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Bitcoin Government The Almighty Buck United States

Treasury Nominee Yellen Is Looking To Curtail Use of Cryptocurrency (arstechnica.com) 267

An anonymous reader quotes a report from Ars Technica: Cryptocurrencies could come under renewed regulatory scrutiny over the next four years if Janet Yellen, Joe Biden's pick to lead the Treasury Department, gets her way. During Yellen's Tuesday confirmation hearing before the Senate Finance Committee, Sen. Maggie Hassan (D-N.H.) asked Yellen about the use of cryptocurrency by terrorists and other criminals. "Cryptocurrencies are a particular concern," Yellen responded. "I think many are used -- at least in a transactions sense -- mainly for illicit financing." She said she wanted to "examine ways in which we can curtail their use and make sure that [money laundering] doesn't occur through those channels."
UPDATE: Yellen's written remarks the next day also suggest America "consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system."

But they still also add that "At the same time, we know they can be used to finance terrorism, facilitate money laundering, and support malign activities that threaten U.S. national security interests and the integrity of the U.S. and international financial systems."
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Treasury Nominee Yellen Is Looking To Curtail Use of Cryptocurrency

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  • Yep (Score:2, Funny)

    by PPH ( 736903 )

    This administration is going full law and order. Better hide that weed (still a federal offense) and get a haircut.

    • Re: Yep (Score:4, Informative)

      by memory_register ( 6248354 ) on Thursday January 21, 2021 @12:03AM (#60972096)
      Cannot say I am surprised. Biden and Harris both made their political bones as Tough On Crime (TM) politicians.
      • Re: (Score:2, Interesting)

        Cannot say I am surprised. Biden and Harris both made their political bones as Tough On Crime (TM) politicians.

        He will be put into line shortly. While they are "tough on crime" they are also great lovers of regime change. The primary finance channels for our regime change operations at present are via Bitcoin.

        Due to the global nature of cryptocurrencies, you cannot curtail their domestic use and the same time continue to ship 0.5M+ a year into Navalny's personal kitty on which he does not pay any taxes while pretending that he is tough on corruption and money laundering.

        • by jbengt ( 874751 )

          Due to the global nature of cryptocurrencies, you cannot curtail their domestic use and the same time continue to ship 0.5M+ a year into Navalny's personal kitty on which he does not pay any taxes while pretending that he is tough on corruption and money laundering.

          Found the Russian troll.

    • by AmiMoJo ( 196126 )

      I'm so tired of this kind of reductive crap.

  • Of course... (Score:5, Insightful)

    by Anonymous Coward on Wednesday January 20, 2021 @10:35PM (#60971904)

    Everything within the state, nothing outside the state, nothing against the state.

  • by RightwingNutjob ( 1302813 ) on Wednesday January 20, 2021 @10:38PM (#60971908)

    I find it funny how a story about a career central banker wanting to rein in a mechanism of bypassing central bankers is in any way noteworthy. Of course she does. I happen to agree with her mostly, but again...what'd y'all expect out of her? Ron Paul?

    • I find it funny how a story about a career central banker wanting to rein in a mechanism of bypassing central bankers is in any way noteworthy. Of course she does. I happen to agree with her mostly, but again...what'd y'all expect out of her? Ron Paul?

      The newsworthy part is now that she is head of the Treasury Department she will have a lot of power to do something about US citizen's ability to use cryptos. The rest of the world will carry on as usual.

      • by ranton ( 36917 ) on Thursday January 21, 2021 @12:16AM (#60972126)

        The newsworthy part is now that she is head of the Treasury Department she will have a lot of power to do something about US citizen's ability to use cryptos. The rest of the world will carry on as usual.

        That is pretty naive to think financial policies enacted by the largest economy in the world won't affect people outside of the US. It would be like thinking no one outside of Europe has had to consider how GDPR affects their company.

        • Sorry to burst your bubble, but the US is no longer the largest economy in the world, China overtook it back in October.
          • By what measure? The GDP of the US is ~$6trn [wikipedia.org] higher than China's.
          • by gtall ( 79522 )

            Yes, but no country in their right mind would use the Chinese currency as reserve currency, not while it is the plaything of the CCP.

      • by Powercntrl ( 458442 ) on Thursday January 21, 2021 @12:40AM (#60972176) Homepage

        The newsworthy part is now that she is head of the Treasury Department she will have a lot of power to do something about US citizen's ability to use cryptos.

        Who the hell actually uses cryptocurrency for legitimate transactions? I bought some things through eBay over the weekend, used PayPal for that. Bought lunch at Zaxby's, put it on my credit card (earned 2% cash back, go me). Did some shopping at Target, used their store-issued debit card to save 5% (woo hoo). Found an album I've been wanting on Discogs, used PayPal. Later this month I'll make my car payment by electronic debit from my checking account, and I'll pay next month's rent using an old fashioned hand-written check (because they're still behind the times with all this newfangled electronic payment stuff). If so-and-so "banned" crypto, I'd.. uh.. not really even notice.

        Cryptocurrency exists so people can play a fantasy stock market game with real money, and for clandestine transactions that traditional payment processors want no part of. Most folks who aren't into either of those things simply can't fathom a use for it.

        • by niftydude ( 1745144 ) on Thursday January 21, 2021 @01:33AM (#60972330)

          Who the hell actually uses cryptocurrency for legitimate transactions?

          Microsoft accepts BTC, so does Newegg, Starbucks, Whole foods and a bunch of others. I have no idea how many people actually use it for things like that, but if it is used for money-laundering like we all believe, it has to be used to buy real products at some point.

          • by Powercntrl ( 458442 ) on Thursday January 21, 2021 @01:53AM (#60972370) Homepage

            Unless you're being paid in BTC, there's not much utility in being able to spend it at legitimate merchants. Buying that cup of coffee would require going on Coinbase (or whatever they're calling themselves this week), turning my real money into BTC (and getting hit up with an exchange fee for my trouble), then paying Starbucks the result of the current BTC-to-USD-plus-transaction-fee that their payment processor spits out. ..or I could use my credit card and get 2% cash back. *shrug*

            I think most of the ransomware/money laundering/drug dealing folks are simply cashing out their earnings on exchanges. Can't imagine there's many of them going "Gee, meth sales have been great this week, I think I'll go get a coffee."

            • by perpenso ( 1613749 ) on Thursday January 21, 2021 @04:27AM (#60972600)
              Its worse than that. Buy a cup of coffee with BTC and you have to note the price you acquired those coins at, the price at the time of the transaction, and calculate a capital gain/loss to report on your taxes. In the US and various other jurisdictions BTC is an asset, hence the capital gain/loss when the asset is traded (for the cup of coffee asset).

              Of course wallet software could automate that calculation but they don't at the moment.
        • The only difference is that the dollar is artificially stabilized by the government.

          Otherwise it would be just as unstable as Bitcoin.

      • The newsworthy part is now that she is head of the Treasury Department she will have a lot of power to do something about US citizen's ability to use cryptos. The rest of the world will carry on as usual.

        Not quite, the rest of the world will carry on as the Chinese government permits. Well, for bitcoin at least, where 70% of the miners are located in China and dependent upon cheap electricity from the government. Basically bitcoin's security model was voluntarily discarded by the community. The adoption of exotic ASIC hardware centralized mining, maintaining the blockchain, and made a government backed 51% attack possible. Lets say reversing transactions the government disapproved of.

        Now I admit the Chin

        • What security model are you speaking of exactly?

          As far as I can tell, the 51% attack is a inherent fundamental flaw.

          (Serious question.)

          • What security model are you speaking of exactly? As far as I can tell, the 51% attack is a inherent fundamental flaw. (Serious question.)

            According to the design a 51% attack cannot be performed because the mining community is decentralized both in terms of the people involved and geographically. This all assumed that people would only need their regular computers to engage in "mining", which also maintains the blockchain. A bad player that is an individual could not establish a cartel large enough, a bad player that is a government could not find enough miners in their jurisdiction. We have broken both of these decentralization assumptions.

    • I find it funny how a story about a career central banker wanting to rein in a mechanism of bypassing central bankers is in any way noteworthy.

      She's concerned about "illicit financing" and "money laundering". That is taken care of by requiring US citizens to use a US-based exchange that confirms the identity of users. That will also make the IRS happy.

      So she is not going to shut down crypto, she's probably going to go after anonymity.

    • Well put really.

    • Her statement is not as a central banker, but as a tax collector (treasury department). She shouldn't care less if you use bitcoin, but in the position she is going for this time she will care that you don't use bitcoin to avoid taxes. Read her response.

    • I find it odd that terrorism is the reason to want to ban crypto. Not the fact that crypto currency consumes mode electricity in one day than a third world nation consumes in an entire year. These miners burn electricity where the cost of power is cheapest (coal) in order to turn a profit. Nobody is mining at the most expensive renewable rates on the planet. That is a serious carbon footprint problem for an administration wanting to combat climate change.

    • by jbengt ( 874751 )
      I find it funny that a story about whether the new administration will overturn the old administration's policies for reporting large bitcoin transaction becomes a story about how the new administration is "going full law and order":

      In December, Trump's outgoing team at the Financial Crimes Enforcement Network—a unit of the Treasury Department focused on money laundering—proposed a new set of rules to tighten the screws on cryptocurrency-based money laundering.

      Under the new rules, cryptocurrency-based exchanges would need to file transaction reports with FinCEN any time a customer made a cryptocurrency transaction worth more than $10,000. This would mirror existing rules requiring conventional banks to report when customers make cash withdrawals or deposits worth more than $10,000.

      Even more controversial in the cryptocurrency world, FinCEN wants to impose new record-keeping requirements for transactions involving users who manage their own private keys—dubbed "unhosted wallets" by FinCEN. Under FinCEN's proposal, if a cryptocurrency exchange's customer sends more than $3,000 to an unhosted wallet, the exchange would be required to keep a record of the transaction, including the identity of the customer who initiated the payment.

      These new rules didn't take effect before Trump left office, so the incoming Biden team will need to decide what to do with them. The Biden administration could sign off on the existing rules, rewrite them, or scrap them altogether. Yellen's Tuesday comments suggest that she is unlikely to scrap the rules.

  • by sinij ( 911942 ) on Wednesday January 20, 2021 @10:42PM (#60971914)
    Printing money is a huge business, 18.7 trillion in 2020 and about 30% increase. So obviously they are after cryptocurrencies - no competition is allowed.
    • Yeah, and the magical value fluctuations of cryptocurrency come from where?
    • It's not actually printed.It's more editing a number in an excel sheet.

  • Now it's bitcoin (Score:3, Informative)

    by fustakrakich ( 1673220 ) on Wednesday January 20, 2021 @10:46PM (#60971926) Journal

    Next week it's bittorrent

    The following week it's Tor

    And then it will be anything that's encrypted

    • The following week it's Tor

      Please, the biggest sponsor of Tor is *checks notes* the US Navy

    • Extrapolating from 1 again.

      We've been over this nonsense. The Daily Show even did a whole episode on it, parodying that Fox News joke who cried on national television because "Tuh progressives are out to get us!".

  • by Sebby ( 238625 ) on Wednesday January 20, 2021 @11:06PM (#60971970)

    Here's an excellent Twitter thread [twitter.com] by Stephen Diehl (@smdiehl) about what Bitcoin really is (with an earlier one further down below).

    *** TRIGGER WARNING The Bitcoin boosters might want to overt their eyes! ***

    Let's discuss the environmental cost of bitcoin. Because despite all the push for sustainable and green investment in the tech sector, there's a giant smoldering Chernobyl sitting at the heart of Silicon Valley which a lot of investors would prefer you remain quiet about. Thread (1/)

    TLDR on bitcoin economics: It's a pyramid-shaped investment scheme backed by the collective delusion that value can created out of nothing by convincing greater fools to buy it after you do. [references earlier thread, also down below] (2/)

    That alone is sufficiently awful on its own merits, but on top of this the environmental damages of bitcoin are enough to make even Greta Thunberg weep at the pointless waste of it all. (3/)

    The underlying technology of bitcoin is based on the notion of "mining", a technical term for a process that keeps the network running and processing transactions. (4/)

    I won't cover the details of the algorithm, suffice it to say the premise of bitcoin mining is to prove how much power you can waste, and the more power you can waste, the more tokens you can probabilistically secure in exchange for your energy waste. (5/)

    And so people have set up entire warehouses of computer hardware dedicated to run 24/7 consuming power and performing the trial computations required by the protocol. Globally this consumes *nation state* levels of energy to keep it all running. (6/)

    Bitcoin mining is essentially a fucked up version of Candy Crush where you solve puzzles for coins, except the coins go to buy darknet fentanyl, launder money for warlords and provide gambling for hedge fund managers. (7/)

    And the scale of this waste has some scary numbers attached to it. A single bitcoin transaction alone consumes 621 KWh, or half a million times more energy consumption than a credit card payment. (8/)

    The bitcoin network annually wastes 78 TWh (terrawatt hours) annually or the energy consumption of several *million* US households. WolframAlpha gives some scary comparisons to help you relate to how much energy this is (think nuclear weapons). https://www.wolframalpha.com/input/?i=77.78+terrawatt+hours [wolframalpha.com](9/)

    Unlike other economic activities, the bitcoin scheme produces absolutely nothing for all this waste. It is a pure speculative activity of people gambling on the random movements of prices and the only output is simply shuffling numbers around in a computer at insane cost. (10/)

    In addition to the energy waste and CO2 emitted, the mining process itself requires constant replacement of hardware and produces a steady stream of waste from broken and exhausted computer parts. All of which are full of toxins and rare earth metals. (11/)

    The network produces 11.27 kilotons of waste annually or 96 grams of electronic waste per transaction. This is the equivalent annual e-waste as several small countries and equivalent to the waste of 482,456 people living at the German standard. (12/)

    Try to imagine a future where paying for your morning coffee involved smashing an iPhone and burning enough fossil fuels to run your entire household for 60 days. That's the environmental cost of the "revolutionary" technology behind #Bitcoin in a nutshell. (13/)

    Climate scientists have estimated that #Bitcoin emissions alone could push global warming above 2C. And this is just one of *hundreds* of other cryptocurrency networks that run on this apocalyptically wasteful set of ideas. (14/) https://www.nature.com/articles/s41558-018-0321-8 [nature.com]

    Climate change is not some abstract threat happening elsewhere, it is very real, an

  • we're good.

    Of course, the US Government would never try to enforce US law all around the world, now, would they? Like, that's never happened, right? Cause it would be a dick move. LOL.
  • Money is moving (Score:5, Insightful)

    by ArchieBunker ( 132337 ) on Wednesday January 20, 2021 @11:25PM (#60972028)

    And we can't take our cut. Kill it.

    • by tlhIngan ( 30335 )

      And we can't take our cut. Kill it.

      Sure they can. Why do you think there's a sudden uptick in financial institutions doing bitcoin stuff? Hell, even Paypal does it.

      What happens is most of the transactions take place off ledger. I wouldn't be surprised if there's a bitcoin trading network among financial institutions that does everything off ledger. Sure you can transact with anyone, but if they're on the network, then things can happen cheaper and quicker as it takes place instantly off ledger instead of ha

    • Comment removed based on user account deletion
  • by hyades1 ( 1149581 ) <hyades1@hotmail.com> on Wednesday January 20, 2021 @11:28PM (#60972030)

    The most powerful financial criminals, as usual, will escape unscathed. Despite profiting from driving the entire world into economic chaos on multiple occasions, is there a single instance outside of Iceland where a banker has gone to prison?

    Cryptocurrency might be the "wild west", but at least it offers some slight hope to those who want no part of the unholy corporate-government alliance that is international finance.

  • Other than paying ransom/extortion to threat actors, I am hard pressed to think of why I would want to be involved much less invested in cryptocurrencies as they currently exist.

    And in the long run, doing away method of paying international threat actors is better for all of us anyway.

  • It is really amazing how painful banking has become thanks to concerns about money laundering. The whole “know your customer” thing can really be a challenge. I have a charitable nonprofit that cannot get a bank account for the life of me. In year 3-5 it might be easier, but not if I have to keep using my personal credit card for all transactions. All the funds are in a brokerage account it took me 8 months to open, but they won’t let me do a checking account with them (despite having a

  • âoeWhen I am weaker than you, I ask you for Freedom because that is according to your principles; when I am stronger than you, I take away your Freedom because that is according to my principles.â - Frank Herbert, Children of Dune
  • ... if, now and then, the government would at least *pretend* to oppose cryptocurrency because it's a high-tech version of Dutch tulips, rather than just the prospect that people might do something they can't meticulously trace.
  • by MpVpRb ( 1423381 ) on Thursday January 21, 2021 @01:18AM (#60972276)

    Gigawatts of power wasted

  • I expect nothing less from a Biden administration. Freedom will always be sacrificed at the alter of 'safety' and 'security'.

    Meanwhile, the banks will continue to print out money by the lorryload, devaluing the dollar to tempt the demon of hyperinflation, and hardly anyone will even care.
  • The use of many different currencies instead of one, especially one which has existed for a long time and which is the far more commonly used currency, can be a problem for consumers. Latest when some goods can no longer be paid in dollars, but a crypto currency is required, will it become a burden to consumers. While free markets are important for progress should the freedom not get watered down by too many new currencies where every corporation ends up having their own trademark crypto currency. It can on

  • It is sad that they went for "terrorists" again, to not displease the financial crooks.
    Because its uncontrolled instability, and gamblers abusing that, is the problem.

    If I were the government, I'd do exactly the same thing to Bitcoin that they already do to other fiat currencies: Stabilize it. If it can be done to the Dollar, then it should be easier, to do it to Bitcoin, due to being able to trace every move by default. Then it would be perfectly usable. Even if with less privacy than physical cash.

    Well, a

  • In bitcoin, which is of course very traceable, they used to do money laundering via tumblers. The idea is that everyone sends money to one guy, and he sends out the same amount (minus his fee) to another account controlled by the submitter, taken randomly from the money sent in. It works great in one sense. But it has some weaknesses:

    1. The guys running the tumbler need to be trusted.
    2. The guys running the tumbler are doing something blatantly illegal according to US law (and most countries' laws on money

  • Real Bitcoin transaction are mostly for illegal purposes, but it looks that banks are starting to take over, which is ironic but expected.

    Several banks now allow you to have a Bitcoin account. You put dollars in, you get dollars out, you never see a Bitcoin address, you can't actually put Bitcoin in or pay in Bitcoin. The only thing is that the value fluctuates with the price of Bitcoin, and (for now) the bank is supposed to hold at least as many Bitcoins as there are in all accounts. If we start to introdu

  • Cryptocurrency is looking to curtail use of Treasury nominee Yellen.
  • Squishing made-up Internet money that does easy end-runs around terror/crime finance laws etc. like a particularly creepy bug was the norm from the genesis of the Internet until the invention of Bitcoin when the regulators seemed to be asleep at the switch. This is a welcome return to rational normalcy.

    Ending cryptocurrencies is even a good idea from an environmental standpoint alone, if there were videogames that required this kind of processing power we would shut them down for environmental reasons.

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