Lgeal Issues

Recently, it has been numerously brought up and advised when discussing the legal and legitimate merits of Bitcoins. When discussing the potential threat and fraud of virtual currency, the federal district court has come to terms the Bitcoins are in fact ''real money.'' The reasoning behind this audacious and innovative claim is that due to the fact that Bitcoins have been used to exchange for goods and services and have the ability to be traded for other, more conventional forms of currencies, such as cash or credit and ''they are money, and, thus, a contract for the investment of Bitcoins is an investment contract, and, therefore, a security under federal securities law.'' (Elwell,Seitzinger) The New York Department of Financial Services have also stated that they are looking into presenting a proposal to regulate bitcoins. This proposal is said to be finalized and come to a verdict sometime in the first or second quarter of 2015.

This ongoing constitutional interpretation that we have no choice but to accept bitcoins as a legitimate currency has inadvertently provided leeway for Ponzi schemes and other criminal violations, because it almost seems that money can literally be created out of thin air from a novice point of view. As the public has witnessed, combining this knowledge of easily acquiring and storing money with the technological knowledge to hack and/or invade one's privacy could result is devastating consequences and opens the door for the common person (in recent cases, celebrities more often) to be a victim to their own phone, computer, etc. If digital currencies become the norm within the decade, there will need to be a long list of rules and regulations to protect one's own security and financial properties from being stolen or manipulated with malicious intensions.