July 7, 2014
Bitcoin Raid Nets French Police With $272,000 In Illegal Virtual Money
Peter Suciu for redOrbit.com - Your Universe Online
On Monday it was announced that French law enforcement have dismantled an illegal Bitcoin exchange and seized 388 virtual currency units, according to the Reuters news agency. The seized Bitcoins had a reported value of 200,000 euros, or $272,700.
This was reportedly the first such law enforcement operation conducted in Europe to investigate illegal selling of the virtual currency.
Two people in the Riviera coastal cities of Cannes and Nice were under a formal investigation that took place on Friday. They were both detained on suspicion of operating a website that illegally sold and even lent Bitcoins to users. Yahoo News reported that a home believed to belong to one of the suspects was raided, and authorities found a portfolio of Bitcoins valued at 9,000 euros each. In addition, credit cards and computer hardware was also reportedly seized as part of the investigation.
"It's the first time in Europe that a judicial action has resulted in the closure of an illegal exchange for virtual currency," Olivier Caracotch, prosecutor in the southwestern town of Foix where the investigation started, told Reuters on Monday. "It's also the first time in France that Bitcoins have been seized as part of a judicial procedure."
Reuters reported that the police in France were tipped off to the existence of the platform by a retired policeman. He had alerted financial investigators after he had purchased Bitcoins on the site. The two suspects were also reportedly being investigated on potential charges of illegal banking, money laundering and operating an illegal gambling website.
This is far from the only controversy for the virtual currency.
The MtGox Bitcoin exchange in Japan was recently liquidated, and earlier this year Russian authorities ruled that the use of the Bitcoin currency was illegal. The Russian Prosecutor General's Office released a statement in February that stated that the digital currency "cannot be used by citizens and legal entities."
In December, the value of Bitcoins plummeted dramatically on news that China would no longer accept the digital currency. In February a known Bitcoin flaw also resulted in some $2.6 million being stolen from the new Silk Road site. Approximately 4,400 Bitcoins were taken from the site's escrow account by hackers.
Yahoo News also reported that a new blog associated with the Islamic State in Iraq and Syria (ISIS) had claimed that it would use Bitcoin to further its efforts. The group, which is now engaged in a military campaign in Iraq, announced that Bitcoin would "enable jihad on a large scale" and allow the sending of "millions of dollars" to jihadists.
Yahoo News cited a blog post titled "Bitcoin and the Charity of Violent Physical Struggle," in which the author argued that such donations would even be "untrackable" by Western governments.
There is also the ongoing issue of who is actually the creator of Bitcoin – a key fact of the virtual currency that very much remains a mystery. Researchers debated this issue in April and pointed to Nick Szabo, a blogger and "alleged" former law professor at George Washington University.
Despite the controversies, however, the currency still apparently has its supporters. According to a May report, Canada lead the world in Bitcoin accessibility and security.