US Congress becomes a battlefield for Bitcoin

2017 became a wonderful year for Bitcoins. Bitcoin not only increased tenfold in price, but also spread more widely among ordinary people. However, lawmakers do not slumber. In addition to the planned reform of the US Tax Code, which indirectly affects Bitcoin, a bill was introduced to the US Congress, which could allegedly burden the Cryptocurrency industry with unnecessary, entangled and redundant regulatory obligations.

American enthusiasts are seriously concerned about the fact that the Congress can approve a bill that can suppress the free development of Cryptocurrency technologies. In particular, Bitcoin advocates focused on opposing the adoption of bill S.1241, which was presented in Congress under the title "The Law of 2017 on combating money laundering, financing of terrorism and counterfeiting."

Bitcoin Foundation opposes this bill, because it can provoke confusion in the crypto-currency environment. The Foundation notes: 

"For those not familiar with the Act, it seeks to define anyone issuing, redeeming, or cashing Bitcoin as a financial institution. This would require them to comply with the Bank Secrecy Act, 31 U.S.C. § 5312 and require them to adopt the same formal reporting procedures as financial institutions for the purpose of reporting suspicious transactions."

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Previously, in 2011, S.1241 was introduced, but it did not pass. Subsequently, in 2013, the Financial Crimes Enforcement Network (FinCEN) issued a guidance entitled "Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies."

Coin Center argues that the FinCEN guidance already accomplishes the policy goals of the bill's section aimed at digital currency. Therefore, Coin Center contends: 

"If the bill were to pass today, however, it would sow a lot of uncertainty since it would likely supersede the FinCEN guidance and all the work on the part of industry and Treasury to build a reasonable AML regime for the digital currencies. This is especially true because many of the key terms in the bill are not defined."

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In addition to Coin Center and the Bitcoin Foundation, the Chamber of Digital Commerce is also getting ready to defend the cryptocurrency industry in front of the U.S. Congress.

In fact, the Chamber of Digital Commerce already wrote to Congress with regard to S.1241, stating:

"The proposed amendment is unnecessary because FinCEN has already acted to include virtual currency exchangers and administrators within the coverage of the BSA [Bank Secrecy Act]."

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Moreover, many in social media are calling cryptocurrency enthusiasts to contact their senator to shut down the bill. For example, according to the website save-crypto.com, "Senator Diane Feinstein is trying to push a bill to essentially make it illegal to use cryptocurrencies." And the site asks cryptocurrency supporters to request their congressman to vote against S.1241. 

The support in opposing §1241 has been superb! We recently presented our feedback and proposed changes to §1241, an untenable and premature regulatory burden. Read our official feedback https://t.co/uQO9ucgxA9 pic.twitter.com/3aWkMFTCne

— Bitcoin Foundation (@BTCFoundation) December 6, 2017

According to the Bitcoin Foundation, "The support in opposing §1241 has been superb."

As more cryptocurrency enthusiasts learn about the potential impact that S.1241 would have on the cryptocurrency industry, support for killing or modifying the bill will most likely continue to increase.