Bitcoin is barely regulated — and these congressmen want to keep it that way

By Rebecca Robbins July 30 at 1:57 PM

Many technophilesand libertarians already love Bitcoin. If three bitcoin-friendly congressmen have their way, federal lawmakers could, too.

Bitcoin industry representatives descended on Capitol Hill on July 29 to trumpet the cryptocurrency to any staffers who would listen.

Not many, though, were listening. Although a morning briefing on the issue drew several dozen Hill staffers, attendance was sparse at an educational evening tabling event.

Conversation at the evening event buzzed for a few minutes when the three congressmen hosting Bitcoin Demo Day stopped by to shake hands and pick up fliers. But for much of the event, bitcoin start-up vendors and entrepreneurs outnumbered their intended audience: curious Hill staffers. As the event wounddown in its final half-hour, many of the vendors free slap-on bracelets, stickersandkeychains were left untaken.

Still, low turnoutdidnt quell the upbeat sentiment of the day. While the events were billed as strictly educational, their agenda was clear: to encourage legislators to continue their laissez-faire approach to regulating the virtual currency.

Its a good thing we haven't seen Washington standing in the way of digital currencies, and we need to raise the awareness level here so that we dont pass any well-intended laws that impede the tremendous benefits that [the currencies can bring], Rep. Jared Polis (D-Colo.) said in an interview at the evening tabling event.

It was a scene that would have been difficult to imagine just five months ago, when the Tokyo-based Mt. Gox, once the worlds largest bitcoin exchange, filed for bankruptcy and said hackers had stolen bitcoins valued at $460 million, leaving users with little recourse. That disaster came on the heels of several arrests of high-profile members of the Bitcoin community on money-laundering charges.

The scandals prompted calls for greater regulation of and even a ban on a decentralized virtual currency designed to keep the governments hands out of financial transactions. The Bitcoin network allows users to make transactions using pseudonyms, allowing for anonymity not possible with traditionalcashlessexchanges.

But the resulting regulation was minimal. The Internal Revenue Service said in March that it regards bitcoins as a form of taxable property, not a government-backed currency, a ruling that was greeted with mixed reactions from the currencys backers. Congress continued a series of optimistic hearings on Bitcoin, and in May, the Federal Election Commission okayed the donation of bitcoins to political committees.

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Bitcoin is barely regulated — and these congressmen want to keep it that way