First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
US agencies coming around cautiously to seeing benefits in virtual currencies
- — 19 November, 2013 05:40
Federal officials told a U.S. Senate hearing on Monday that virtual currencies like bitcoin can offer benefits to the financial system, but also cautioned about its possible misuse for illicit activity.
"The Department of Justice recognizes that many virtual currency systems offer legitimate financial services and have the potential to promote more efficient global commerce," said Mythili Raman, acting assistant attorney general at the Department of Justice in her testimony before the Senate Homeland Security and Governmental Affairs Committee.
"We have also seen, however, that certain aspects of virtual currencies appeal to criminals and present a host of new challenges to law enforcement," Raman added in her written testimony before the committee, which is conducting an inquiry into virtual currencies.
Law enforcement agencies suspect that virtual currencies are being used for money laundering and other illegal activities as they typically allow users to remain anonymous. Dealers of drugs and other illegal items on online marketplaces like the Silk Road and Black Market Reloaded are said to have taken cover behind the Tor anonymity service and anonymous bitcoin transactions. The Silk Road site was brought down about a month ago by U.S. officials and its alleged owner and operator arrested.
Ernie Allen, president and chief executive officer of the International Centre for Missing & Exploited Children, said his organization is concerned about the apparent migration of commercial child sexual exploitation and other criminal enterprises to a "new unregulated digital economy, made up of digital currencies; anonymous online payment systems; anonymous internet tools; and file hosting companies."
Criminals have exploited virtual currency systems because they do transfers quickly, securely, and often with a perceived higher level of anonymity than that afforded by traditional financial services, Raman said.
Tom Carper, U.S. Senator for Delaware and chairman of the Homeland Security and Governmental Affairs Committee, said in his opening statement that some people wanted to play by the rules, which is difficult to do "if the rules or proper authorities aren't clear or if the future is uncertain."
The Treasury Department's Financial Crimes Enforcement Network has tried to bring some rules to virtual currency, said Jennifer Shasky Calvery, director of FinCEN, in her testimony. "Virtual currency is a medium of exchange that operates like a currency in some environments but does not have all the attributes of real currency," Calvery said. "In particular, virtual currency does not have legal tender status in any jurisdiction."
Calvery made a distinction between centralized virtual currencies that have a centralized repository and a single administrator, and decentralized currencies like Bitcoin which transmit value electronically between parties without an intermediary.
"We have seen both centralized and decentralized virtual currencies exploited by illicit actors," Calvery said, but added that any financial institution, payment system or medium of exchange could also be exploited for money laundering purposes or terrorist-financing. FinCEN has increased its oversight of virtual currency operators by guiding administrators or exchangers of virtual currencies that they must register with FinCEN, and institute certain recordkeeping, reporting and AML (anti-money laundering) program control measures.
Virtual currency is not necessarily synonymous with anonymity, and a convertible virtual currency with appropriate anti-money laundering and know-your-customer controls under U.S. law, can be as safe from exploitation by criminals and terrorists as any other money services business could, Raman said.
Carper has previously said that the government should evolve thoughtful policies rather than play 'whack-a-mole' with the latest website, currency, or other method criminals are using This approach translates into challenges for law enforcement as well. Hiring, developing, and retaining skilled criminal investigators that are required to investigate crimes involving digital currencies and transnational organized criminal groups is a high priority for the Secret Service, but is challenging in the present fiscal environment, said Edward Lowery III, special agent in the Secret Service.
Some agencies have already taken measures to accept virtual currencies in some way. The U.S. Federal Election Commission, for example, recommended in an advisory this month that bitcoins can be accepted as in-kind campaign contributions, though disallowing disbursements through bitcoins from a bitcoin wallet.