Archive for December, 2013

17

Bitcoin is Legal, But Dangerous

Dec
No Comments   Posted by Lyn |  Category:Law

A digital currency that began as $20 apiece shot to a very high $5000 to today’s $1000 per coin is how bitcoin became legendary. Proposed as the first digital currency in the world, the legal interest of governments, law enforcement and tax authorities continue as they try to fit it into existing financial frameworks. Bitcoin is probably legal, albeit not all merchants accept it.

What makes bitcoin controversial for many law enforcement and governments is its decentralized nature; “miners” make use of high-powered computers to have them automatically solve problems and collect the coins for use in trade.

According to some legal experts bitcoin is legal unless it is being used to purchase drugs or other illegal products incognito. The incident of Silk Road led to the high controversy surrounding the digital currency.

The anonymous transaction codes of bitcoin, which is automatically stored in the bitcoin network as purchases are made, made it seem as the perfect money laundering currency. The FBI highlighted its warnings against the currency, namely off-shore transactions being unregulated.

Authorities consider bitcoin to be a currency that could legally be used. However, fears of its usage and its decentralized nature makes it dangerous as it is a “shady” form of currency and criminals could use the coins as a scamming tool.

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