Last year, federal agents arrested a man for trying to exchange guns for Bitcoin, the virtual currency that allows transactions to be conducted behind a cloak of anonymity.
But now some states are making it legal to buy guns with Bitcoin.
Gun manufacturers are now the latest in a growing list of businesses that are accepting cryptocurrencies. Texas-based TrackPoint — which makes a $28,000 rifle that can hit targets at 1,000 yards away — announced Thursday that customers could start paying for products with Bitcoin. But the addition of digital currencies to the already poorly regulated gun market could make illegal gun sales easier and harder to control.
One of the biggest appeals of cryptocurrencies like Bitcoin is that the funds are virtually untraceable and cloak buyers’ identities. Merchants who take cryptocurrencies aren’t hit with processing fees like with credit cards, making them an attractive payment option for mainstream retailers like Overstock.com, arms dealers and private sellers alike.
Bitcoin’s anonymity probably won’t be a problem for TrackPoint, which, as a federally licensed manufacturer, has to run background checks on all gun buyers regardless of the form of payment. Even if customers pay with Bitcoin, the currency won’t shield the gun buyer’s identity. TrackPoint will still know who they are.
But cryptocurrencies are also becoming popular among private sellers, which don’t have to run checks on buyers. That’s when Bitcoin-bought guns become a problem. Only 14 states and Washington, D.C. require checks for private handgun sales. And with the surge of online gun sellers, taking crypotcurrencies just compounds the problem, Chelsea Parsons, associate director of crime and firearms policy for Center for American Progress, told ThinkProgress.
Regular readers know I'm no fan of Bitcoin. This is why. Drugs, guns, and human trafficking are much easier when identity isn't an issue.