Bitcoin exchange in France shut down by police officers

Jul 7, 2014
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A bitcoin exchange was dismantled on July 2nd and 3rd in southern France and its three co-founders arrested. 388 bitcoins were seized, which roughly represents 180 000 euros at press time.

The authorities’ official communiqué states that this operation was carried out because of the ‘illicit’ nature of this exchange. According to this communiqué, the organization was conducting ‘illegal banking, gambling, betting activities’.

The exchange manager, his wife and another partner were arrested – two of them were put under legal supervision, the third person was released.

It’s the first time such an operation is carried out in Europe. Sadly, this first time has to be in France. My first reaction to this is that, once more, bitcoin is widely misunderstood, and more specifically by the French public authorities. Since its creation, bitcoin as a currency has been stigmatized as a Ponzi scheme, a fuel for terrorism, drug traffic, gambling, speculation and swindling.

True, some of these claims have been fed by the actions of very questionable organizations such as Silk Road, which was dismantled by the FBI last October, and MtGox, which “lost track” of 744 000 bitcoins owned by its users.

I won’t dwell on this here: bitcoin has real benefits, for consumers and companies and could have a much broader impact if the appropriate applications were built on top of the protocol.

Indeed, governments should have a closer look at bitcoin and legislate how they see fit to protect their citizens. Most of them have been issuing statements about their stance on bitcoin. In the public authorities’ analysis to create a legal frame for this innovation, one can only hope that they’ll see as much the potential value it holds for its users as the inherent risk associated to any innovation.

There’s very little information around this exchange and its real activities, so it’s very hard to tell if the police’s action can only be frowned upon as “oh yeah, once again, these Frenchies don’t get a damn thing about innovation”. However, the communiqué does indicate that the authorities are adopting a repressive behavior about bitcoin and digital currencies. According to them, they’re very likely to spark criminal activity because of:

  • “the lack of transparency around their existence and their functioning”
  • “the absence of regulation by the actors of the monetary market”

Sadly, both sentences show a deep misunderstanding of what bitcoin is and what its benefits are: bitcoin’s functioning is complex, but all the information you need to understand it is available online. The lack of regulation by the actors of the monetary market is one of the reasons why bitcoin is valuable and so amazingly interesting.

Hopefully, the French bitcoin community will keep on communicating with the government to make it understand what bitcoin is about. About this exchange more specifically, I’ll hold my judgment until more information is available.