Two Federal Agents Arrested on Bitcoin-related Fraud - Questions Arise

By Daniel Zo Bitcoin, Federal agents

In a previous article, we discussed how the government may use Bitcoin as a federal reserve, while also mentioning a couple of reasons why this isn’t good news for the cryptocurrency market.

While no government throughout the world has openly admitted investing in Bitcoin, we are all well aware of the fact that the U.S. government is proud to have an amazing bitcoin reserve thanks to Silk Road criminal process, when hundreds of bitcoins were seized, and are now in the hands of the treasury. However, when does the process of seizing cryptocurrencies from those who take part in illegal activities become an illicit act itself?

Well, recent reports are of great help in this issue, as it turns out that two federal agents who led the Silk Road probe decided to take some of the money that had been seized for themselves, which isn’t really surprising when thinking about how large the amount actually was and the continuous success of the cryptocurrency. The entire event is quite easy to imagine. Once the two corrupt agents saw the opportunity to grab a large amount of money for themselves, they decided to take the risk regardless of the fact that they actually spent a large amount of their time trying to shut down an illegal activity ran entirely with bitcoin, as a form of accepting and sending payments.

With this in mind, federal court documents incriminate the two federal agents, thus charging them with wire fraud, but also money laundering and a couple of other offenses. This event represents a signal of alarm for Bitcoin fans from all around the world, as the event proves the fact that officials who may seize cryptocurrencies can also be corrupt. While the two agents were a part of the Drug Enforcement Administration, also known as the DEA, the truth is that many other institutions are entitled to seize illegally made wealth, which in turn means that no one who uses the coin for illegal activities is safe, which is both good news, but also bad news.

The good news is that the user base of the cryptocurrency can be purified, whereas the security of those using the coin for legal activities can be put at risk, once federal institutions throughout the United States, but also national institutions around the world implement plans that have the possibility to grant those in charge control over the cryptocurrency, which is definitely something that is not wanted at this moment in time.

By carefully analysing all of the events, there are a couple of solutions for staying safe, but also limiting the access that others have on your trading activity. The Bitcoin Foundation should go ahead and ensure that Bitcoin as a technology is kept in its particular decentralized state, and that no one gets enough power to actually dictate what happens to the coin, as if this happen, everything that the cryptocurrency has achieved so far would be in vain.