Last week, Betabeat received an email from an anonymous source claiming to have leaked an internal FBI report about the virtual currency Bitcoin. The report, published April 24, revealed the agency is worried the currency could become a payment method for cyber criminals in the near future, and could be used to fund “illicit groups.” (Wikileaks, anyone?) The FBI also determined the currency to be an “increasingly useful tool for various illegal activities beyond the cyber realm,” and could become attractive to money launderers.
The report, titled “Bitcoin Virtual Currency: Intelligence. Unique Features Present Distinct Challenges for Deterring Illicit Activity,” was the FBI’s first research report on Bitcoin. The report was not classified, but it was marked “for official use only.” Betabeat, Wired, and a number of blogs ran with the story without confirming the report’s authenticity, but today we got a call back from the FBI. “It is legitimate, but it was not leaked by the government,” an FBI representative told Betabeat.
It’s likely that the report was leaked by someone in law enforcement who got the report from the FBI. “FBI intelligence documents are meant for use primarily within the law enforcement community to provide situational awareness,” the spokesperson told us. “These documents are not for release beyond law enforcement and public safety personnel. We provactively gather intelligence and share information with our law enforcement and intelligence community partners related to a wide range of potential threats.”
The report was disseminated to 11 agencies including the Australian Federal Police, New Zealand Police, Royal Canadian Mounted Police and Serious Organised Crime Agency. It was prepared by the Domestic Threats Cyber Intelligence Unit, Technology Cyber Intelligence Unit, and the Financial Crimes Intelligence Unit of the FBI.
The report contains a basic explanation of how Bitcoin works, noting that its decentralized nature presents some challenges for law enforcement. One of the biggest problems, the FBI noted, is the risk of people stealing Bitcoins from each other; also, the report notes the unauthorized use of computer equipment to mine Bitcoins. The FBI estimates the Bitcoin economy is worth between $35 and $40 million.
The FBI has seen this kind of threat before. The report notes that criminals may adopt Bitcoin alongside other virtual currencies such as WebMoney, “which they have little reason to abandon.” All in all, the report leaves little impression that the FBI is afraid of Bitcoin or considers it an extraordinary threat, though it does note that “If Bitcoin stabilizes and grows in popularity, it will become an increasingly useful tool for various illegal activities beyond the cyber realm,” citing child pornography, human trafficking, gambling and terrorism.