Kathryn Haun, Assistant Attorney for the US Department of Justice in San Francisco, admitted in an interview that cryptocurrency bitcoin could not be shut down.
Haun is also a lecturer on digital currencies at Stanford Law School, and responsible for prosecuting her own corrupt colleagues Carl Mark Force and Shaun Bridges during the Silk Road case. She admitted that in 2013, the US Government did not shut down the cryptocurrency since they “recognized you can’t shut down bitcoin.”
“There is simply no way,” – Haun said. “With these technologies, once the genie is out of the bottle you can’t put it back in…but even if we could hold the developers of these technologies accountable.” She also added that shutting down bitcoin would “counter to the legal system.”
The assistant attorney thought about changing the law so the virtual currency could be banned, however, she did not say that she or the US Government has any plans for this action. The federal prosecutor also mentioned the privacy bitcoin provides to the users, “which I like, but it is obviously the case a large percentage of criminals will use the technology. At what point you, as a developer, are comfortable with the technology being used for more harm than good?” Haun rhetorically asked.
Haun stated that bitcoin mixers and tumblers are not working as they are advertised on the dark web and sometimes they allowed investigators to “unscramble” the transactions. The federal prosecutor said that law enforcement authorities use the same methods with BTC-related crimes as in the case of “normal” financial crimes: they follow the money.
“A high-level review showed [Shaun Bridges] was liquidating hundreds of thousands of dollars’ worth of bitcoin a month,” the federal prosecutor said.
Bridges’ activity raised suspicion among authorities who then discovered the agent had contacted BTC exchanges telling them certain transactions were illegal, seizing the funds and transferring the money to his own personal account.
Haun emphasized that bitcoin is used legally by a large percent of the currency’s users, for example, lots of federal agents invest (legally) into bitcoin since they are fascinated by the cryptocurrency. According to the federal prosecutor, blockchain technology is used in many different areas, such as in record keeping, especially if it relates to official documents including birth certificates, which are often forged for identity theft.
Blockchain by not having a central control nor paper records, can “significantly reduce” interfering with and the forgery of official documents, Haun stated. She emphasized this was a serious problem in all cases she had prosecuted, there has been at least one forged document in every instance. However, when asked, the lecturer could not come up with other examples of using blockchain technology.
This lecture of the federal prosecutor could be a step towards legal bitcoin users by the government. It could create greater transparency and community engagement between the government and blockchain users.
To prevent blockchain and virtual currency related crimes, federal agencies need to seek out experts of the technology. The easiest way to do so is to engage the bitcoin user community and attract people to work with the government.