Leaked Report: FBI is Terrified of Bitcoin Becoming a Currency for ‘Cyber Criminals’

Bitcoin "adds unique complexities for investigators because of its decentralized nature."

A physical representation of digital Bitcoins. (flickr.com/zcopley)

Bitcoin usage is on the rise; the virtual currency is now employed by everyone from advertisers to artists. In fact, Bitcoin has apparently grown so popular that it warranted its own FBI report.

Published in late April but leaked yesterday, the unclassified document–of which Wired provided a PDF–outlines the federal government’s fears surrounding the Bitcoin currency, primarily that in the near future, “cyber criminals will treat Bitcoin as another payment option alongside more traditional and established virtual currencies.”

Because Bitcoin is a decentralized P2P currency, that makes it much harder for the FBI to track. The report estimates that the Bitcoin economy is worth in total anywhere from $35 million to $44 million.

Of course, the anonymity that comes hand-in-hand with Bitcoin is partially why its appeal has been so vast. Sure, you can use it to buy drugs on Silk Road, but you can also use it to buy food at Manhattan restaurants.

Though do so at your own risk–the FBI report also points to cases of fraud on Bitcoin users from other Bitcoin users. As Wired notes:

The bigger risk for crooks and others who use bitcoin might not come from law enforcement identifying them, but from hackers who are out to rob their virtual Bitcoin wallets dry. There have been several cases of hackers using malware to steal the currency in the virtual wallet stored on a user’s machine.

Cyber-criminal-on-cyber-criminal crime? How meta.

Leaked Report: FBI is Terrified of Bitcoin Becoming a Currency for ‘Cyber Criminals’