Bitcoins don't fit well into current law; some politicians want to change that.
When news of Silk Road, the secretive online marketplace that allows drugs to be purchased with bitcoins, broke last year, Sen. Charles Schumer (D-NY) was not pleased. He denounced the currency as a "an online form of money laundering." Despite the Senator's bluster, though, the Bitcoin network continues to operate a year later with no apparent legal impediments.
That's in part because nothing like Bitcoin existed when current laws were written. A wide variety of laws regulates banks, money transmitters, currencies, and securities—but none of these categories are a good fit for bitcoins. In a paper published earlier this year, Temple University law student Nikolei Kaplanov explored the legal status of the cryptocurrency. "Bitcoins and their users fall within a gray area under federal and state law due to their unique nature," Kaplanov wrote. We spoke to him to find out more.
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