Bitcoin Faces Government Crackdown for Illegal Drug Purchase
By on June 9th, 2011

This was to happen sooner or later. How can any government allow a currency that claims to be decentralized, is totally unregulated and is not under its direct control? On top of that, the EFF started accepting donations in Bitcoin a few days ago and the crackdown was going to come sooner or later once Bitcoin started gaining credibility like this.

bitcoin

Two US senators are encouraging federal authorities to crack down on Bitcoin, the reason being its use in illegal and anonymous drug purchase. Reuters reports,

Democratic Senators Charles Schumer of New York and Joe Manchin of West Virginia wrote to Attorney General Eric Holder and Drug Enforcement Administration head Michele Leonhart in a letter that expressed concerns about the underground website “Silk Road” and the use of Bitcoins to make purchases there.

The nature of Bitcoin makes it extremely hard for authorities to track down these drug abusers and this can prove to be a fatal blow to the currency system that could have shaken things up in the online world.

In further investigations, it has been found that a majority of the bank accounts being used in this drug abuse are based outside of the US. The decentralized nature combined with offshore bank accounts leaves very little in the hand of federal authorities to act upon. Decentralize ideas are hard to track, but they are equally hard to manage and operate. Bitcoin is facing the same problem of rogue users that any decentralized body without a central control will face sooner or later.

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Author: Chinmoy Kanjilal Google Profile for Chinmoy Kanjilal
Chinmoy Kanjilal is a FOSS enthusiast and evangelist. He is passionate about Android. Security exploits turn him on and he loves to tinker with computer networks. He rants occasionally at Techarraz.com. You can connect with him on Twitter @ckandroid.

Chinmoy Kanjilal has written and can be contacted at chinmoy@techie-buzz.com.
 
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