Bitcoin and modern alchemy: in code we trust

Jeffrey Simser

Journal of Financial Crime, 2015, vol. 22, issue 2, 156-169

Abstract: Purpose - – This paper aims to explore the challenge posed by Bitcoin to regulators, particularly anti-money laundering regulators. Bitcoin is a crypto-currency based on open-source software and protocols that operates in peer-to-peer networks as a private irreversible payment mechanism. The protocol allows cross-border payments, for large and small items, with little or no transactional costs. Design/methodology/approach - – Case studies and case law are examined as are relevant reports by regulators. Findings - – Bitcoin is based on complex computer code supported by a robust community in a peer-to-peer network. Unlike other virtual currencies, Bitcoin appears to have obtained purchase and as such poses unique challenges to regulators. Research limitations/implications - – Bitcoin is at a nascent stage and the evolution of the virtual currency is difficult to predict. Practical implications - – Those who study financial systems, anti-money laundering regimes and asset forfeiture laws will have an interest in this topic. Originality/value - – This is a new and emerging currency; there is limited literature on the implications of this currency to anti-money laundering systems.

Keywords: Bitcoin; Money laundering; Virtual currency; Asset forfeiture (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-11-2013-0067

DOI: 10.1108/JFC-11-2013-0067

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