The topic of Bitcoin was a recurring subject on day one of the Money2020 conference in Las Vegas. However, the FBI's action against alleged Silk Road mastermind, Ross Ulbricht, caused disruption as planned speakers from government organisations and law enforcement found reasons to stay at their desks.
In their absence, the debate around digital currencies and alternative payment systems continued between proponents of Bitcoin and former law enforcement officials now working in the payments industry.
Chairing a panel on the evolving regulatory framework around math-based currencies, that was inevitably over-shadowed by the Silk Road charges, Carol Van Cleef, partner at law firm Patton Boggs noted that unlike previous landmark cases, such as those against E-Gold or Liberty Reserve, the authorities had not acted against the technology in this instance but against the individual.
Ulbricht is facing various criminal charges including narcotics trafficking, computer hacking and money laundering. The FBI is attempting to access 600,000 Bitcoins, worth around $80m (£49.7m), accumulated by Ulbricht, but has already seized 26,000 ($3.2m) that the site had held in escrow for its customers. This has sparked the ire of the Bitcoin community and led to a rash of complaints
by furious Bitcoin users.
Back at Money2020, panellist Constance Choi, general counsel at Payward preferred to focus on the positives: "It's a great day for Bitcoin. The price dropped but then it bounced back. It removes the red herring of Silk Road from Bitcoin."
Choi added: "It shows exactly how transparent Bitcoin can be. It's a terrible tool for criminals. Transactions can be traced back to the point Bitcoin is mined."
Patrick Murck, general counsel at the Bitcoin Foundation reflected that the Bitcoin protocol itself was not breached and that for charges to be brought demonstrated current investigative methodologies still work in a digital currency environment. The implication being that the regulators and law enforcers already have the tools they need in place.
In a subsequent session, Scott Dueweke, senior associate Booz Allen Hamilton, hastily assembled speakers from industry with prior experience of working for US law enforcement authorities within this area. In this session the threats and risks associated to alternative payment systems were given much greater airtime.
According to Dueweke, Booz Allen has identified over 300 alternative payment systems categorized within five main groups: Digital Cash providers; Internet Payment Providers; Digital Currency Exchanges; Mobile Payment Systems and Payment Cards.