Bitcoin is an alternative form of currency, making headlines throughout the world. There’s often been problems, on a global scale because of the lack of a unified currency, and some proponents of the Bitcoin are pointing to this as the solution. There are frequently issues surrounding the ability to transfer money between the U.S. and China, and theoretically, the use of the digital Bitcoin could alleviate these problems, but regulations on the Bitcoin are growing.
Basics of the Bitcoin
While most people are aware of the existence of the Bitcoin, they may not know exactly what it is. In simplest terms, the Bitcoin is not only a currency, but also a payment network, and it’s becoming increasingly accepted by mainstream retailers and companies, like Overstock.com.
Bitcoin is designed not by a government, which is what makes it different from other forms of currency. Instead, its sole purpose is as a digital monetary system—meaning instantaneous payments can be made, anywhere in the world, and for a fraction of the cost of using other mechanisms to make international payments.
Despite the positive components of Bitcoin, as it’s becoming a more prevalent form of currency, governments are starting to take notice, and that includes the regulation of illegal behavior.
Recently, large scale seizures and the creation of laws pertaining to Bitcoin have made international headlines.
For example, the U.S. government recently seized over $2 million in Bitcoin funds from the Mt. Gox company. The money was seized because an American judge found evidence of money transmitting without the proper licensing. The large seizure was likely intended to set a tone for businesses operating in the U.S.: just because digital currency is used, doesn’t mean laws don’t apply.
Silk Road Seizure
Perhaps the biggest Bitcoin-related seizure to-date is nicknamed the “Silk Road Seizure,” in which the online black market, Silk Road, was shut down by authorities. Silk Road specialized in nearly anything illegal, including drugs, and the only form of currency used by the network was the Bitcoin.
China’s View of the Bitcoin
At the end of 2013, Bitcoin took a big hit in value, as the Chinese government made an announcement regarding its stance on the use of the digital currency. Along with Chinese governmental officials, representatives from the People’s Bank of China said Bitcoins are not viewed as a currency, and can’t be used as a form of payment by any of the country’s business or financial institutions. This puts serious limitations on people hoping to expand their transfer of money to and from the country, and leaves in question whether or not the U.S. and other countries will follow suit.
Seizure of Bitcoins
While we mentioned a few high-profile seizures, these were done by the FBI, not customs agents. For many people, this leaves open the possibility of avoiding money seizure by customs agents at the border, or in airports, through the use of the currency.
Currently, there’s little regulation because it is such a new concept, and until further regulation is explored or created, the Bitcoin can be a valuable resource for the transfer and use of money. The question of how long continues to be the question on everyone’s mind.
If you’re using Bitcoin, and have questions or concerns surrounding the legal ramifications as well as any customs currency seizure issue at an airport or border, contact www.MoneySeizures.com (Abady Law Firm, P.C.) to speak with a customs attorney who can provide the necessary guidance on what remains a murky issue.