LOOKS like Bitcoin has got too big to ignore. Virtual currencies are to be regulated by the US Treasury after the Financial Crimes Enforcement Network (FinCEN) moved to clarify their status under anti-money-laundering laws.
The move comes as Bitcoins doubled in value in just a few weeks to hit a record high of more than $70 each, possibly fuelled by the banking crisis in Cyprus and the rest of Europe.
Bitcoin is run on a decentralised network controlled by its users, making it difficult to regulate transactions within the currency. However, exchanges that swap Bitcoins for real-world currencies, such as MtGox, are another matter.
FinCEN##Q##s new guidelines don##Q##t mention Bitcoin by name, but say that anyone involved in exchanges of decentralised virtual currency for real currency must register as a money services business and obey existing regulations. The same applies for centralised virtual currencies, such as Facebook credits.
But in a peer-to-peer currency it is not so obvious what counts as an exchange. Bitcoin “miners”, who run software to create Bitcoins, might also have to register if they sell the newly minted currency for its real equivalent. Patrick Murck of the advocacy group Bitcoin Foundation called the guidelines “infeasible for many, if not most, members of the Bitcoin community to comply with”.
A multinational security firm has secretly developed software capable of tracking people’s movements and predicting future behavior by mining data from social networking websites.
A video obtained by the Guardian reveals how an “extreme-scale analytics” system created by Raytheon, the world’s fifth largest defence contractor, can gather vast amounts of information about people from websites including Facebook, Twitter and Foursquare.
Raytheon says it has not sold the software — named Riot, or Rapid Information Overlay Technology — to any clients.
But the Massachusetts-based company has acknowledged the technology was shared with US government and industry as part of a joint research and development effort, in 2010, to help build a national security system capable of analyzing “trillions of entities” from cyberspace.
A new intelligence assessment has concluded that the United States is the target of a massive, sustained cyber-espionage campaign that is threatening the country’s economic competitiveness, according to individuals familiar with the report.
The National Intelligence Estimate identifies China as the country most aggressively seeking to penetrate the computer systems of American businesses and institutions to gain access to data that could be used for economic gain.
The report, which represents the consensus view of the U.S. intelligence community, describes a wide range of sectors that have been the focus of hacking over the past five years, including energy, finance, information technology, aerospace and automotives, according to the individuals familiar with the report, who spoke on the condition of anonymity about the classified document. The assessment does not quantify the financial impact of the espionage, but outside experts have estimated it in the tens of billions of dollars.
Cyber-espionage, which was once viewed as a concern mainly by U.S. intelligence and the military, is increasingly seen as a direct threat to the nation’s economic interests.
The U.S. Congress has ground into a perpetual state of deadlock, producing a legislative branch that has been one of the mostunproductive in history. But there are still a few things Congresspeople from both parties can agree on: the governments of the world really shouldn’t be regulating the Internet.
That sentiment was expressed in a December resolution that called for a key UN body, the International Telecommunications Union (ITU) to halt any move to assert authority over the Internet. And it was reinforced, when Rep. Greg Walden (R-OR) proposed legislation that would make it official US policy to promote “Internet freedom.”
Google executive chairman Eric Schmidt has predicted that China’s relentless culture of hacking and cyber espionage will put the US at a huge disadvantage and lead to a two-tier internet system. The option open to the US in the face of this future? Form closer alliances between the technology industry and the government.