Virtual Currencies; Bitcoin & What Now after Liberty Reserve, Silk Road, and Mt. Gox?

Lawrence J. Trautman

American University; George Washington University; Oklahoma City University - School of Law

March 11, 2014

Richmond Journal of Law and Technology, Vol. 20, No. 4, 2014

During 2013, the U.S. Treasury Department evoked the first use of the 2001 Patriot Act to exclude virtual currency provider Liberty Reserve from the U.S. financial system. This article will discuss: the regulation of virtual currencies; cybercrimes and payment systems; darknets, Tor and the “deep web”; Bitcoin; Liberty Reserve; Silk Road and Mt. Gox. Virtual currencies have quickly become a reality, gaining significant traction in a very short period of time, and are evolving rapidly. Virtual currencies present particularly difficult law enforcement challenges because of their: ability to transcend national borders in the fraction of a second; unique jurisdictional issues; and anonymity due to encryption. Due primarily to their anonymous characteristic, virtual currencies have been linked to numerous types of crimes, including facilitating marketplaces for: assassins; attacks on businesses; child exploitation (including pornography); corporate espionage; counterfeit currencies; drugs; fake IDs and passports; high yield investment schemes (Ponzi schemes and other financial frauds); sexual exploitation; stolen credit cards and credit card numbers; and weapons. Innovation in the pace of development of new currencies and technologies continue to create ongoing challenges for responsible users of technology and regulators alike. While technological advances create great opportunities to improve the health, living conditions, and general wellbeing of mankind; new technologies also create great challenges for nation states.

Number of Pages in PDF File: 108

Keywords: Bitcoin, child abuse, commercial law, computer crime, consumer protection, crypto-currency, cybercrime, e-commerce, electronic payments, internet payment, law and technology, Liberty Reserve, mobile wallet, money transmitter laws, payment systems, PayPal, Silk Road, Tor, virtual currencies

JEL Classification: A10, B25, C99, D12, D23, D44, D63, D71, E40, G21, H26, K11, K14, K34, L82, L83, L86, M30, O34, P50

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Date posted: February 11, 2014 ; Last revised: September 19, 2014

Suggested Citation

Trautman, Lawrence J., Virtual Currencies; Bitcoin & What Now after Liberty Reserve, Silk Road, and Mt. Gox? (March 11, 2014). Richmond Journal of Law and Technology, Vol. 20, No. 4, 2014. Available at SSRN: http://ssrn.com/abstract=2393537 or http://dx.doi.org/10.2139/ssrn.2393537

Contact Information

Lawrence J. Trautman (Contact Author)
American University ( email )
4400 Massachusetts Ave, NW
Washington, DC 20016
United States
George Washington University ( email )
2121 I Street NW
Washington, DC 20052
United States
Oklahoma City University - School of Law ( email )
2501 N. Blackwelder
Oklahoma City, OK 73106
United States
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