Bitcoin

French Authorities Seize Bitcoin Worth $272,000

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euros with a bitcoin money clip

For the first time, police in Europe dismantled a Bitcoin exchange. On Monday, French authorities seized 338 Bitcoins, worth about $272,000, from a website that had been facilitating exchanges since last November. Before being shut down, the website allowed for 2,750 transactions with about 2,500 Bitcoins. The suspects are currently being investigated for illegal banking, money laundering, and illegally operating a gambling website. Olivier Caracotch, a prosecutor in the French town where the investigation started, told Reuters:

"It's the first time in Europe that a judicial action has resulted in the closure of an illegal exchange for virtual currency. It's also the first time in France that bitcoins have been seized as part of a judicial procedure."

The arrests come just a couple weeks after the European Banking Authority (EBA) put out a warning that financial institutions should stay away from Bitcoin and other virtual currencies. In the report, the EBA outlined about 70 potential "risks" associated with digital currencies, ranging from user vulnerability to financial integrity. 

Despite this discouragement, countries in Europe and around the world have already started accepting Bitcoin and incorporating digital currencies into their economies. Switzerland's Federal Council, which functions as its executive branch, just released a 25-page report that outlined how they thought Bitcoin businesses should be regulated, and the Council's ultimate recommendation was that no new regulations should be put in place. Koen Geens, the minister of finance for Belgium, said that he doesn't see the Belgian National Bank having any objections to Bitcoin. Russia was initially tough on Bitcoin, but The Wall Street Journal reported last week that Russia's central bank has decided not to interfere with the use of virtual currencies. 

The Bitcoin Foundation rejected the EBA's report and said that if this opinion is adopted it would be detrimental to the public. Jim Harper, the foundation's global policy counsel, said:

"Europe's states and people are figuring out for themselves how to get the benefits of Bitcoin while controlling the costs. They may not listen to the European Banking Authority."

Harper is right. ZipZap, a global cash transaction network, was shut down in the U.K. earlier this year. Two weeks ago though, it was reinstated at 20,000 partner retail locations across the U.K. ZipZap can be used in countries across Europe, a full list of which can be found on its website

Watch Jeffrey Tucker talk about how Bitcoin is reinventing the monetary system: