If legal experts are to believed, they say that thanks to a series of multimillion-dollar thefts and losses, recently, a number of federal regulators want to step up their oversight of Bitcoin. However, they also suspect whether they would be able to succeed in their effort as Bitcoin does not fall to any jurisdiction and beyond the controls of any state.
Additional concern is that it is developed using cryptography. Despite all the practical problems, there is an incredible interest in regulating Bitcoin at the federal level by agencies like the Federal Trade Commission (FTC), the Com¬modity Futures Trading Commission, the U.S. Securities and Exchange Commission and the Consumer Financial Protection Bureau.
Thus, there are four big agencies that are willing to interfere into the digital currency’s sphere for the protection of consumer or investor’s rights. The trouble for Bitcoin started after the collapse of Mt. Gox, a major Bitcoin exchange. Its collapse meant huge losses to investors in the tune of millions of dollars.
Now, all the above mentioned agencies are charged with protecting consumers or investors from fraudulent activities like Mr. Gox. As has been mentioned the trouble is these agencies and their regulatory jurisdiction does not provide them any leeway to act upon. However, as Bitcoin expands and reaches to new segments of customers, they need to expand jurisdiction.
Many Regulatory Bodies Seem to Interfere into Bitcoin to Protect Investors’ Interest
Currently, there are more than 12 million Bitcoins in circulation that if converted to USD values at $8 billion. Out of the above mentioned agencies, the likelihood that FTC could be the one that may initiate its regulation under Section 5 of the Federal Trade Commission Act, which bars unfair or deceptive conduct.
Similarly, another agency that may initiate regulation is the Consumer Financial Protection Bureau (CFPB) which came up with a proposal wherein it would supervise international money-transfer providers for the first time. Here consumers will be given 30 minutes to cancel a transfer for any reason and would be responsible for certain types of errors.
However, the strongest case is for the Treasury Department’s Financial Crimes Enforcement Network, or FinCen which according to legal luminaries was the first federal overseer to offer Bitcoin guidance.
The agency in March 2013 asked all those who do Bitcoin mining to register themselves as money-service businesses and comply with money laundering laws under the Bank Secrecy Act.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org