Jun 24, 2013

Can Bitcoin survive cease and desist demands from states (California and Illinois so far)?

Bitcoin has received a lot of attention from both the Federal and state governments recently, and I know of at least two, CA and IL, that have taken administrative actions questioning the legality of Bitcoin transactions with (claimed) proper financial licenses. Will Bitcoin continue as a viable form of alternative currency in light of these legal pressures?


I suspect that things are just beginning to heat up with BitCoin. We'll have to wait and see what happens as governments zero in on it, and seek to regulate or control it.


Lots of things are illegal in some states and not in others, but if you were picking states that could have an impact on an online business, Illinois and California would be two of the major ones. However, I looked at the California demand, and it should be noted that it was sent to the Bitcoin foundation. That ignores the fact the the foundation doesn’t run the exchanges, so it really doesn’t affect actual transactions in Bitcoins. However, I anticipate more governmental efforts at state and federal levels  to regulate or litigate bitcoin out of existence. One thing that governments take very seriously is the power to tax and regulate commerce, and they guard that power jealously.   

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