Bitcoin is a cryptocurrency that has brought a great deal of innovation, investment success, and of course – questions. As a cryptocurrency, there is a great deal of apprehension in terms of the criminal activity the currency can be used for. To address the issues at hand Congress has considered passing legislation to put some regulations in place. The regulations are poised to prevent criminal activity – however, there are also fears that the regulations could stifle the innovation that bitcoin has provided for.
Bill S. 1241
The legislative bill that is dedicated to bitcoin and its activities is Bill S. 1241. Congress introduced the bill under the title “combating money Laundering, Terrorist Financing, and Counterfeiting Act of 2017”. Congress’ fears are not unfounded – recently a woman was indicted on charges of money laundering using bitcoin; her goal was to funnel money to ISIS using the cryptocurrency. The real issue now is just how likely the bill is to truly stifle the positive qualities that bitcoin offers.
According to the Bitcoin Foundation, the Bill “seeks to define anyone issuing, redeeming, or cashing Bitcoin as a financial institution. This would require them to comply with the Bank Secrecy Act, 31 U.S. § 5312 and require them to adopt the same formal reporting procedures as financial institutions for the purpose of reporting suspicious transactions.”
That is to say, those who conduct large transactions using bitcoin will need to be reported by the institution where the transaction takes place. This type of scenario already occurs when one deposits or transfers $10,000 or more in a U.S. bank. Applying these procedures to bitcoin will make it easier to safeguard against money laundering and other illegal activities.
Another goal that the legislation seeks to fulfill is ensuring that bitcoin falls under the definition of a “currency.” While a number of U.S. state courts have already designated bitcoin as a currency under state laws, it needs to be define as such under federal law as well to make it applicable to federal crimes.
What Bill S. 1241 Means for Bitcoin Enthusiasts
Of course, the main concern at hand for most bitcoin enthusiasts is what the new legislation means – if it passes Congress. Well, to put it simply, if one is not using bitcoin or does not plan on using bitcoin to perform an illegal transaction, then there really should not be anything to worry about. The proposed legislation is meant to ensure that there is suspicion raised for bitcoin transactions – akin to the regulations that already exist for traditional currency.
On the other hand, those who have plans to use bitcoin in an illegal manner do have something to worry about because the legislation provides oversight. All in all – those who use bitcoin for legal transactions should feel relieved in a sense. As previously mentioned, a woman was indicted on terrorism charges using bitcoin. Because of this legislation, it will be easier to track transactions like hers and to catch such acts – thereby protecting the people and the country.