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Those arguments seem to have made an impression, because government officials repeated many of
them at this week's hearings. The Homeland Security Committee invited representatives of three
federal agencies to testify before the committee this week. Jennifer Shasky Calvery represented the
Financial Crimes Enforcement Network, which enforces the nation's laws against money laundering.
Mythili Raman spoke on behalf of the Justice Department, whose enforcement activities have
included the shuttering the Bitcoin-based drug marketplace Silk Road. And Edward Lowery spoke for
the Secret Service, which (along with the Justice Department) was involved in shutting down e-Gold
and Liberty Reserve, two virtual currencies that the government alleged had become vast money-
laundering operations. Calvery also testified before the Senate Banking committee on Tuesday.
"Virtual currencies have yet to overtake more traditional methods to move funds internationally" for
"criminal purposes," Calvery said. She pointed out that the Bitcoin network has processed only about
$8 billion worth of transactions over the last year, compared to an estimated $1.6 trillion in "global
criminal proceeds" in 2009. Clearly, the vast majority of those transactions are using some other
financial network.
"We are attuned to the criminal use" of Bitcoin, Raman said. But "there are many legitimate uses.
These virtual currencies are not in and of themselves illegal."
Calvery agreed. "Innovation is a very important part of our economy," she said, cautioning that
premature regulation could stifle Bitcoin innovation.
The personal touch
Regulators are busy people. They're more likely to pay attention to flesh-and-blood advocates than to
anonymous Internet commenters. Murck and Andresen's trip to Washington proved to be crucial to
building productive relationships with policymakers.
Calvery was a keynote speaker at the June conference. Murck and Calvery met in the speakers' room
at the conference and had a conversation that would later lead to the closed-door August meeting
between regulators and Bitcoin advocates. The day after the June conference, Murck was introduced
to staffers on the Senate Homeland Security Committee, beginning a conversation that culminated in
this week's hearings.
Murck says that not everyone in the Bitcoin community was happy about his engagement with
Washington. The Bitcoin community has a strong libertarian streak, and many Bitcoin devotees
worried that conversations with federal regulators could help to legitimize and encourage regulation.
But to the surprise of many, the Bitcoin advocates' charm offensive actually changed the minds of
many D.C. insiders. Winning over Allen was a particular coup for the Bitcoin community. Allen's
warnings against the dangers of premature regulation were particularly effective coming from a long-
time activist against child pornography.

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