Article The Bamboozling Bite of Bitcoin, 0817 UTBJ, Vol. 30, No. 4. 32

AuthorScott Isaacson, J.

Article The Bamboozling Bite of Bitcoin

Vol. 30 No. 4 Pg. 32

Utah Bar Journal

August, 2017

July, 2017

Bitcoin Doesn’t Make White Collar Crime Possible, But It Does Make It Easier!

Scott Isaacson, J.

Introduction

Virtual currencies, such as Bitcoin, have been referred to as the Wild West of financial products. Bitcoin is technically complex, digitally innovative, and evasively intangible. These characteristics lead to risks of misuse, confusion, and obfuscation. White collar criminals leverage these attributes to make their schemes and artifices even more effective, less accessible to detection, and increasingly attractive to potential victims.

Bitcoin is being utilized to perpetrate new instances of fraud on victims who either trust too much or simply do not understand its digital wizardry. Some experts suggest that any new technology does not officially arrive until scammers start leeching off the new technology. For example, the telegraph brought betting fraud (placing bets after races were run); telephones brought scam calls (anonymity); and email brought a flood of spam in the form of scam messages. Given the rise in scams using Bitcoin, it would appear that Bitcoin has arrived!

Bitcoin

Bitcoin is a decentralized digital currency used to purchase goods and services online. Since its introduction in 2009, Bitcoin’s value has been volatile, ranging from $2 to $1,200. Some estimate that there are more than 12.2 million bitcoins in circulation. The theory and crypto-science behind Bitcoin are beyond the scope of this article, however, one description for the uninitiated is: “Bitcoin is a consensus network that enables a new payment system and a completely digital money.…From a user perspective, Bitcoin is pretty much like cash for the Internet.” What is Bitcoin?, bitcoin.org, https://bitcoin.org/en/faq#what-is-bitcoin (last visited May 29, 2017).

Bitcoin is used to pay and get paid. It is easy and accessible to everyone. It is virtual cash. There is no sharing of sensitive credit card information or identity and so there can be no identity theft. If your tangible wallet is stolen and all you had in it was cash, you would lose no more than cash itself. Bitcoin is like that. However, it is also vastly more technically sophisticated than cash. When attempts to describe Bitcoin technology to the novice user include phrases like block chains, shared public ledger...

To continue reading

Request your trial