23 October 2014

US senators voice fears over Bitcoin link to online drugs market

09 June 2011  |  6838 views  |  0 US Coin Cash

Peer-to-peer virtual currency Bitcoin has come under fire from US senators worried it is being used to anonymously buy illegal drugs online.

Launched in 2009, Bitcoin has received a rash of publicity in recent months for its increasingly popular virtual currency which bypasses banks and clearing houses. The coins can be generated online by people running an application called a Bitcoin Miner and are then stored in the user's digital wallet and exchanged anonymously, using an electronic signature.

Last week, the currency hit the headlines after the Gawker blog network posted a story claiming it was the only way users can buy drugs on Silk Road, an online marketplace accessible through the annonymising network Tor.

Now Democratic senators Charles Schumer of New York and Joe Manchin of West Virginia have written to Attorney General Eric Holder and Drug Enforcement Administration head Michele Leonhart expressing their worries about both the Silk Road and Bitcoin.

The senators say they "urge you to take immediate action and shut down the Silk Road network" but this would be an extremely difficult task, prompting speculation that the site's currency, Bitcoin, could be targeted instead.

DEA spokeswoman Dawn Dearden told Reuters that the agency is concerned about Bitcoin and similar digital currencies, adding: "The DEA is constantly evaluating and analysing new technologies and schemes perpetrated by drug trafficking networks."

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