Bitcoin is challenging US law enforcement in tracking illegal activity according to a report recently published by The Wall Street Journal. The virtual currency’s encryption prevents tracing and that seems to be one of the highest concerns.
“Law enforcement has to figure out a way to deal with it” said one official. On the other hand, Law enforcement agencies are also aware that Bitcoin is increasing in popularity among more legitimate establishments.
With more establishments accepting Bitcoin, including some big players like the Chinese search giant Baidu, and other mainstream services like OKcupid, it will be difficult to simply outlaw the anonymous currency use. It is incidents like the closure of The Silk Road, that spark the negativity of Bitcoin in the eyes of law enforcement.
The Silk Road seizure is not the first time that Bitcoin has been associated to illegal activity. Back in April, the first federal Bitcoin seizure for the amount of 11.02 Bitcoins (approx. $2,200 currently) took place. The Bitcoins were seized by the DEA, but no charges were pressed, because law enforcement didn’t not know how to go about it.
From what we see, Bitcoin has only gotten stronger overall after these seizures reaching a high of just over $200 per BTC recently. The elimination of such organizations like The Silk Road has gained backing by Bitcoin supporters. It shows that the currency is moving towards becoming more legitimate and less criminal oriented.
“Silk Road got shut down. The bad guys lost.” said Brian Armstrong, CEO of Coinbase on the closure of the dark web’s eBay.
The popularity and support of Bitcoin, and the closure of The Silk Road haven’t made it’s image squeaky clean, with other outlets to replace it, like Black Market Reloaded, the crypto currency is still the coin of choice by the internet’s underworld.
FBS Receives Best Forex Broker Europe 2019 Award by The European MagazineGo to article >>
The issue that is being raised is the matter of tracing the transactions. All Bitcoin transactions are publicly visible through the blockchain, but with nothing to associate it to the owner but a long stringed wallet ID, it isn’t much to go by. Encryptions, and P2P transfers don’t help with tracing the criminals either, and just like cash, it is anonymous.
“Bitcoins seek to be virtually untraceable, leaving the buyers and sellers of drugs seemingly hidden from law enforcement,” said Lawrence Payne, a DEA spokesman.
Some less experienced criminals are easier to trace, according to Scott Dueweke, an associate at Booz Allen Hamilton who advises law enforcement agencies on virtual currencies. “If you’re sophisticated, which criminals are…then I think it is very anonymous.” he added.
We have yet to see the full potential of Bitcoin, and hopefully we will be able to, unless cyber criminals eventually lead authorities to set stringent regulations which would have a disastrous effect on the Bitcoin economy. The criminality that keeps getting behind Bitcoin seems to be putting it in a negative light, but with more legitimate establishments accepting it every day the future does seem bright.
Photo courtesy of: Wikimedia