US Treasury Denies It Is Trying To Torpedo Bitcoin

Tyler Durden's picture

Submitted by Simon Black via Sovereign Man blog,

In remarks given late last week to the curiously named United States Institute for Peace, the head of the Treasury’s Financial Crimes Enforcement Network (FinCEN) vociferously denied any attempts at regulating digital currency... specifically Bitcoin.

The speech, entitled “The virtual economy: potential, perplexities and promises”, can be downloaded here for your reading pleasure. But here’s the gist:


- The government views virtual currencies as a “financial service”, and virtual currency exchanges as “financial institutions” that are “as much a part of the financial framework as any other type of financial institution.”


- The government further views that these ‘financial institutions’ have “certain responsibilities.” Namely, to “register with FinCEN” and become an unpaid spy of the US government.


- Resistance is futile. If businesses which provide digital currency services fail to comply, those individuals and companies “are going to be held accountable.” While those who comply “have nothing to fear from Treasury.”

It’s clear that Bitcoin is smack dab on the US government’s radar, despite the digital currency’s tiny market size. But it’s also clear that they don’t understand Bitcoin at all.

They claim, for example, that a digital currency is a ‘financial service’, as if Bitcoin is some sort of mutual fund or home equity line of credit.

Like gold, digital currency is not a financial service. It’s a proxy AGAINST the financial system that takes one’s savings out of fiat currency.

Bitcoin takes things a step further in that it is completely decentralized. There is no Bitcoin issuer that regulates its supply like a central bank, and no tiny elite that has the power to conjure new Bitcoins out of thin air.

As such, Bitcoin itself is nearly impossible to regulate. And the government at least seems to understand this point. Which is why the director so emphatically denies attempting to regulate the digital currency.

But that doesn’t mean they can’t spread fear, uncertainty, and doubt.

In this short 4-page speech, the Director twice made a connection between Bitcoin and (you guessed it) terrorism. Twice more connected Bitcoin to those who would exploit children. And four times linked digital currency to ‘criminals’ in general.

It’s certainly enough to scare most people away.

And, even though they cannot control Bitcoin, FinCEN is obviously laying the foundation to regulate every business that touches Bitcoin, from exchange houses to swap websites to digital wallet providers.

These companies will undoubtedly be forced to bed down with Uncle Sam and join the Big Brother network of financial snitches.

As we reported a few weeks ago, the government already took down the operators of the Liberty Reserve digital currency service... as well Bernard von Nothaus, the issuer of the now defunct Liberty Dollar.

They even went as far as to brand Nothaus a domestic terrorist for “making, possessing, and selling his own currency”. And even though he was convicted over two years ago, von Nothaus is STILL awaiting sentencing.

It just shows the depths they will sink to enslave people to their fraudulent fiat system. They’ll use any obscure law they can find, and they’ll imprison people if they have to.

And if they can’t, they’ll just regulate an entire industry... all to ensure that people have limited alternatives to their rapidly devaluing paper money.

(As an aside, it’s perfectly legal, and non-reportable in some instances, to hold gold and silver outside of the country, locked away in a non-bank safety deposit box. This is still a great option.)

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knukles's picture

Conspiracy Confirmed! 

whotookmyalias's picture

Makes me want it even more.

pods's picture

The Liberty Dollar is perfect 1984 material as it actually contained silver.

Government sucks.




macholatte's picture



It's going to be interesting when doctors start to accept bitcoin in the post Obamacare gestapo environment, beginning January 1.  I can hardly wait.

phyuckyiu's picture

We must outlaw teh bitc0inz to stop the pedobear's. I think we can all unite behind this noble cause. I also hear teh bitc0inz supports Hezbollah and gives Sarin to Al CIAda.

Kirk2NCC1701's picture

You don't have to wait.  Doctors are already accepting Bitcoin:

What you got to say now, Treasury bitchez and Gov trolls!?


thisandthat's picture


Online med consults

That alone...

auntiesocial's picture

no mention of the Wall Street and Bankster economic terrorists.... par for mudda firkin course.

CPL's picture

Because that would require the media to provide balanced reporting and doing their jobs. 

Right now 90% of them are flopping around writing coverage that only fresh wrapped fish would deem proper.


Other than Zerohedge and the links to the left.  They are all that is left of English Business media that meticulously tears apart a problem and flags issues.  The MSM now in Business news, if you followed any of their advice, you'd be broke in a year.


(Mish's Global Economic Analysis is outstanding and he swings a heavy club of reason and sanity, and poke around for Cognitive Dissonance's stuff, outstanding pontification and philosophy.)

One And Only's picture

Bitcoin rapes babies.

CaptainObvious's picture

It'll burn your crops, poison your water supply, and bring havoc to your nation!

cougar_w's picture

Bitcoin is a direct spawn of Satan.

knukles's picture

I'm confused.
My mom used to tell me that!


Next ting you'll tell me is it's genetically modified and patented by Goldman.

macholatte's picture







phyuckyiu's picture

Teh Bitc0inz makes baby Jesus cry.

CPL's picture

The bitcoin slid around the side of the door frame.  Back pressed against the wall, BtC checked his corner quickly.  A reply of random staccato tacking as bullet wizzed wildly everywhere.  BtC wiped his hand on a pant leg to clear of the dirt and blood and pulled his laptop out.  BtC steadily loaded the Bitcoin miner and checked on the crunching.  'Soon' he hoped.

"We know you're in there, come out rendered algorithm trading as a capital device!!!"  shots rang out a again.  "Motherfucker!!"  Followed by the steady chug of AR-15 pumping out rounds, followed by various calibres after the fact fired in every direction.

BtC noticed he'd generated a set.   He finalized the transaction, then 200 more BtC's showed up, to which they pulled out their laptops and started to mine BtC from their systems.  BtC checked around the doorway and as usual the entire room was packed with blind well heeled gentlemen shooting each other and admonishing staff to take paycuts simultaneously with a forced monthly real inflation of 3%.

BtC shook his head then started to generate another set.  All the Bitcoins knew it was only a matter of time before those loons shot each other and unicorns that shat skittles then BtC would bring some measure of responsible currency management by proxy of the way Bitcoins are set up.  The machines to mine them all haven't been invented yet and would require some really freaky spacial quantum math that about four people on the planet know how to do it....barely.  It's absurd complexity and infinite variation with finite dimensions is what makes it impossible to regulate. 

The End, best kid's bedtime story ever.

cougar_w's picture

Bitcoin is genetically modified from naturally occuring greed, and is patented by Monsanto. Just like everything else in the world.

Long-John-Silver's picture

Bitcoin rapes babies.

It'll eat your children!

It'll burn your crops, poison your water supply, and bring havoc to your nation!


So it's Government Business as usual.

nmewn's picture

Pretty much.

With an added fascist twist, one has to pay for net service and procure a device from some hated "capitalistic" company.

Aside from that, the homeless, the destitute & the panhandlers need not beg for this type of "hot money"...the government has a program for them ;-)


cougar_w's picture

And man does that ever have their undies in a bunch!

NoDebt's picture

Yes it does.  "Digital currencies" are a GRAVE threat to central banks everywhere.  They WILL be crushed under regulation, legal entanglements or outright bans (ask InTrade about that).  Currency control is one of the last things sovereigns have at their discretion to sweep the bad debt under the rug.  Take that away and they would have to <gasp!> live within their means (or however far they can tax before the pitchfork-n-torches crowd shows up on their doorstep).

I still hold my small BitCoin account.  If only out of a morbid sense of curiosity.


SpykerSpeed's picture

"They WILL be crushed under regulation, legal entanglements or outright bans (ask InTrade about that)."


InTrade was centralized.  Bitcoin isn't.  So it can't be stopped.

dark pools of soros's picture

There are a lot of fronts that bitcoin stands well on.   Even if you forgo using it to hide your wealth, you can still use it as a much better way to buy things internationally than anything else.  And those merchants don't have to give a fuck about uncle sam or master card

and as I said a few times, it is a lot easier to mine bitcoins right now and use them to buy PMs than it is to actually mine PMs

I've already received three orders of silver and one order of gold since I've been mining btc - you guys are on ZH for fucks sake and completely asleep at the wheel.. 

all you ZH haters will still have buyin periods since its price should swoon for the next 6 months but come early next year it should ratchet up a few more notches once this latest ASIC mad dash pans out


XitSam's picture

Digital currencies are fine with the government as long as they are run, monitored, tracked and logged by the government, and by corollary, the established banking system.

It's all about control.

otto skorzeny's picture

EVERY TRANSACTION IS TAXABLE/TRACEABLE when it is digital- the ultimate dream of every govt

dark pools of soros's picture

I just bought a bunch of shirts from Thailand directly using BTC.. no tax.. you guys are freaking stuck on loonybin about btc

how can any of you still be on the internet these days the way you are petrified of da govment?

nope-1004's picture

I don't think they were referencing btc today, but in general what the motive for the .gov is with respect to digital currency.  It's not btc itself, it's whatever digital currency the .gov wants incorporated ON THEIR TERMS and under their control.  You bet, once in place, you will be monitored, tracked, and taxed.  Maybe not btc, but surely some other mechanism.  So simple to monitor everyone with computer programs.


cougar_w's picture

Gypsy curses are the best.

"For this offense you will be dragged through all 18 holes of a poorly maintained golf course by deranged camels -- nude!"

knukles's picture

Holy smokes!  I promise I'll be good

cougar_w's picture

Whatever you do, do not fuck around with gypsies. That's the lesson here.

CPL's picture

especially ones that own camels.

davinci7_gis's picture

Sad, but they are right...that the bitcoin will be eventually eaten by the spawn of the creature from Jekyll Island!

EscapeKey's picture

Major drug dealers operate in US Dollars - in fact, weighing the money by the ton.


pods's picture

Maybe FINCEN should look into how this drug money is handled/laundered?

Oh wait, they get a cut, I'm sorry.

Can you say hyprocritical?

I knew you could.


Kirk2NCC1701's picture

They hate the Euro too, as it comes in 200 and 500 EUR notes.  They hate that kind of competition cutting into their Velocity of Money.

Ban the Euro! /s

PaperBear's picture

Bitcoin is a tool. Bitcoin is an inanimate virtual object.

Director, please quit relating a tool as 'terroristic'.

XenoFrog's picture

A tool created as a proof of concept, and utilized by con men and fools, each thinking they're getting one over on the other.

Schmuck Raker's picture

Let's leave government out of this discussion, shall we?

XenoFrog's picture

Bitcoin: For all your Drug and Child Pornography needs.

NidStyles's picture

Seems to be a lot of that stuff going around before Bitcoin was a thought.


phyuckyiu's picture

Yes! Yes! Outlaw Teh Bitc0inz because of the pedobears! IT'S FOR THE CHILDREN!


Wanna know what your government will look like in 50 years when the majority of voters is women? Look no further than Xeno.

nmewn's picture

lol...before a gleam in bitsters eye.

I'll say again, as a concept, as a device, to keep prying eyes away from what someone chooses to do with their money, bitcoin is ok in my book.

But, its clearly not is universal.


XenoFrog's picture

Like throwing gasoline on a fire, offering risk free (relatively) trade of the stuff has only encouraged the internet drug trade and child through Silk Road.

fiftybagger's picture

Go back to Huffpo where you belong

seek's picture

Not all, I'm afraid there's still plenty of drug dealers and other criminals that insist on cash.