Shutting Down Bitcoin: Inside the US Government’s Reported Attempt

While Bitcoin conspiracy theorists have long suspected that the US government has tried to shut the currency down, it’s only now that someone has come forward to reveal details of the government’s actual attempt.

In 2012, when Bitcoin was first rising in popularity, former federal prosecutor Katie Haun was asked to look into “shutting down” Bitcoin by her boss at the US attorney’s office. “They said ‘we have this perfect assignment for you’ — there’s this thing called Bitcoin and we need to investigate it,” Haun told CNBC in an extensive interview.

It was the first time she had ever heard of Bitcoin. At the time, the now widely used cryptocurrency was mainly used for purchases made deep on the internet, which in many cases was related to illegal transactions of goods or services on the black market. However, Haun quickly realized that it wasn’t the cryptocurrency that needed probing.

“It would have been akin to saying ‘let’s go prosecute cash,’” she said.

Instead of shutting down Bitcoin, her department prosecuted multiple cases where it was used for illegal activities such as extortion or white-collar crime. It even turned out that the technology behind Bitcoin, known as the blockchain, actually helped her department solve the cases.


Over the next few years, Haun’s view on cryptocurrency would evolve, as she would go on to sit on the board of U.S. Bitcoin and cryptocurrency exchange Coinbase and teach classes on cryptocurrency at Stanford Law School. She is also now the first female general partner at US venture capital firm Andreessen Horowitz and co-heads its $350 million cryptocurrency fund. Not to mention, she is also working closely with Facebook, as the social media giant attempts to make its own cryptocurrency called Libra.

Unfortunately, ever since current US president Donald Trump entered the White House, government officials have become more transparent regarding their opposition to cryptocurrencies. Trump has expressed his dislike for Bitcoin earlier this year on his Twitter profile page, which has been known to move entire markets for better or worse. On it, he’s branded Bitcoin and other cryptocurrencies as assets that can “facilitate unlawful behavior, including drug trade and other illegal activity.”

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Despite their deep — and as recently evidenced, longstanding — dislike for Bitcoin and other cryptocurrencies, governments as powerful as the US can’t do anything to touch it. After all, an article by Special Counsel on ‘What is Bitcoin? What Are the Legal Ramifications?’ points out that it is the primary player in cryptocurrency, and that despite its many legal ramifications, it’s not going away any time soon. This is because of its decentralized nature, which is the entire point of cryptocurrency, as it’s not meant to be controlled by an institution. Not to mention, Business Insider reports that Bitcoin has also become somewhat of a safe haven asset next to the likes of gold.

Far-right commentator Mike Cernovic seems to agree that cryptocurrencies are the future. Replying to Trump’s negative tweet on Bitcoin, he said “This is a major mistake on your part and shows a lack of vision. Today, Bitcoin became mainstream.”

He’s not wrong either. Despite its volatility, Bitcoin’s price has surpassed the $9,000 mark, and with it going from a bullish market to a neutral one, the likelihood of it disappearing anytime soon is very low. Haun and her colleagues over at Horowitz also believe that crypto is really a new computing platform and could be the “next iteration” of mobile and internet.

“There’s potential for much greater good to come from cryptocurrency in general — the greater beneficial uses outweigh the bad ones,” Haun says.

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