About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

89 Ind. L.J. 441 (2014)
Bitcoin and Money Laundering: Mining for an Effective Solution

handle is hein.journals/indana89 and id is 453 raw text is: Bitcoin and Money Laundering: Mining for an Effective Solution DANTON BRYANS INTRODUCTION Technology forges ahead at a rapid pace, whether we like it or not. Criminals recognize this inevitability and use technological improvements to advance their craft,' committing crimes from half a world away in real time. Meticulous criminals also use technological advancements to distance themselves from their illegal activities and profits through use of virtual banking and electronic money transfer systems, which allow criminals to buy, sell, and exchange goods without any physical interaction. Though such services use digital logs that serve to identify a sender and a receiver's digital identities, criminals possess the means to obfuscate their digital identity by simply spoofing their Internet Protocol address or by using another individual's account, essentially making their activities untraceable. New virtual currencies, such as Bitcoin, add yet another layer of anonymity by allowing users to transfer value without the collection of any personally identifiable information. Regulations often fail to affect such virtual currencies due to lack of foresight by the regulation writers, creating a legal gray area. Thus, criminals can continue to capitalize on technological innovation to bolster their illegal activities. Money laundering is one particular criminal craft that stands to benefit from technological advancement. This Note analyzes the effects of Bitcoin and analogous virtual currencies on anti-money laundering (AML) enforcement. Part I gives a brief primer on money laundering and virtual currencies. Part II offers a Bitcoin primer, which differentiates Bitcoin technology from traditional currencies and competing virtual currencies. Part III analyzes whether Bitcoin is legal to use or trade in the United States, using domestic and international adoption of Bitcoin for guidance. Part IV discusses whether current U.S. AML regulatory schemes encompass the entirety of Bitcoin use, finding that it does not. Finally, Part V offers suggestions for a regulatory scheme encompassing Bitcoin and analogous virtual currency technologies. Ultimately, this Note recommends regulating Bitcoin currency exchanges under existing AML regulation schemes instead of broadening statutory definitions to control all aspects of Bitcoin or analogous virtual currencies. t Copyright 0 2014 Danton Bryans. * J.D. candidate 2014, Indiana University Maurer School of Law; B.S. 2011, Michigan State University. I began studying, mining, and trading on the Bitcoin network in early 2011. 1 am grateful to Professors Fred H. Cate, Sarah Jane Hughes, and Anthony J. Rose for their guidance; to my fellow Indiana Law Journal members for their help preparing for publication; and to my family for their support. 1. See Cyrus Farivar, Man Accused of Placing GPS Device on Victim's Car Before Burglarizing Her Home, ARs TECHNICA (Apr. 28, 2013, 11:22 AM), http://arstechnica.com /tech-policy/2013/04/man-accused-of-placing-gps-device-on-victims-car-before-burglarizing -her-home.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most