Following a series of multimillion-dollar thefts and losses, federal regulators want to step up their oversight of virtual currency bitcoin. But bitcoin—a nationless digital money that uses cryptography to control its creation and transactions—doesn’t fit neatly in any regulatory box.
“There’s an incredible interest in regulating this at the federal level,” says Kenneth Russak, a commercial finance specialist at Frandzel Robins Bloom & Csato. Potential overseers include the Federal Trade Commission, the Commodity Futures Trading Commission, the U.S. Securities and Exchange Commission and the Consumer Financial Protection Bureau. All are charged with protecting consumers or investors from fraud, but their jurisdiction over bitcoin transactions is unclear.
