Last updated on July 21st, 2013 at 04:30 pm
The Bitcoin Foundation was alarmed after FinCEN announced the document “Imposition of Special Measure Against Liberty Reserve S.A. as a Financial Institution of Primary Money Laundering Concern” and didn’t hide it. The problem is that this new regulation proposed by the Financial Crimes Enforcement Network (FinCEN) suggests all virtual currency transactions are inherently suspect. So, the institution decided to write a public letter asking for a clarification.
The foundation believes that the FinCEN’s proposed rule can and will probably be misinterpreted, creating the idea of cryptocurrency as a dubious matter that has a unique goal: laundering money.
FinCEN states that “Liberty Reserve’s system is structured so as to facilitate money laundering and other criminal activity”, citing the anonymity of the system and the irreversibility of the transactions and also requiring the financial institutions to impose “special measures” against the platform under Section 311 of the Bank Secrecy Act. The goal is to finally shut down Liberty Reserve transactions around the world.
However, according to the letter issued by the Bitcoin Foundation, the organization “does not take issue with the imposition of special measures against Liberty Reserve. Rather, the Bitcoin Foundation is filing these comments to urge FinCEN to clarify statements made in the Proposed Rule and the underlying Notice of Findings that could be misinterpreted to suggest that virtual currency transactions in general are inherently suspect”.
“The Bitcoin Foundation is concerned about the broad use of the term ‘anonymous’ and about FinCEN’s general characterization that all ‘anonymity’ is designed to facilitate money laundering and other criminal activity”, adds the letter.
Patrick Murck, from the Bitcoin Foundation, says that while the institution has “no intention of defending Liberty Reserve”, they are “compelled to point out the incorrect and unnecessary conclusions FinCEN drew with regard to private and irreversible transactions”. As stated by Murck, “these inaccuracies have created a chilling effect in the banking industry as they deal with compliance issues in the virtual currency industry and the record demanded correction”.
You can read the full letter wrote by the Bitcoin Foundation here.