Charleston

A Fistful of Bitcoins

(Charleston City Paper) Bitcoin doesn’t exist on paper. It has no public face or founder, and it isn’t regulated or backed by a government. You probably haven’t even heard of it. Once a hobbyhorse for techno-libertarians, black-market drug dealers, or just those skeptical of centralized banking, the online crypto-currency gained a broader interest earlier this year when the value of bitcoins shot up tenfold. Since then, not only have consumers been paying more attention — so have the cops and the feds.

In Washington, a crackdown on Bitcoin might be coming. Recently, multiple federal agencies met with advocates for virtual currency in a closed-door meeting where representatives from the Bitcoin Foundation warned against overregulation. A U.S. Senate subcommittee is investigating whether to regulate virtual currencies like Bitcoin. It’s a hot commodity right now, and part of all the recent excitement surrounding Bitcoin sparked right here in Charleston.

Back in April, federal agents allege that they seized 11.02 Bitcoins from a 31-year-old hospitality worker named Eric Hughes, who was living in downtown Charleston. The case immediately made a splash in the murky realm of online economies. The federal Drug Enforcement Agency said Hughes went by Casey Jones, a name linked to an identity on the internet black market called Silk Road in connection with the sale of prescription pills. The underground marketplace exists on the anonymous Tor Network in the caverns of the Undernet, also known as the Deep Web. The Charleston seizure here marked the first time the feds had ever confiscated bitcoins, and the DEA posted a public forfeiture notice online. The 11.02 Bitcoins were worth about $814. But the DEA has still not charged Hughes with a crime.