New York and U.S. Open Investigations Into Virtual Currencies
State and federal officials are widening their investigations into the oversight of bitcoin and other virtual currencies. Such currencies are frequently used in online transactions that are not tracked by traditional financial institutions, and the U.S. Senate’s committee on homeland security recently sent a letter to major financial regulators and law enforcement agencies inquiring about the “threats and risks related to virtual currency.” Meanwhile, New York financial regulator Benjamin M. Lawsky sent subpoenas to 22 firms involved with bitcoin to some degree, including those that have publicly discussed investing in the currency or producing software that would permit bitcoin transfer and exchange. Lawmakers are concerned that bitcoin and other alternative currencies can be used for tax evasion, investor defrauding, and trade in illicit products. “If virtual currencies remain a virtual Wild West for narcotraffickers and other criminals, that would not only threaten our country’s national security, but also the very existence of the virtual currency industry as a legitimate business enterprise,” Lawsky warns. The Senate panel ramped up efforts to probe virtual currency in part because regulators lacked significant information about the technology, according to an insider.
From “New York and U.S. Open Investigations Into Bitcoins”
New York Times (08/14/13) Popper, Nathaniel