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US attorney general says criminals use crypto currencies

Hold up, says Eric Holder
Wed Apr 09 2014, 14:48

Bitcoin 3D logoUNITED STATES attorney general Eric Holder has told the US House Judiciary Committee that criminals use crypto currencies and that US law enforcement has no way to keep it free from crime.

Holder testified to the committee on a range of issues and used his time to tell it what keeps him and the US Department of Justice (DoJ) ticking over.

Crime and technology is the short version, and all sorts of things now appear on his radar. One of these things is the nascent digital currency Bitcoin, which already has enemies in the US.

"More than ever before, the department's law enforcement work today must contend with new and emerging technology, including virtual currencies such as Bitcoin," he said.

"Virtual currencies can pose challenges for law enforcement given the appeal they have among those seeking to conceal illegal activity. This potential must be closely considered."

Holder said that work is being done with "financial regulatory partners" that will start to "account" for Bitcoin, adding that people that use it to trade drugs will have to consider their options.

"Those who favor virtual currencies solely for their ability to help mask drug trafficking or other illicit conduct should think twice; the department is committed to innovating alongside this new technology in order to ensure our investigations are not impeded by any improvement in criminals' ability to move funds anonymously," he said.

"As virtual currency systems develop, it will be imperative to law enforcement interests that those systems comply with applicable anti-money laundering statutes and know-your-customer controls."

It is a tough old game though, and the US attorney general said that his department works hard to quash criminality. He said that now more than ever is the time to be both smart and tough on crime.

"We will never be able to simply arrest and incarcerate our way to becoming a safer nation," he added.

"That's why we need to be both tough and smart in our fight against crime and the conditions and behaviors that breed it."

Also keenly aware of Bitcoin is David Andolfatto, St Louis Federal Reserve Bank VP and its director of research. Last week Andolfatto said that while Bitcoin will not replace the dollar, it could become a threat to central banks.

"It will discipline the Fed and other central banks to continue to run responsible policies - if they don't, people could switch to something else," he said in an interview with the Business Insider.

"If a central bank, a government, knew people could stop using domestic currency and flock to an alternative, that would force the government to behave more responsibly." µ

 

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