US Treasury denies it is trying to torpedo Bitcoin
In remarks given late last week to thecuriously named United States Institute for Peace, the head of the Treasury'sFinancial Crimes Enforcement Network (FinCEN) vociferously denied any attemptsat regulating digital currency... specifically Bitcoin.
The speech, entitled "The virtualeconomy: potential, perplexities and promises", can be downloaded here for yourreading pleasure. But here's the gist:
- The government views virtual currenciesas a "financial service", and virtual currency exchanges as"financial institutions" that are "as much a part of thefinancial 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 USgovernment.
- Resistance is futile. If businesseswhich provide digital currency services fail to comply, those individuals andcompanies "are going to be held accountable." While those who comply"have nothing to fear from Treasury."
It's clear that Bitcoin is smack dab onthe US government's radar, despite the digital currency's tiny market size. Butit's also clear that they don't understand Bitcoin at all.
They claim, for example, that a digitalcurrency is a 'financial service', as if Bitcoin is some sort of mutual fund orhome equity line of credit.
Like gold, digital currency is not afinancial service. It's a proxy AGAINST the financial system that takes one'ssavings out of fiat currency.
Bitcoin takes things a step further inthat it is completely decentralized. There is no Bitcoin issuer that regulatesits supply like a central bank, and no tiny elite that has the power to conjurenew Bitcoins out of thin air.
As such, Bitcoin itself is nearlyimpossible to regulate. And the government at least seems to understand thispoint. Which is why the director so emphatically denies attempting to regulatethe digital currency.
But that doesn't mean they can't spreadfear, uncertainty, and doubt.
In this short 4-page speech, the Directortwice made a connection between Bitcoin and (you guessed it) terrorism. Twicemore connected Bitcoin to those who would exploit children. And four timeslinked digital currency to 'criminals' in general.
It's certainly enough to scare most peopleaway.
And, even though they cannot controlBitcoin, FinCEN is obviously laying the foundation to regulate every businessthat touches Bitcoin, from exchange houses to swap websites to digital walletproviders.
These companies will undoubtedly be forcedto bed down with Uncle Sam and join the Big Brother network of financialsnitches.
As we reported a few weeks ago, thegovernment already took down the operators of the Liberty Reserve digitalcurrency service... as well Bernard von Nothaus, the issuer of the now defunctLiberty Dollar.
They even went as far as to brand Nothausa domestic terrorist for "making, possessing, and selling his owncurrency". And even though he was convicted over two years ago, vonNothaus is STILL awaiting sentencing.
It just shows the depths they will sink toenslave people to their fraudulent fiat system. They'll use any obscure lawthey can find, and they'll imprison people if they have to.
And if they can't, they'll just regulatean entire industry... all to ensure that people have limited alternatives totheir rapidly devaluing paper money.
(As an aside, it's perfectly legal, andnon-reportable in some instances, to hold gold and silver outside of thecountry, locked away in a non-bank safety deposit box. This is still a greatoption. More on this in a future letter.)
Senior Editor, SovereignMan.com