Government shuts down Bitcoins

US government shuts down production of physical Bitcoins:

US government shuts down production of physical Bitcoins

US government shuts down production of physical Bitcoins

Back before the recent Bitcoin boom, an enthusiast named Mike Caldwell created a physical representation of the virtual currency — the Casascius coin. The difficult-to-type Casascius Bitcoin derived its name from nowhere of interest (named after Caldwell’s online handle), but the idea is certainly an interesting one. The Casascius Bitcoin is a shiny, physical coin — each one with its own Bitcoin wallet attached. The coins are a clever way to trade Bitcoins without having access to a computer (or even a wallet you know how to access), but perhaps the idea was too clever; the US Department of Treasury shut down Caldwell’s Bitcoin mint.

Just before Thanksgiving, Caldwell received a notice from the Financial Crimes Enforcement Network (FINCEN) stating that he must stop producing the coins, as the Treasury Department is classifying the action as transmitting money — something the government would not allow him to do unregulated. Interestingly, Caldwell only accepts a payment in BTC for the coins, which means he isn’t accepting “real,” regulated currency, so it’s odd that the Treasury Department would consider his actions as transmitting “money.”

Amusingly, because Caldwell runs a Bitcoin service, there isn’t an account the government can seize should he incur FINCEN’s wrath. Admittedly, FINCEN’s interest would make a little more sense if Caldwell were trading Bitcoins for cash, but he’s only trading Bitcoins for Bitcoins.

Using the current BTC exchange rate, Caldwell has minted around $82 million worth of Casascius coins — around 90,000. There are other physical Bitcoin (and even Litecoin) products, but perhaps Caldwell’s prolific production and popularity is why FINCEN took notice of his service and not others. Caldwell hasn’t agreed to completely discontinue the Casascius coin, but he obviously has some things to work through before he can begin again, government-willing.

 

Share Your Thoughts

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s