Bitcoin Feared By FBI As Haven For Illicit Activity

An FBI internal report was recently leaked to the internet, raising concerns about the use of Bitcoin currency.

Bitcoin is an online currency that allows individuals to buy goods, sell goods, and exchange money anonymously.

This report, marked for Official Use Only but not marked classified, raises concerns about the fact that Bitcoin uses mainly a peer-to-peer network, with no central authority.

Financial transaction history records are not easy to obtain in those circumstances, which makes it difficult to track certain types of activity, criminal activity in particular.

Here is an excerpt from the article:

The FBI sees the anonymous Bitcoin payment network as an alarming haven for money laundering and other criminal activity — including as a tool for hackers to rip off fellow Bitcoin users.

That’s according to a new FBI internal report that leaked to the internet this week, which expresses concern about the difficulty of tracking the identify of anonymous Bitcoin users, while also unintentionally providing tips for Bitcoin users to remain more anonymous.

The report titled “Bitcoin Virtual Currency: Unique Features Present Distinct Challenges for Deterring Illicit Activity,” (.pdf) was published April 24 and is marked For Official Use Only (not actually classified), but was leaked to the internet on Wednesday.

In the document, the FBI notes that because Bitcoin combines cryptography and a peer-to-peer architecture to avoid a central authority, contrary to how digital currencies such as eGold and WebMoney operated, law enforcement agencies have more difficulty identifying suspicious users and obtaining transaction records.

You can read the full article here: FBI Fears Bitcoin’s Popularity with Criminals

Other Bitcoin stories:

Bitcoins worth $87000 plundered in brazen server breach
by Dan Goodin – May 12, 2012 1:40 am UTC More than $87000 worth of the virtual currency known as Bitcoin was stolen after online bandits penetrated servers belonging to Bitcoinica, prompting its operators to temporarily shutter the trading platform to …
arstechnica.com

What The Bitcoin Experiment Started
With these problems in the world, Bitcoin was born. It is an alternative online currency limited to preventing inflation and relying on peer-to-peer interaction. The model was safe — people formed Bitcoin IDs that could not be broken.
www.huffingtonpost.com