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The Bitcoin Bugle: On Global Transmissibility, Relative Criminal Heinousness, Marx, Engels and the Crypto Revolution

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The fake currency is still not the Fed’s problem, which is perhaps why the central bank can look upon it—from a safe distance—with a benign, almost encouraging eye. Those whose jurisdiction encompasses the sort of crimes that the Fed says can just as easily be committed with its own money are less so inclined.

Bitcoin’s “global transmissibility opens new markets to merchants and service providers,” said the report of the May 9 meeting, which was recently posted on the Fed’s website and first reported Sunday by Bitcoin Magazine.

The group said that illicit uses for bitcoin are “rampant” but suggested they are no greater for the digital currency than for sovereign-issued currencies. It also said that problems associated with bitcoin’s anonymity are overstated, given the transparency of the sytsem’s public blockchain ledger….

The group did not see bitcoin posing much of a threat to the banking system, at least for now, in part because of bitcoin’s current security risks and volatility, which hinder mainstream adoption.

U.S. authorities have opened a new front in their investigation into bitcoin exchanges and other businesses that deal in the online currency, examining possible ties between the firms and the online drug bazaar Silk Road, according to people familiar with the matter….

The subpoenas to Mt. Gox demanded customer-transaction logs and materials related to solicitation of investors. But prosecutors and Federal Bureau of Investigation agents also are examining whether the exchange and others like it may have processed transactions connected to Silk Road, the people said. Attorneys for Mt. Gox didn't respond to requests for comment.

Over in Amsterdam, the biterati have gathered to hear some politico-economic theorizing from this guy while trying to ignore the fact that their host’s newest board member has had to issue a strongly-worded letter insisting that he’s not the serial statutory rapist and engenderer of hostile work environments of legend. Plus, you know, even if he was, it’s not like his predecessors haven’t doneworse (see above).

In the opening keynote, CEO Patrick Byrne reportedly drew on references to Marx, Engels and the more contemporary U.S. scholar Francis Fukuyama to explain why he’s jazzed about the “crypto revolution.”

In the letter to the foundation – a body that functions as the de facto official organization for the far-flung bitcoin community — Mr. Pierce noted that the lawsuits alleging sexual abuse against him and two associates in 2000 were ultimately dismissed. Now, new lawsuits filed against four Hollywood figures by one of the plaintiffs from those lawsuits, Michael Egan, have revived attention on those prior cases involving Mr. Pierce….

“Despite a full investigation by the U.S. Attorney’s office, the FBI and the State of California into the allegations, I was never charged with anything whatsoever by anyone and was cleared of any wrongdoing,” Mr. Pierce wrote….

Mr. Pierce wrote in the letter, “I am sorry that 10 of 1,500 members chose to resign, but I am at a loss to explain why they would do so now and not after Mr. Karpeles allowed Mt. Gox to implode or Mr. Shrem was indicted. I am saddened and angered by this.”

BitBeat: The Fed’s Surprisingly Warm Take on Bitcoin [WSJ MoneyBeat blog]
Bitcoin Exchanges Probed Over Shuttered Drug Market [WSJ]
BitBeat: Bitcoin Conference Sure Doesn’t Lack for News [WSJ MoneyBeat blog]
New Bitcoin Foundation Director Pierce Defends Himself in Letter to Board [WSJ MoneyBeat blog]