LeapRate's Daily Forex Industry Newsletter
Join now to receive first access to our EXCLUSIVE reports and updates.
Screenshot of a breaking news alert e-mail from Q2 2017
The United States is renowned for being the most business-orientated nation on earth, an ethos which spans both public and private sectors. The recent decision by the US Marshal Office, a federal law enforcement agency which is incorporated within the US Department of Justice to engage in the sale of Bitcoins emphasizes this further, and is most certainly a controversial yet prudent move.
Whilst many less democratic governments around the world have considered virtual currencies to be a threat to the stranglehold they have over their citizens, the United States has taken a view here that Bitcoin is a viable commercial entity, even when handled by law enforcement agencies.
The new service offered by the US Marshal Office is designed to clean the Bitcoins that were originally considered illegal due to their usage to engage in activities which are against US law, having been seized by the government as a result of operations which set out to abolish illicit market places such as that of the closing down of Silk Road last year by the Federal Bureau of Investigation (FBI), and the arrest of its founder Dread Pirate Roberts.
In that particular circumstance, the FBI captured the servers from which Silk Road operated, subsequently obtaining the 30,000 Bitcoins held in the market place.
The service will fall under the category of Mixing, a term which refers to the practice of mixing one’s funds with others’, with the intention of confusing the trail back to the funds’ original source.
This methodology is used in the Bitcoin world to enhance privacy, as the Blockchain is completely transparent and traceable without extra precautions taken to hide one’s activity on the Blockchain.
When this service commences, the US Marshal Office intends to sell the Bitcoins in blocks, which will consist of 3,000 coins for 9 blocks, incorporating the remainder into the last block.
The service is not without bureaucracy however, with potential purchasers being required to issue a signed PDF of the Bidder Registration Form, a copy of a government-issued photographic identification which belongs to the bidder, and $200,000 deposit sent by wire transfer from a US bank account.
Once purchased, these Bitcoins have the advantage of being obtained from a very reputable source – the law enforcement agency itself. North American pundits expect that this procedure may be emulated by other governments in democratic nations in other parts of the world, a matter which would indeed increase the legitimacy of Bitcoin.
The modern world has become so completely different from that of just a decade ago, when fiat currency was laundered by unscrupulous fraudsters and perpetrators of organized crime. Nowadays, it is the government that is doing the laundering, in order to provide the public with a genuine potential liquid asset, as well as recouping some of the cost of policing it.