Written by :
Published on :
New York State and federal law enforcement agencies are beginning to investigate the shortcomings of the virtual currency bitcoin just as it is on the verge of becoming more popular in the mainstream market.
From the New York Times:
The Senate’s committee on homeland security sent a letter this week to the major financial regulators and law enforcement agencies asking about the “threats and risks related to virtual currency.” These currencies, whose popularity has grown in recent years, are often used in online transactions that are not monitored by traditional financial institutions.
“This is something that is clearly not going away, and it demands a whole government response,” said a person involved in the Senate committee’s investigation, who spoke on the condition of anonymity because the inquiry is continuing.
The letter went out the same day that New York’s top financial regulator, Benjamin M. Lawsky, sent subpoenas to 22 companies dealing directly with bitcoin.
The digital currency has had its ups and downs in recent months (literally). Everything from the rollercoaster price fluctuations to the Winklevoss twins’ S-1 filing for a bitcoin exchange-traded fund to the Internal Revenue Service’ seizure of a bank account “connected with the largest virtual currency exchange” (Mt. Gox), all of which are referenced in the Senate committee’s letter.
It also states: “As with all emerging technologies, the federal government must make sure that potential threats and risks are dealt with swiftly; however, we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology.”
A handful of online gambling sites have begun to accept bitcoin, including Gambling911.com sponsor OnlineSportsBetting.com (OSB). Bitcoin-only sportsbooks and poker sites have also inquired with Gambling911 about advertising possibilities.
“It is in the common interest of both the public and the virtual currency industry to bring virtual currencies out of the darkness and into the light of day through enhanced transparency,” Mr. Lawsky’s notice said.
- Aaron Goldstein, Gambling911.com
