The Bitcoin Foundation asked lawmakers to investigate the US Department of Justice's pursuit of merchants and vendors on the grounds they are selling Bitcoin (Bitcoin) as “illegal money transmitters,” Bitcoin.Com reports.
In a letter to the US Senate Judiciary Committee, Llew Claasen, the foundation's executive director, contends that Bitcoin isn't really money, at least in the sense contemplated by the bill, and thus should not be treated as such.
"Bitcoin lacks the characteristic of monetary instruments or financial products which S 1241's Section 13 attempts to regulate," he wrote.
That portion of the law proposed in May would extend record keeping requirements, used to track money laundering, to "digital currencies.”
The Bitcoin Foundation also took issue with the fact government believes terrorism is being financed by cryptocurrency.
"Contrary to this assertion, there is little to no systemic evidence that terrorist organizations use virtual currencies. In fact, the use of cash or other assets, such as art trafficking, represents a much greater risk for the law enforcement community,” Llew Claasen added.
He points out that US rules would not prevent terrorists from using financial platforms based outside the country. And he argues that digital currencies make a poor choice for criminal activity because "blockchain leaves a digital footprint that investigators can follow."