Bitcoin experts, feds meet to discuss digital currency

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Bitcoin supporters met Monday with federal agencies interested in regulating the emerging crypto-currency — and they came away surprisingly happy.

The Financial Crimes Enforcement Network (FinCEN), which fights money laundering, invited the Bitcoin Foundation to discuss how the digital currency works and how federal regulators can best ensure it is not abused by criminals or narco-terrorists.

Marco Santori, chairman of the Bitcoin Foundation’s Regulatory Affairs Committee, was heartened by the agencies’ response. “We thought it went extremely well,” Santori told The Daily Caller News Foundation. “We were encouraged by the invitation, and there was really just a tremendous turnout.”

Santori told TheDCNF that FinCEN organized the meeting, but there were representatives from the Treasury, Federal Deposit Insurance Corporation and Comptroller of the Currency; regulatory agencies including the IRS; and law enforcement agencies including the Secret Service, Federal Bureau of Investigation and Drug Enforcement Agency.

Jerry Brito, a technology expert at the Mercatus Center, previously told TheDCNF that FinCEN had shut down three Bitcoin exchanges in early 2013 without fully understanding how the currency functions, but the government’s new proactive approach may signal a change in attitude.

“It was a really packed room, a really friendly reception,” Santori told TheDCNF. “There were active, engaged, interested questions from really every agency.”

Virtual currency Liberty Reserve was shut down by federal authorities in May for laundering $6 billion, but Santori told TheDCNF that “it’s the centralized nature of currencies like Liberty Reserve that terrorists, money launderers or whatever illicit actors have chosen — because they don’t like the public block chain that Bitcoin has.”

Other virtual currencies have allowed users to remain completely anonymous by storing data with one centralized authority, but Bitcoin operates differently. Bitcoin creates a public record of every transaction, called a “block chain,” available to all Bitcoin users.

Bitcoin insiders have long expected regulatory agencies to take interest as Bitcoin grew. Santori expressed optimism about the government’s first steps toward understanding the currency.

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Sarah Hurtubise