Governments all over the world have no love lost for people with an interest in Bitcoin. That’s not entirely surprising, considering Bitcoin cannot be controlled or regulated directly. That doesn’t keep governments from trying to impose their will, though. A new US Senate bill aims to criminalize the concealed ownership of Bitcoin. It’s a very disturbing development that will only push more people toward privacy-oriented currencies.
Bitcoin Ownership in the United States
Even though most of the Bitcoin-related value and price changes are expressed in US dollars, it has become increasingly apparent that the US government has no love lost for the world’s leading cryptocurrency. Although the US doesn’t have any official Bitcoin regulation at this time, it is certainly throwing its weight around. More specifically, it came out on top in the recent IRS vs Coinbase case, which created a rather intriguing and annoying precedent.
To make matters worse, a new US Senate bill has been drafted. This proposal targets owners of Bitcoin, but it will most likely extend to other traceable cryptocurrencies as well. More specifically, the goal is to modernize AML and CTF laws to include regulation of Bitcoin and other cryptocurrencies. This will not just apply to mainstream consumers, but also any company facilitating the exchange and trading of said currencies. The proposal is known as S.1241 and portends a problematic future for US-based Bitcoin holders.
The new bill aims firstly to criminalize the intentional concealment of ownership or control of a bank account. This sounds problematic enough, although it has no direct impact on Bitcoin. Unfortunately, cryptocurrency enthusiasts are not off the hook. The very same bill will criminalize the intentional concealment of ownership or control of any digital currency known today or in the future. Given Bitcoin’s transparent nature, proving said ownership is not a challenge at this point in time.
There are many reasons as to why people within the United States would not publicly disclose ownership of cryptocurrencies. Although they are legally bound to fill out tax forms regarding gains or losses associated with Bitcoin or altcoins, plenty of people have an “official” portfolio and some money on the side. It is this money on the side which irks some Senators right now, and they want to make concealing this information a criminal offense. Even if one forgets he or she has some money stored on an exchange or in an online wallet, it may become a criminal offense to not report it.
The big question is whether or not this law, if passed, will have ramifications on the international level. A lot of cryptocurrency exchanges are located in the US, which means all of their customers may very well be vulnerable to such charges. While this US Senate bill hasn’t been turned into law just yet, it is a very disturbing development to keep an eye on. For now, this bill raises a lot of questions and doesn’t provide nearly enough questions. Rest assured it is only a matter of time until we see similar regulatory measures all over the world, though.
One thing is rather evident: hiding one’s cryptocurrency balances may become an offense in the US pretty soon. Assuming this bill is passed, it would not be unlikely that more people would flock to altcoins which offer sufficient privacy. Any coin that can hide transactions or perhaps even wallet address balances will suddenly become of great interest to a lot of cryptocurrency enthusiasts. For now, we will have to wait and see if this bill becomes law or not. Its passage would be very worrisome indeed.