International Bankers Express Reservations Over Bitcoin
In spite of a keynote speech that highlighted the viability of Bitcoin and the need for the broader financial system to get with the program, the virtual currency got little love from the bankers, law enforcement officials and lawyers gathered in Miami to discuss some of its opportunities and challenges.
A bank representative suggested Bitcoin was a tool designed for money laundering, a comment that seemed charitable in comparison to that of a high-level FBI agent who said the "mentality" of Bitcoin enthusiasts reminded him of the fanaticism displayed by domestic terrorists.
The discussions Thursday came at the annual anti-money laundering and compliance conference held by the Florida International Banking Association, one of the largest such conferences in the world.
"I view these virtual currencies very much as a money laundering tool or a result of money laundering," Dan Panepinto, who directs the electronic crimes investigation unit at JPMorgan Chase, said during a panel on virtual currencies.
Panepinto explained more than 90 percent of the transactions JPMorgan handles related to Bitcoin are due to retail banking consumers buying or selling small amounts, and explained the bank is unwilling to do business with those with a deeper involvement in the Bitcoin ecosystem.
"If they're acting as an exchange, we won't touch them," he said.
The characterization of Bitcoin as problematic were especially stark when expressed by law enforcement officials at the FIBA conference.
Stephenie Lord, chief of the illicit finance and proceeds of crime unit at the Department of Homeland Security, talked at length about the illicit activities Bitcoin had been used for in the electronic currency's brief history.
Bitcoin, pieces of encrypted computer code that can be bought and sold online, are hailed by advocates as a revolutionary payment transfer system that's akin to nationless, fee-free electronic cash. The virtual coin has gained notoriety over the past two years, first with media reports of its widespread use for illegal online activity, then by a volatile run-up in its market value starting about 11 months ago.
Lord blames it for facilitating drug smuggling, illegal arms dealing and transnational sexual exploitation.