Bitcoin regulation likely as states and feds warn of criminal use
“I think the trade off between Bitcoin and cash for national security risks is about the same,” Harper told The Daily Caller News Foundation. “The challenges are similar in tracking money, but Bitcoin actually uses a central registry of where Bitcoin is, where it comes from and where it’s gone,” which may make it easier to track than traditional currency.
“I think it’s mostly bureaucratic impulses and trumped-up national security risks,” Harper said.
A leaked FBI document from 2012 revealed the agency believes Bitcoin could be a unique opportunity for criminal masterminds to launder money and for hackers to take advantage of innocent users.
While virtual currency company Liberty Reserve was shut down in May 2013 for laundering a total of $6 billion of criminal funds, at its very peak Bitcoin’s entire market share was less than $3 billion total, Harper explained. Large movements of drug money have been conducted in dollars, not virtual currency.