A lawyers perspective on bitcoin.

[Herodes]

http://www.duhaimelaw.com/2013/04/21/bitcoin-virtual-currencies-and-the-legal-risks-they-pose-to-consumers-and-the-particular-risks-they-pose-in-combatting-money-laundering-and-terrorist-financing-initiatives/

[TheButterZone]

Reductio ad Terroristum

[superduh]

that lady is pulling strings.
first shes' talking about violating coinage laws then she's talking about violating securities laws
is this the first "currency/security" hybrid?

would not use her in whatever her specialty is.

[davidspitzer]

It seemed a little light on understanding and heavy on Wikipedia research

[freedomno1]

Legal is being handled already so is merchant side so the issue is starting to fade the starting point of this article is already becoming outdated due to recent developments by taxing authorities in the US and Canada
Hard to believe two weeks can change the feed

[sunnankar]

It seemed a little light on understanding and heavy on Wikipedia research

I agree. Mostly vapor-analysis and nothing of much substance.

[RenegadeMind]

Terrorist Financing & Money Laundering Risks

It is not disputed that cybercriminals use electronic payment systems and virtual currencies as a way to launder money and fund terrorism.

Bitcoin, however, poses a unique risk because it is the only decentralized P2P virtual currency that opens up a new channel for money laundering and terrorist financing with no easy way to detect suspicious activity, identify users and traders, obtain transaction records and trace money flows from and to criminals and terrorists.

Without being able to obtain transaction records and follow financial transactions, it is virtually impossible for law enforcement worldwide to prevent terrorist financing from occurring on the bitcoin network, or to monitor it to prevent terrorists from purchasing the tools, equipment and supplies they need to carry out attacks.

Bitcoin is an underground currency and it will inevitably be used by factions of extremists and money launderers to move money globally without detection.

And that’s the fear.

Much as we may not like some of the invasive components of modern anti-money laundering and counter-terrorist financing legislation, and the attendant monitoring and reporting to government agencies, it is extremely effective in stopping terrorists and protecting society.

The very thing that makes bitcoin attractive to some users – anonymity – makes it extremely dangerous for the rest of us because it can facilitate terrorist attacks that threaten our way of life and seek to destroy the fundamental values to which we ascribe that form the basis of our constitutional democracy.

ARE YOU FUCKING SERIOUS?

Ahem... The "terrorists" and "criminals" already have very well established ways to launder money... It's called HSBC!

The advantage for "terrorists" and "criminals" is that BTC has lower transaction fees!

I'm sure that I'm not the only one that's sick of this kind of bullshit.

[freedomno1]

Terrorist Financing & Money Laundering Risks

It is not disputed that cybercriminals use electronic payment systems and virtual currencies as a way to launder money and fund terrorism.

Bitcoin, however, poses a unique risk because it is the only decentralized P2P virtual currency that opens up a new channel for money laundering and terrorist financing with no easy way to detect suspicious activity, identify users and traders, obtain transaction records and trace money flows from and to criminals and terrorists.

Without being able to obtain transaction records and follow financial transactions, it is virtually impossible for law enforcement worldwide to prevent terrorist financing from occurring on the bitcoin network, or to monitor it to prevent terrorists from purchasing the tools, equipment and supplies they need to carry out attacks.

Bitcoin is an underground currency and it will inevitably be used by factions of extremists and money launderers to move money globally without detection.

And that’s the fear.

Much as we may not like some of the invasive components of modern anti-money laundering and counter-terrorist financing legislation, and the attendant monitoring and reporting to government agencies, it is extremely effective in stopping terrorists and protecting society.

The very thing that makes bitcoin attractive to some users – anonymity – makes it extremely dangerous for the rest of us because it can facilitate terrorist attacks that threaten our way of life and seek to destroy the fundamental values to which we ascribe that form the basis of our constitutional democracy.

ARE YOU FUCKING SERIOUS?

Ahem... The "terrorists" and "criminals" already have very well established ways to launder money... It's called HSBC!

The advantage for "terrorists" and "criminals" is that BTC has lower transaction fees!

I'm sure that I'm not the only one that's sick of this kind of bullshit.

Thought it was Instagram MoneyBank and Western Union
Also if the minchip in canada comes out that lol

[Chuck Finley]

I'm sure that I'm not the only one that's sick of this kind of bullshit.

As long as sites like the silk road represent a significant amount of crypto currency business expect BTC, LTC, etc. to be associated with "criminals" for the averate person who knows little-to-nothing about crypto currency.

[steamboat]

I'm sure that I'm not the only one that's sick of this kind of bullshit.

As long as sites like the silk road terrorists and criminals represent a significant amount of crypto currency business expect BTC, LTC, etc. whatever the central bank propaganda machine decides to target to be associated with "criminals", for the average person knows little-to-nothing about crypto currency how the majority of those organizations fund themselves.

FTFY

[Bitcoinpro]

propaganda at best

[Gabi]

FUD

[mycketbra]

>Makes money off gambling regulation
>Complains about Bitcoin

top lel

[BitCoinUser123]

Terrorist Financing & Money Laundering Risks

<SNIP>

Much as we may not like some of the invasive components of modern anti-money laundering and counter-terrorist financing legislation, and the attendant monitoring and reporting to government agencies, it is extremely effective in stopping terrorists and protecting society.

The very thing that makes bitcoin attractive to some users – anonymity – makes it extremely dangerous for the rest of us because it can facilitate terrorist attacks that threaten our way of life and seek to destroy the fundamental values to which we ascribe that form the basis of our constitutional democracy.

ARE YOU FUCKING SERIOUS?

Ahem... The "terrorists" and "criminals" already have very well established ways to launder money... It's called HSBC!

The advantage for "terrorists" and "criminals" is that BTC has lower transaction fees!

I'm sure that I'm not the only one that's sick of this kind of bullshit.

Arguably, there is also the Hawala system, which is kind of a BTC / Ripple hybrid operating on the basis of debts owed and transferred based on friend / clan / web of trust loyalties wherein normally no money actually crosses any borders in a given transaction.  It is kind of a thorn in the side of law enforcement on these kinds of issues.  It's also used where the bank / state / financial structure is weak or nonexistent, which is one of the reasons it still exists.  You've got your hawala brokers (hawaladars) who are the bankers of the system.  You go to your guy in Tennessee, who you have known for a long time, and tell him "I need to transfer $10,000 to my friend Jim in the Philippines.  You will know him because he will be wearing a red hat and he will use the word 'warfarin' as a password." I then hand the guy $10k in US cash.  This guy knows a guy who knows a guy who knows a guy who knows a guy -the guy I gave cash to makes the first call, promising to pay his guy who promises to pay his guy who promises to pay his guy.  Eventually, the guy at the end of the chain hands $10,000USD equivalent in local currency to Jim.  The following day, the same thing may happen in reverse when one of Jim's neighbours wants to send money to his aged granny who happens to also be in Tennessee.  Every so often the ledgers are settled up, but usually for relatively small amounts.  The actual cash transfers aren't directly linked to individual transactions.

Wikipedia Article on Hawala

It's kind of a thorn in the side of AML enforcement because of the major difficulty in actually tracking it, enforcing it or proving anything even when some evidence of wrongdoing is uncovered.  Additionally, it's not a practice that can readily be outlawed without impacting other more legitimate forms of trade.  This system is MOSTLY used by workers or family members sending remittances home, but it has been known to be used by the "terrorists" and "criminals" vaguely referred to above.  And yet oddly, nobody outside of legal or other fairly technical areas has even heard about it, partially because of how challenging it is to actually address.  Check out the Wikipedia link for more info if you're interested - my explanation above was oversimplified and hokey.

My point is basically that there are already such systems in place which actually offer *LESS* traceability because the records aren't embedded in the blockchain for the entire (immediately foreseeable) future.  Pseudonymity is not exactly equal to anonymity - BTC offers absolute trackability on an address-by-address basis, you just have a great deal of difficulty in satisfactorily linking a given address with a given real-world identity provided that even moderate precautions have been taken place.  But in the event that such measures haven't been taken or someone gains some kind of satisfactory proof that you held a particular address at a particular time that a particular transaction took place, the blockchain is an indefinite source of legal liability.  Not saying that's a reasonable probable outcome - it isn't.  It's just worth pointing out what's actually happening as opposed to the shorthand that is often used.  BTC offers the possibility of practical / functional anonymity but it isn't strictly speaking untraceable, and such a degree of traceability is in some ways the wet dream of law enforcement.  There are just additional factors that render it largely useless in in practice for evidence purposes.

[davidgdg]

I didn't see much law in that piece.

[BitCoinUser123]

I didn't see much law in that piece.

Nope, nor much substance at all.  FUD mixed with Op-Ed.

[bitcoin_bob]

There is no consumer protection for users and that means they are exposed when buying and selling bitcoin and when using them for goods and services. Anyone along the bitcoin chain use can rip you off without repercussion or redress;
It may be considered illegal to acquire, sell, possess or use  bitcoin in some countries under their laws that govern the coining of currency and its usage as a form of legal tender;
There are no dispute resolution mechanisms governing it in the event of a dispute associated with its acquisition, disposition or use;
It operates as part of an underground economy with all of the attendant problems associated with underground economies, the constitutive elements of which typically include tax-evasion through unreported transactions; tax-evasion through unreported income; and under-utilization of the labour force;
The trade of units or shares of bitcoin may, according to securities lawyers, be a violation of securities laws of some jurisdictions which may expose sellers of bitcoin to securities laws violations;
Deposits (holdings) of bitcoin are not protected by bank deposit insurance and as a result, there is nothing to protect minimum amounts of bitcoin holdings; and
There are no systems or safeguards required to be in place to make it reasonably safe from theft or hacking.

Sounds like she is talking about transactions in CASH.....