Last updated on February 27th, 2014 at 05:19 pm
Bitcoin is a controversial matter, that is not exactly news. But the issue becomes even worthier of analysis when a personality like the United States senator Joe Manchin says cryptocurrency should be banned for good.
In a letter addressed to the Treasury, Federal Reserve and multiple financial regulatory agencies, the Democrat publicly admitted he considers Bitcoin “disruptive” to the country’s economy, highlighting the cryptocurrency’s potential when used by criminals.
The missive was made public after the revelation of the latest developments regarding the Mt. Gox case: the FBI and US Attorney are investigating whether the Bitcoin exchange is guilty of criminal violations, as the Japanese authorities are now seriously looking into the matter as well.
The letter requests a ban on Bitcoin and states that the digital coin “is unregulated and unstable”, likely to have “a negative effect” on America’s economy in case it remains unregulated.
I write today to express my concerns about Bitcoin. This virtual currency is currently unregulated and has allowed users to participate in illicit activity, while also being highly unstable and disruptive to our economy. For the reasons outlined below, I urge regulators to take appropriate action to limit the abilities of this highly unstable currency.
(…) The very features that make Bitcoin attractive to some also attract criminals who are able to disguise their actions from law enforcement. Due to Bitcoin’s anonymity, the virtual market has been extremely susceptible to hackers and scam artists stealing millions from Bitcoins users. Anonymity combined with Bitcoin’s ability to finalize transactions quickly, makes it very difficult, if not impossible, to reverse fraudulent transactions.
Bitcoin has also become a haven for individuals to buy black market items. Individuals are able to anonymously purchase items such as drugs and weapons illegally. I have already written to regulators once on the now-closed Silkroad, which operated for years in supplying drugs and other black market items to criminals, thanks in large part to the creation of Bitcoin.
However, Manchin’s words had little effect so far in the cryptocurrency community. The market is recovering and handing out positive signs to all the Bitcoiners around the world. And then we also have Ron Paul, whose words usually appease the collective spirit.
In this case, when it comes to digital money, the senator and the former Republican congressman from Texas are definitely on opposite sides of the table. Paul is currently known as a major supporter of the Bitcoin cause. A couple of days ago he said he believes “if a digital currency was legitimate, the government should never interfere and close it down“.
The comment was also made in the aftermath of Mt. Gox’s debacle. Nevertheless, according to the former congressman, quoted by The Hill, there’s no need to regulate Bitcoin because the market will survive anyway. “I think the market is much tougher”, he guaranteed.