Bitcoin in the Headlines is a weekly look at global bitcoin news, analysing media coverage and its impact.
All eyes were on the US last week, as the media covered the Hollywood-worthy plot involving two special agents who allegedly pocketed vast sums of bitcoin while working on the Silk Road investigation in Baltimore.
The country stayed in the spotlight this week, after Kentucky Senator Rand Paul’s announcement he would accept bitcoin donations in his presidential campaign started something of a media frenzy.
Controversy struck when allegations of corruption among the ranks of The Bitcoin Foundation and suggestions that the organisation is on the brink of bankruptcy.
And no week would be complete without bitcoin being tied to the criminal underworld. This time, it was the turn of hackers requesting ransom money to decrypt ‘kidnapped’ data from various US police departments.
Let’s take a closer look.
Bitcoin in the White House?
The news of a bitcoin aficionado potentially entering the White House was extensively covered by media outlets, resulting in well over 2,500 online articles.
Senator Rand Paul is probably the most high-profile American politician to accept bitcoin donations, as well as the latest in a string of state and national Republicans to turn to the digital currency in their fundraising efforts.
Paul’s announcement follows on from his public declaration that he was “an outlier” on the “bitcoin thing”. The senator made his skepticism towards the digital currency clear during a panel discussion led by TechCrunch founder Michael Arrington earlier this year.
At the time, he told Bloomberg News he had been fascinated by the concept, adding “but I would never have purchased it myself. I’m just a little bit skeptical”.
With this in mind, it’s hardly surprising that Paul’s decision to embrace bitcoin as part of his fundraising efforts has been branded “a genius political move” – rather than an indication of support – by the Washington Post.
In his article, Brian Fung, noted:
“The GOP contender is the first declared candidate in the 2016 race to fund his White House bid with virtual currencies. It’s possible Paul is the first presidential candidate in US history to do so, in the latest sign of how politics and technology now frequently overlap.”
Jeff Stone, writing for the International Business Times, has also taken notice that Paul’s fundraising efforts include the digital currency. In this instance, Stone refers to how bitcoin is “associated most frequently with libertarianism, a movement with which Paul’s policies are often compared”.
Match made in crypto heaven? Stone doesn’t think so. He said:
“Both the moneybomb and the bitcoin donations are reminiscent of the failed presidential campaigns once launched by his [Paul’s] father, former US Republican Ron Paul.”
The term ‘moneybomb’ was coined in 2007 to describe grassroots fundraising efforts over a brief, fixed period of time, usually to support an election candidate by dramatically increasing, concentrating and publicising fundraising. The term was first applied to a supporter-led fundraiser on behalf of presidential candidate Ron Paul – Rand’s father.
Timothy B Lee’s Vox piece also linked Paul’s decision to accept bitcoin to his expected focus on monetary policy during his campaign.
Lee noted: “Rand Paul is expected to make monetary policy and the malignant influence of the Federal Reserve a major theme of his 2016 campaign for president. These hard-money views, popularised by Paul’s father in the last two presidential campaigns, are also popular in the bitcoin community. Many bitcoin fans see the decentralised virtual currency as an alternative to the dollar.”
Finally, The New York Times contributed to the debate with its headline ‘In Accepting Bitcoin, Rand Paul Raises Money and Questions’.
In his piece, Eric Lichtblau questioned the ramifications of Paul’s decision to accept a “essentially untraceable” currency. He said:
“It also raises questions about whether illegal contributions could make their way into campaigns more easily.”
Lichtblau’s comments come almost a year after the US Federal Election Commission (FEC) concluded that bitcoin donators were required to provide the same personal information – including name and location – as those donating via other methods.
Additionally, recent investigations and convictions by various law enforcement agencies have proved that bitcoin transactions aren’t as “untraceable” as some would think.
Bankruptcy on the cards?
It all started with a post by Olivier Janssens – a recently elected board member at the Bitcoin Foundation – which described the organisation as “effectively bankrupt” and persuaded readers “not to fall for” what he characterised as attempts to control the message regarding its finances.
Janssens’ allegations were picked up by the realm of cryptocurrency-focused publications, as the mainstream media continued to play out Paul’s announcement.
Despite the initial lack of interest by some of the most well-known mainstream outlets, Janssens’ allegations caught the attention of Michael J Casey, a regular contributor to the bitcoin scene with his BitBeat series for the Wall Street Journal, written in conjunction with Paul Vigna.
Casey’s opening statement alluded to the already strained relationship between the Foundation and the wider bitcoin community.
“… the factious relationship with the bitcoin community is again being tested after a disgruntled new board member declared the digital currency advocacy group to be effectively bankrupt and called for a membership rebellion against a leadership that he accused of acting in secrecy.”
The news, as we know, came a couple of months after the Foundation declared that it was going to focus on core development. Casey concluded:
“How this is resolved may come down to the preferences of Mr Andresen, the leader of the bitcoin core development team.”
A piece by Jerin Mathew in the International Business Times also relayed the controversy. Perhaps what is more – or less – surprising is the concluding statement, in which Mathew references two prominent bitcoin figures and links the Foundation to two of its founding members and now notorious crime perpetrators.
The Bitcoin Foundation, he says, was formed in 2012 by a number of bitcoin enthusiasts, “including Mt Gox’s Mark Karpeles and Charlie Shrem”. The latter is currently serving a 10 month prison sentence for aiding and abetting an unlicensed money transmitting business.
More bitcoin crime?
Bitcoin’s links with criminal activity have always been relatively well documented by the media.
In this instance, a quick google search with the terms “bitcoin” and “Massachusetts” this week resulted in over 40 articles.
Outlets from all ends of the political and financial spectrum jumped at the chance to cover the news of a small Massachusetts police station that had been attacked by criminals who infected its network with malware, demanding a $500 payment – in bitcoin, of course – to decrypt the files.
It is interesting to see that most publications ran with the bitcoin angle, rather than with the crime’s high-level of sophistication, yet again fuelling the digital currency’s association with illicit activities.
The Daily Mail, a relative newcomer to the bitcoin scene, ran with ‘Small Massachusetts police department forced to pay $500 Bitcoin ransom after hackers held their computer system hostage’ as its headline this week.
In contrast, The Boston Globe refrained from mentioning ‘bitcoin’ in its headline, but it still highlighted the currency’s potential for perpetrating crime, noting:
“… the attackers demanded payment in bitcoin, a digital currency that is much harder to trace than other forms of money.”
Spring is upon us and, if these headlines are to be believed, the bitcoin space is blooming with crime, corruption and extortion aplenty.