Bitcoin exchange in France shut down by police officers

Bitcoin exchange in France shut down by police officers
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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.

6 Responses

  1. Avatar
    Joseph

    “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.
    […]
    About this exchange more specifically, I’ll hold my judgment until more information is available.”

    Riiight

  2. Avatar
    yop

    “A bitcoin exchange was dismantled”
    Wrong at first sentence… please check your sources !
    Great journalism…

  3. Avatar
  4. Avatar
    Sandrine Ayral

    I’m glad we have the same sources actually. “Exchange” purely and simply refers to the conversion of fiat money into bitcoin – and the other way around. Les Echos article refers to money laundering and banking activity, which can indeed make us think that this web platform enabled its users to exchange bitcoins.
    I stressed on this specific point. However, yes indeed, this platform seemed to operate other kinds of activities – which is mentioned in the article above.
    My point remains the same: the public authorities’ communiqué associated to the dismantling of this bitcoin platform / exchange / casino / organization shows a misunderstanding of what bitcoin is and of its value, and I’m referring to this part of the communiqué more specifically: “Comme toutes les monnaies virtuelles, elle présente un risque élevé de dérives criminelles compte tenu, d’une part, de l’opacité qui entoure leur existence et leur fonctionnement et, d’autre part, de l’absence complète de régulation par les acteurs du marché monétaire”
    I don’t regret the shut down of this platform if it were indeed fostering criminal activities – which remains to be seen. I regret the fact that once more bitcoin is referred to as an obscure and dangerous currency encouraging crime and illegal businesses.

  5. Avatar
    blablabla

    ” I regret the fact that once more bitcoin is referred to as an obscure and dangerous currency encouraging crime and illegal businesses.”

    But that’s exactly what they were doing though.

    • Avatar
      Sandrine Ayral

      Yes, but limiting bitcoin to only a fuel for crime is a terrible mistake. It’s the point of this article. Many innovations in their first years of existence were used in quite shady ways (look at how the Internet used to be used), which doesn’t mean that they were not valuable.

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