatory Issues Surrounding the Bitcoin Digital Currency System – viewcontent.cgi
Trending February 17, 2014 Comments Off on The Nature of the Form: Legal and Regulatory Issues Surrounding the Bitcoin Digital Currency System – viewcontent.cgi 19Prohibition is not the answer. Owing to Bitcoin’s distributed nature, even if prohibition eventually proves to be a logical choice, it would likely never come close to addressing the problems for which it was enacted. More importantly though, hand-to-hand cash transactions are used just as frequently for criminal purposes, yet the efforts of lawmakers and law enforcement agencies are directed at the criminals themselves and not at the medium through which they transact.
Indeed, Bitcoin’s blockchain provides a record of all transactions that take place on the network. Through the use of“sophisticated network analysis techniques,” law enforcement agencies may be able to leverage this public ledger to ferret out any small-scale criminal actors using the digital currency for nefarious purposes.In terms of large-scale criminal activities, government efforts should be directed at the exchanges that operate in the Bitcoin economy. The recent revision to the regulatory definitions and requirements of money service businesses seems to eliminate any doubt as to whether Bitcoin exchanges fall within the scope of these provisions. In fact, the requirements were designed to combat the same large-scale criminal activities that have been identified as a major concern in the Bitcoin economy. While ensuring that these exchanges comply with the existing statutory scheme may only achieve the desired result on a domestic level, until the direction of the Bitcoin economy is more fully realized, it represents the best solution going forward.
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