Bitcoin backers reach out to authorities

WASHINGTON — The Obama administration is joining with private companies to train law-enforcement
officials about Bitcoin and how to fight crime arising from use of the virtual currency.

The Blockchain Alliance partnership has two main goals, according to those involved: educate
investigators on how the technology works, and enhance the reputation of a digital currency that
has been associated with high-profile crime even as it has slowly gained mainstream acceptance.

The alliance announced on Thursday includes the departments of Justice and Homeland Security and
representatives of companies such as BitFury, BitPay and CoinBase that are involved in virtual
currency.

The alliance’s name comes from the term
blockchain, which refers to the digital ledger on which Bitcoin transactions are
recorded.

Supporters see Bitcoin, a decentralized form of money that offers users a degree of privacy for
their transactions, as a fast and easy payment system that is gaining legitimacy among regulators
and businesses. Last month, New York state regulators approved their first license for a company
dealing in virtual currency. Online retailer Overstock.com installed a Bitcoin ATM at its corporate
headquarters in Salt Lake City this year.

But Bitcoin also has been exploited by criminals in Ponzi schemes and as the primary currency of
Silk Road, the Internet drug bazaar whose founder was sentenced to life in prison this year. Two
agents from the Secret Service and Drug Enforcement Administration who were assigned to a Silk Road
task force pleaded guilty this year to siphoning off Bitcoin proceeds during their
investigation.

“Far too many people think of Bitcoin as the currency of criminals,” said Jason Weinstein, the
alliance’s director and a former Justice Department deputy assistant attorney general.

“We think that changing that misperception, that image problem, will be good for the growth of
the industry as a whole,” he said.

He said he envisions the alliance as a “one-stop shopping resource” for law enforcement,
offering training sessions and conference calls to answer questions about Bitcoin. Industry
participation is intended to signal a commitment to helping law enforcement weed out criminal
activity associated with Bitcoin.

Jerry Brito, executive director of Coin Center, a Bitcoin advocacy group, said the public
perception of the virtual currency is reminiscent of the Internet’s early days, when many saw the
World Wide Web as a hub for illegal activity. Just as that association has changed, so, too, might
the perception of Bitcoin, he said.

“We should get to a point where we don’t think badly of Bitcoin because criminals use Bitcoin,”
Brito said, and part of the way to get there is to draw attention to its legitimate uses.

TheBitcoinNews.com – leading Bitcoin News source since 2012