Caldwell: DOJ Acknowledges ‘Legitimate’ Uses of Digital Currency
The Justice Department will continue to prosecute those who use virtual currency to commit crimes, but DOJ is aware of the many legitimate actual and potential uses of virtual currency, and encourages compliance with regulations and state license requirements, said…
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Assistant Attorney General Leslie Caldwell Friday during an American Bar Association event on digital currencies. Digital currency has the “potential to promote a more efficient online marketplace” and potentially “lower costs for brick and mortar businesses, by removing the need to pay credit card-related costs,” Caldwell said. In theory, digital currency can help speed up and reduce the cost of cross-border transactions, she said. “Criminals have been among the first to enthusiastically embrace the use of virtual currency, primarily in crime involving the Internet,” Caldwell said. “Many criminals like virtual currency systems because these systems conduct transfers quickly, securely and with a perceived level of anonymity.” The “irreversibility of payments made in virtual currency and lack of oversight by a central financial authority is appealing,” as is the ability to “conduct international peer-to-peer transactions that lack immediately available personally identifying information,” Caldwell said. DOJ has had a strong record of bringing cases in which virtual currencies were used to facilitate criminal conduct, by relying principally on money services business, money transmission and anti money laundering statutes, she said. Some states such as New York established virtual-currency specific licensing requirements, Caldwell said. “As virtual currencies become more mature and better understood by criminals, we expect to see an increase in both individualized criminal activity and large-scale money laundering enterprises.”