US regulators, Bitcoin group to discuss digital currency

WASHINGTON (REUTERS) - US regulators and law enforcement agencies are expected to meet on Monday with an advocacy group for Bitcoin, a digital currency that has been under fire for its purported role in facilitating anonymous money transfers and supporting online purchases of illegal street drugs.

The meeting in Washington was arranged by the Treasury Department's anti-money laundering unit at the request of the Bitcoin Foundation, an advocacy group of Bitcoin-related businesses. It will be an opportunity for wide-ranging discussions about the digital currency, a Treasury official said.

Bitcoins, which have been around since 2008, first came under scrutiny by law enforcement officials in mid-2011 after media reports surfaced linking the digital currency to the Silk Road online marketplace where marijuana, heroin, LSD and other illicit drugs are sold. In recent months, the US government has taken steps to rein-in the currency and more regulatory action is expected.

Tokyo-based Mt Gox, the world's largest exchanger of US dollars with Bitcoins, had two accounts held by its US subsidiary seized this year by agents from the Department of Homeland Security on the grounds that it was operating a money transmitting business without a licence.

The Federal Bureau of Investigation reported last year that Bitcoin was used by criminals to move money around the world, and the US Treasury said in March that digital currency firms are money transmitters and must comply with rules that combat money laundering.

The Senate Committee on Homeland Security and Government Affairs launched an inquiry into Bitcoin and other virtual currencies earlier this month, asking a range of regulators to list what safeguards are in place to prevent criminal activity.

Join ST's Telegram channel and get the latest breaking news delivered to you.