Litigation is a machine which you go into as a pig and come out as a sausage - Ambrose Bierce, allegedly
A UNITED STATES SENATOR is calling for a ban on Bitcoin because he's worried that it is grease for illicit activity and bad financial business.
Senator Joe Manchin has "demanded" that the crypto-currency be regulated, or at least be limited in some way. He made his demands in a letter to those who can do something about it.
Those people are US treasury secretary Jacob Lew, Federal Reserve chairwoman Janet Yellen, Commodity Futures Trading Commission (CFTC) acting chairman Mark Wetjen, Federal Deposit Insurance Corporation (FDIC) chairman Martin Gruenberg, Securities and Exchange Commission (SEC) chairwoman Mary Jo White, and comptroller of the currency Thomas Curry.
"This virtual currency is currently unregulated and has allowed users to participate in illicit activity, while also being highly unstable and disruptive to our economy. For the reasons outlined below, I urge regulators to take appropriate action to limit the abilities of this highly unstable currency," Manchin wrote.
"The very features that make Bitcoin attractive to some also attract criminals who are able to disguise their actions from law enforcement. Due to Bitcoin's anonymity, the virtual market has been extremely susceptible to hackers and scam artists stealing millions from Bitcoins users. Anonymity combined with Bitcoin's ability to finalise transactions quickly, makes it very difficult, if not impossible, to reverse fraudulent transactions."
Manchin might have been following the Silk Road story, or similar reports. He told the regulators, "Individuals are able to anonymously purchase items such as drugs and weapons illegally," and added that China and Thailand have already banned it.
Proud of his country, Manchin does not want the US to have to play catchup, and he said that if anyone should take a lead on banning something then it should be the United States.
"While it is disappointing that the world leader and epicenter of the banking industry will only follow suit instead of making policy, it is high time that the United States heed our allies' warnings," he said. "I am most concerned that as Bitcoin is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency."
Silk Road apparently troubled Senator Manchin enough, and this week he reeled back at the news coming out of the Mt Gox Bitcoin exchange and the potential implications.
"Two days ago, this exchange took its website down and is no longer even accessible. This was not a unique event; news of plummeting or skyrocketing Bitcoin prices is almost a weekly occurrence. In addition, its deflationary trends ensure that only speculators, such as so-called 'Bitcoin miners' will benefit from possessing the virtual currency," he added.
"There is no doubt average American consumers stand to lose by transacting in Bitcoin... This flaw makes Bitcoin's value to the US economy suspect, if not outright detrimental."
Sign up for INQbot – a weekly roundup of the best from the INQ