LlewClaasen,Executive Director of The Bitcoin Foundation, has announcedthat the organisationhas retained legal counsel to advisein its effort to fight against increasing federal and state regulation in the US. The foundation believes that increases in regulation are attempts to control and stifle the adoption and use of so-called virtual currencies such as Bitcoin.
In a press release, Claasen claimed that the organisations first priority is to attempt to build a more open and diverse dialogue with the USCongress. The effort is a response to the planned introduction of a bill thataims to bring Bitcoin into the scope of USmoney-laundering enforcement agencies.
Bitcoin is a virtual currency or “cryptocurrency” thatwas created by an unknown programmer (or group of programmers) under the name of Satoshi Nakamoto in October 2008. Unlike traditional forms of currency, Bitcoin and other cryptocurrencies use encryption techniques to regulate the generation of currency and thetransfer of funds. This means that the currency is decentralised so no single institution controls the Bitcoin network. At the time of writing, one Bitcoin is approximately worth 3,365.27.
Because of encryption, the use of Bitcoin can remain anonymous. Though receipts of transactions are stored in “blockchains”, users of the currency do not have their names, address, or other forms of personal information attached to their Bitcoin profiles. While some high street shops and bars accept the currency, many people associate the use of Bitcoin with the buying and selling of illicit services on the dark web.
Just last month two of the dark webs largest markets “Alphabay” and “Hansa”were seized in a joint effort from European police, Interpol, the FBI and the DEA. The websites users bought and sold drugs and chemicals from one another using Bitcoin to protect their identities.
US Attorney General Jeff Sessions said in response that, This is likely one of the most important criminal investigations of the year. He also claimed that The dark net is not a place to hide. We will find you.
The Bitcoin Foundation is, however, more optimistic about the future and use of the virtual currency. Their vision is to turn Bitcoin into a globally accepted method of exchanging and storing value which will operate without the need for third parties like banks.
In the release, Claasen said that, the increased regulatory push by federal and state authorities, if it continues, is sure to threaten the existence of the fintech[financial technology] industry nationwide.
MrClaasen added: Just as the fintech industrys use of cryptocurrency was stifled in New York by the adoption of the so-called Bitlicence, it is highly likely that increased regulatory and legislative burdens [placed upon Bitcoin] will have a similar negative impact.
The Bitcoin Foundation was founded as a non-profit in September 2012. The body’smission statement is to ensure that every human has the right to privacy in transactions that involve no harm to others and the right to economic participation without a bank account or credit history.
In their efforts to defend Bitcoin, The Bitcoin Foundation has retained the Ciric Law Firm, PLLC for counsel. The firm is currently challenging the US Department of Financial Services Virtual Currency regulation (Part 200 of Chapter 1 of Title 23 of the New York Codes, Rules and Regulations), which was promulgated in 2015 and is also known as the New York “Bitlicence”.
Speaking to The Independent, MrClaasen said, state and federal legislation creates hurdles for innovation, well in advance of knowing what the impact of the technology is going to be or what it enables.
[The Bitcoin Foundations] view is that it is not yet clear what bitcoin and cryptocurrencies are. But by regulating the technology prematurely, you put it into a box it might not fit into later on. Its not that we dont believe theres a time and place to regulate Bitcoin, were just saying that its too early and that regulation will just do harm to very innovative businesses and technologies.
When questioned on Bitcoins potential to be used for fraud, money laundering and the buying and selling of illicit goods, MrClaasen said, Reports by the European commission in June specifically found that there is very little of that activity, particularly there is very little terrorist funding and money laundering.
Claasen added: Bitcoin is too hard for criminals to use at the moment. Its easier for a criminal to use the United States dollar.
Alongside being the foundation’s Executive Director, MrClaasen is a member of the international marketing advisory boards the CMO Council Advisory Board for Africa, the Customer Experience Boardand The Forum to Advance the Mobile Experience. He is also the co-founder of Clicks2Customers, a digital marketing agency with annual billings of over 80 billion.
Claasen made it clear that Bitcoin Foundation, doesnt want to break the system, but it is concerned that the system is already broken.
Bitcoin has the potential to be a store of value thats outside the control of central banks. In the future, we would like to see more adoption of Bitcoin. Its not going to be the only currency, and it wont replace the current system, but among other options its a useful case for the future.
The venture capitalist from Cape Town claims that Bitcoin is not currently at a stage where there are concerns that it will interfere with global monetary policy.
Its immature technology, he claims. There is a perception that it allows unlimited transfer of value, but it can only do three or four transfers a second. The network cannot handle larger transactions.
A key reason Claasen opposes regulation is because, it is not possible for governments to take the view they want to regulate Bitcoin. Its important to understand that a decentralised currency means one which is not under control by anybody.
I understand that regulators need to protect the currency and people from risk. [In the future] regulators will probably regulate at the end points of the cryptocurrency network. I get that, its inevitable. Around the world the view is the same. But governments and financial services are already struggling, as in Venezuela, and people need an alternative way.
Llew Claasen concluded that,Aside from other things, [Bitcoin] is a positive technology. It is not one that seeks to destroy or disrupt. Its a pity when regulators view it as something that is dangerous.
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