WASHINGTON — On the heels of NCUA conserving a credit union that was embroiled in a bitcoin laundering scheme, cryptocurrency companies and trade groups are teaming up to create a forum to aid law enforcement in weeding out criminal activity, a move designed to help bring virtual currencies into the mainstream.
The Digital Chamber of Commerce and Coin Center, two virtual currency advocacy groups, announced Thursday the formation of the Blockchain Alliance which will partner with other digital currency and blockchain companies to help address public safety concerns by using their collective knowledge to aid law enforcement.
Bitcoin and blockchain technologies have received praise for being innovative but they have also received notoriety for being used by criminals who take advantage of the potential anonymity the technology offers to trade illegal goods and services. Indeed, if credit unions were skittish about cryptocurrency before, they may well be all the more so after tiny Helping Other People Excel FCU made headlines for having allegedly been taken over by two board members for the purpose of forwarding a bitcoin money laundering operation.
"It's no secret that Bitcoin has perception issues, which is a roadblock to mainstream adoption," Perianne Boring, president of the Digital Chamber of Commerce said in statement. "Having an open dialogue with law enforcement and policymakers will help reduce anxiety about this transformative technology."
The forum plans on being in regular communication with law enforcement and is already engaged with the Department of Justice, Federal Bureau of Investigations, Commodity Futures Trading Commission, U.S. Secret Service, and Immigration and Customs Enforcement Homeland Security Investigations and plans to reach out to more U.S. and foreign agencies.
Jason Weinstein, a partner at Steptoe & Johnson LLP, who will serve as counsel for the forum said, "By helping law enforcement agencies address public safety concerns about Bitcoin and other digital currencies, we can foster an environment in which the full potential of the blockchain can be realized." Industry participants who are already signed up to participate in the forum include: the Bitcoin Foundation's Gavin Andresen, Brian Forde from MIT's Digital Media Lab, Nicolas Christin from Carnegie Mellon University, BitFinex, BitFury, BitGo, Bitnet, BitPay, BitStamp, Blockchain, Circle, CoinBase, CoinX, ItBit, Kraken, Noble Markets, and Xapo.
Jerry Brito, executive director of Coin Center, said the forum will look to expand its network. "We look forward to partnering with the other participating companies and organizations to ensure that the capacity of Bitcoin and the blockchain to benefit so many is not overshadowed by the potential for misuse by a few."
