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:

http://www.fincen.gov/news_room/speech/pdf/20130613.pdf

 

- 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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Mon, 06/17/2013 - 19:40 | 3666327 knukles
knukles's picture

Conspiracy Confirmed! 

Mon, 06/17/2013 - 19:44 | 3666348 whotookmyalias
whotookmyalias's picture

Makes me want it even more.

Mon, 06/17/2013 - 20:33 | 3666477 pods
pods's picture

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

Government sucks.

Period.

pods

 

Mon, 06/17/2013 - 20:51 | 3666526 macholatte
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.

Mon, 06/17/2013 - 21:03 | 3666552 phyuckyiu
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.

Mon, 06/17/2013 - 22:13 | 3666715 Kirk2NCC1701
Kirk2NCC1701's picture

You don't have to wait.  Doctors are already accepting Bitcoin: http://youtu.be/E4Mqm9F0V30

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

 

Tue, 06/18/2013 - 13:04 | 3668667 sirk1t
sirk1t's picture

Online med consults for bitcoins: https://bitcointalk.org/index.php?topic=64287.0;all

Tue, 06/18/2013 - 14:05 | 3668909 thisandthat
thisandthat's picture

 

Online med consults

That alone...

Tue, 06/18/2013 - 07:54 | 3667380 venzen
venzen's picture

exactly. that seems to be the general plan:

Will the real Mr Satoshi Nakamoto please stand up

Mon, 06/17/2013 - 20:49 | 3666518 auntiesocial
auntiesocial's picture

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

Mon, 06/17/2013 - 22:49 | 3666827 CPL
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.)

Mon, 06/17/2013 - 19:40 | 3666329 One And Only
One And Only's picture

Bitcoin rapes babies.

Mon, 06/17/2013 - 19:55 | 3666373 IridiumRebel
IridiumRebel's picture

It'll eat your children!

Mon, 06/17/2013 - 20:03 | 3666393 CaptainObvious
CaptainObvious's picture

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

Mon, 06/17/2013 - 20:09 | 3666413 cougar_w
cougar_w's picture

Bitcoin is a direct spawn of Satan.

Mon, 06/17/2013 - 20:46 | 3666508 knukles
knukles's picture

Waiiiiiiiit...
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.

Mon, 06/17/2013 - 20:54 | 3666533 macholatte
macholatte's picture

 

FLASH  THIS JUST IN

 

BITCOIN SENDING MISSLES AND TROOPS TO SYRIA

BITCOIN DENIES SPYING ON INNOCENT BYSTANDERS

BITCOIN USED TO BUY 15 GAZILLION ROUNDS OF 40 CAL HOLLOW POINTS

Mon, 06/17/2013 - 21:09 | 3666564 phyuckyiu
phyuckyiu's picture

Teh Bitc0inz makes baby Jesus cry.

Fri, 06/21/2013 - 09:15 | 3666887 CPL
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.

Mon, 06/17/2013 - 20:57 | 3666538 cougar_w
cougar_w's picture

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

Mon, 06/17/2013 - 20:12 | 3666425 Long-John-Silver
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.

Mon, 06/17/2013 - 20:21 | 3666452 nmewn
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 ;-)

 

Mon, 06/17/2013 - 20:22 | 3666455 cougar_w
cougar_w's picture

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

Mon, 06/17/2013 - 20:35 | 3666481 NoDebt
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.

 

Mon, 06/17/2013 - 20:44 | 3666505 SpykerSpeed
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.

Mon, 06/17/2013 - 23:07 | 3666882 dark pools of soros
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

 

Mon, 06/17/2013 - 22:01 | 3666666 XitSam
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.

Mon, 06/17/2013 - 22:23 | 3666745 otto skorzeny
otto skorzeny's picture

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

Mon, 06/17/2013 - 23:15 | 3666899 dark pools of soros
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?

Mon, 06/17/2013 - 23:33 | 3666947 nope-1004
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.

 

Mon, 06/17/2013 - 20:24 | 3666459 MeelionDollerBogus
MeelionDollerBogus's picture

and a pox!

and a GYPSY CURSE

Mon, 06/17/2013 - 20:42 | 3666504 cougar_w
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!"

Mon, 06/17/2013 - 20:47 | 3666513 knukles
knukles's picture

Holy smokes!  I promise I'll be good

Mon, 06/17/2013 - 20:52 | 3666528 cougar_w
cougar_w's picture

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

Mon, 06/17/2013 - 23:27 | 3666934 CPL
CPL's picture

especially ones that own camels.

Mon, 06/17/2013 - 20:51 | 3666523 davinci7_gis
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!

Mon, 06/17/2013 - 19:41 | 3666333 EscapeKey
EscapeKey's picture

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

BAN THE US DOLLAR!

Mon, 06/17/2013 - 20:36 | 3666484 pods
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.

pods

Tue, 06/18/2013 - 00:08 | 3667028 Kirk2NCC1701
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

Mon, 06/17/2013 - 19:42 | 3666334 PaperBear
PaperBear's picture

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

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

Mon, 06/17/2013 - 19:44 | 3666345 XenoFrog
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.

Mon, 06/17/2013 - 19:47 | 3666351 Schmuck Raker
Schmuck Raker's picture

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

Mon, 06/17/2013 - 19:52 | 3666360 Shell Game
Shell Game's picture

You need TOR for that....

Mon, 06/17/2013 - 19:53 | 3666366 XenoFrog
XenoFrog's picture

Bitcoin: For all your Drug and Child Pornography needs.

Mon, 06/17/2013 - 19:58 | 3666378 NidStyles
NidStyles's picture

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

 

Mon, 06/17/2013 - 21:16 | 3666575 phyuckyiu
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.

Mon, 06/17/2013 - 21:25 | 3666599 nmewn
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 money...money is universal.

 

Mon, 06/17/2013 - 22:15 | 3666722 XenoFrog
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.

Tue, 06/18/2013 - 05:57 | 3667304 fiftybagger
fiftybagger's picture

Go back to Huffpo where you belong

Mon, 06/17/2013 - 20:00 | 3666381 seek
seek's picture

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

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