In the latest bit of bad news for the Bitcoin community, Senator Joe Manchin, a Democrat from West Virginia, has urged Congress to impose a ban on cryptocurrencies, citing its instability, difficulty to regulate, and use for criminal purposes.
Manchin made this request in a letter sent to financial regulators, including the U.S. Treasury and Federal Reserve, which was first obtained by Business Insider. In the letter, Senator Manchin claims the technology has been "disruptive to our economy," obviously alluding to the recent demise of the Bitcoin exchange service Mt.Gox, which has cost Bitcoin users an estimated sum of $350 million. Mt.Gox is even under investigation by the FBI for criminal violations relating to the service's closure, according to a Bloomberg report.
Since the letter has reached the public, Manchin has received heavy criticism from tech media outlets and the always-outspoken Bitcoin community alike. Reddit's r/Bitcoin subreddit has seen a flurry of vitriol and NSFW language in response, as was fully expected. Techdirt called Senator Manchin "technologically clueless" in a headline for an article about his efforts. Even the International Business Times made an important distinction in the aftermath of the Mt.Gox disaster that Manchin appears to have overlooked:
"[I]t is important to note that other exchanges like Bitstamp, Kraken and BTC-e have maintained security throughout the saga."
That kind of hits the nail on the head for this issue. In calling for a Bitcoin ban - which Manchin staffers say the Senator intends to do even though he used the term "regulate" in his letter, according to the Daily Dot - instead of more research into the security and reliability in the services that facilitate its exchange, Manchin reveals his ignorance on the subject. Banning Bitcoin in response to the Mt.Gox issue is tantamount to outlawing the U.S. dollar after the collapse of Lehman Brothers.
I'd like to say it's surprising that a member of Congress would make public statements about a technology that he or she knows nothing about, but I'm not. This is just another reason the political world needs more geeks.