Bitcoin in the news again - Senate takes a close look.

It's clear Bitcoins are growing in popularity. The price of the currency soared to a new all-time high of $675 Monday, up from only $12 a year ago. Without meddling banks in between transactions, Bitcoins trade seamlessly and offer nearly as much privacy as cash.

That's why the Senate Committee on Homeland Security and Government Affairs is hearing from various sides Monday. According to prepared statements from the Justice Department, an official at the DOJ said it needs more help catching criminals who use the secretive currency. Meanwhile, Bitcoin users want the government to back off and let the system blossom.

Law enforcement doesn't like the anonymity - there are legitimate uses for Bitcoins. But it's also being used to anonymously buy drugs, hire assassins, trade child porn and dodge taxes.

The nation's acting assistant attorney general, Mythili Raman, described the more notorious ways Bitcoins are being used. She mentioned the recent FBI shutdown of Silk Road, an online black market. Illicit drugs and services were sold there using the untraceable currency. The agency arrested its alleged founder and seized 170,000 BTC, valued at $101 million as of Monday afternoon.

The way Bitcoins are transacted, using coded wallets and special keys that don't need real names, enables substantial privacy. That makes it more difficult to follow the money and catch criminals.

Along those lines, there are concerns that those making money from sex trafficking and pornography involving children have started to adopt Bitcoin.

The International Centre for Missing and Exploited Children noted how anonymity offered by Bitcoin has made it the currency of choice for predators. The nonprofit group's president, Ernie Allen, says he's not against the digital economy. But he wants it less private.

"If the perception of anonymity diminishes, we believe the criminal use will diminish with it," he said in prepared remarks.

Edward Lowery III, who leads the Secret Service's criminal investigative division, added that the technologically complex Bitcoin system makes it hard for everyday agents to stay on targets' tails. They need more tech-savvy investigators than the agency can currently afford.

Also chiming in was the potential regulator that could one-day ruin the unregulated Bitcoin party: The Treasury Department.

Treasury already issued guidance in March saying that groups exchanging Bitcoins must register with the government and keep records. Everyday Bitcoin users remain unregulated. Jennifer Shasky Calvery is head of the department's financial crimes unit and warned about leaving the Bitcoin community untouched.

"One of our biggest challenges is striking the right balance between the costs and benefits of regulation," she said.

The Bitcoin community doesn't want too much regulation. Fans of Bitcoin say the currency is going mainstream, and it's not just for internet weirdos. That's why they want the government to give it a chance to grow and thrive without tacking on burdensome rules.

The Bitcoin Foundation, a group that seeks to strengthen the digital system, is trying to convince politicians the currency works as is.

The group also notes that meetings with financial regulators have gone well so far, but the Treasury Department should have met with Bitcoin supporters before taking a stance earlier this year.

"The American people have been reminded this year of reasons to be concerned for their privacy," says the group's attorney, Patrick Murck, referencing the recent disclosures about unwarranted government spying on innocent citizens.

Source: CNN Money

Internet sales tax, here we come?

The days of shopping online and being able to duck sales taxes may soon come to an end. The U.S. Senate is slated to vote on the Internet sales tax sometime next week, according to Reuters.

Internet tax supporters, with backing from Walmart, Macy's, and Best Buy, are hoping a Senate vote will give them enough political leverage to require Americans to pay sales tax whenever buying goods online. This could usher in the first national Internet sales tax ever.

According to Reuters, Senate Majority Leader Harry Reid filed a motion on Thursday supporting the proposal. Since Reid filed the motion, the Senate is now expected to vote as soon as Monday on the motion, but it could come later in the week.

The way the law now works is that states can only require Internet retailers with physical stores within their borders to collect sales tax. This means that online shoppers are supposed to self-report sales tax when making purchases -- but many don't.

Still, several major Internet retailers, like Amazon and Apple, which have opened stores and warehouses in more states, are now requiring shoppers to pay sales taxes on Internet purchases. Smaller retailers and eBay sellers, however, are less likely to enforce the self-reported sales tax.
Last month, the Senate voted overwhelmingly, 75 to 24, on a nonbinding version of the bill despite warnings from a handful of senators that the proposal is antibusiness, harmful to taxpayers, and will be a "bureaucratic nightmare."

Besides Walmart, Macy's, and Best Buy, other retails backing the tax include Target, AutoZone, Home Depot, OfficeMax, and the Container Store. They argue that online retailers often do not collect sales taxes at checkout and thus enjoy an unfair competitive advantage over the big box stores.

Those who are against the proposal say that it amounts to a multibillion dollar tax hike on American consumers. Last month, the National Taxpayers Union set up a petition to Congress saying the tax was "really just a way to unleash state tax collectors on the Internet," and 15 conservative groups also sent a letter to members of Congress saying an Internet tax law is "is bad news for conservative principles and the cause of limited government."

Several online tech companies are also against an Internet tax, including eBay, an association of small Internet sellers called WE R HERE, and NetChoice, which includes Facebook, Yahoo, LivingSocial, and AOL as members.

According to Reuters, the measure needs 60 Senate votes for it to move forward.

Original story courtesy of CNET.

Watch out everyone...CISPA has passed in the House. Let's all hope it gets stuck in the Senate!

CISPA, the controversial bill intended to let Internet companies share information about users more freely with the government, has been passed by the House of Representatives. The bill has been touched up since its first appearance last year, but many remain suspicious after what they view as years of misguided tech legislation. Both outside critics and the White House have said CISPA is fundamentally unsound.

The Cyber Intelligence Sharing and Protection Act (CISPA) is meant to let Internet companies share information with the government for cybersecurity purposes. A company like Facebook or Twitter, for instance, may have info the government wants, like when a user logged in or where they were at a certain time.

The bill would facilitate sharing that data, but many believe it throws privacy protections out the window in the process. Critics say it amounts to the government deputizing private companies to do their surveillance for them.

Source: NBC