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Bitcoin and modern alchemy: in code we trust

Bitcoin and modern alchemy: in code we trust Purpose – This paper aims to explore the challenge posed by Bitcoin to regulators, particularly anti-money laundering regulators. Bitcoin is a crypto-currency based on open-source software and protocols that operates in peer-to-peer networks as a private irreversible payment mechanism. The protocol allows cross-border payments, for large and small items, with little or no transactional costs. Design/methodology/approach – Case studies and case law are examined as are relevant reports by regulators. Findings – Bitcoin is based on complex computer code supported by a robust community in a peer-to-peer network. Unlike other virtual currencies, Bitcoin appears to have obtained purchase and as such poses unique challenges to regulators. Research limitations/implications – Bitcoin is at a nascent stage and the evolution of the virtual currency is difficult to predict. Practical implications – Those who study financial systems, anti-money laundering regimes and asset forfeiture laws will have an interest in this topic. Originality/value – This is a new and emerging currency; there is limited literature on the implications of this currency to anti-money laundering systems. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Crime Emerald Publishing

Bitcoin and modern alchemy: in code we trust

Journal of Financial Crime , Volume 22 (2): 14 – May 5, 2015

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1359-0790
DOI
10.1108/JFC-11-2013-0067
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper aims to explore the challenge posed by Bitcoin to regulators, particularly anti-money laundering regulators. Bitcoin is a crypto-currency based on open-source software and protocols that operates in peer-to-peer networks as a private irreversible payment mechanism. The protocol allows cross-border payments, for large and small items, with little or no transactional costs. Design/methodology/approach – Case studies and case law are examined as are relevant reports by regulators. Findings – Bitcoin is based on complex computer code supported by a robust community in a peer-to-peer network. Unlike other virtual currencies, Bitcoin appears to have obtained purchase and as such poses unique challenges to regulators. Research limitations/implications – Bitcoin is at a nascent stage and the evolution of the virtual currency is difficult to predict. Practical implications – Those who study financial systems, anti-money laundering regimes and asset forfeiture laws will have an interest in this topic. Originality/value – This is a new and emerging currency; there is limited literature on the implications of this currency to anti-money laundering systems.

Journal

Journal of Financial CrimeEmerald Publishing

Published: May 5, 2015

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