Media and Governments are Acting Irresponsibly

In light of the weekend’s tragic attack in Munich, much attention has been focused on how the gunman obtained his weapon. Based on a statement from the president of the Bavarian Office of Criminal Investigation, Robert Heimberger, the German media has reported that the shooter purchased his gun on the dark web using Bitcoin. These reports, which were published just days after the attack, are obviously not the result of a thorough investigation.  Moreover, the media is merely surmising that Bitcoin was used because it has been the chosen currency for other dark web transactions:    

The consensus is that the shooter must have illegally acquired the gun on the Darknet and many of the German newspapers that reported it specifically mentioned Bitcoin as the preferred payment method of users on the clandestine network.

This generally irresponsible reporting is now “spurring a new debate as to whether or not the German government will need to crack down on cryptocurrency even further.” Thus, the foundation for the debate is unreliable “facts.” This means that the individuals who rely on these unsubstantiated facts to formulate their views on virtual currency are not fully informed, which, of course, unfairly skews the debate towards the position that the media has taken. 

As we all know, there have recently been multiple gun-related attacks throughout the world.  While each of these attacks is a tragedy, there is hardly any evidence that virtual currency has any meaningful connection to them.  Yet, the media, looking to place blame, have attempted to place the spotlight on virtual currency.  Just last year, following the shootings in Paris, the media tried to tie illegal activity to virtual currencies.  However, those statements needed to be clarified when the investigation was completed, as no such link was proven: “[t]here is absolutely no evidence so far that terrorists used any bitcoin in financing their actions or why would they not simply use cash if the purpose is just to rent a getaway car, mobile phones or anything else they don’t want tracked.”  The danger of this type of reckless reporting is that laypeople read and absorb the initial headlines following the tragedy, but usually do not follow the story for an extended period of time, such that they are unlikely to read the later clarification and change their opinions.

It is not just the media that reacts swiftly to unfounded statements regarding the alleged use of virtual currency to fund violence and terrorism.  Following the Paris attacks, the European Union planned a “crackdown on virtual currencies and anonymous payments made online and via pre-paid cards in a bid to tackle terrorism financing.” This knee-jerk decision to pursue sweeping regulation failed to consider whether virtual currency had any role in the attacks.  Indeed, in 2013, in response to continued suggestions by the media and governments that Bitcoin was playing a primary role in funding terrorism, the UK parliament issued a report indicating that ISIS was not receiving any significant funding through virtual currency:

For the longest time, media outlets and governments have pointed the finger of blame at Bitcoin for its alleged role in terrorist funding. But as this report goes to show, Bitcoin is not a factor in the process. The vast majority of funds comes through traditional channels and the banking system. To Bitcoin users, this will hardly be a surprise.

In the wake of unspeakable acts of violence, the media and governments around the world have often reacted swiftly to blame virtual currency, even though there are no facts to support any such connection.  Unfortunately, this baseless action then serves as a basis for public opinion, which is not easy to reverse even after the actual facts are revealed.  While wrongdoers unfortunately exist in all facets of society, there is no basis to conclude that virtual currency is enabling violence or other criminal activity, or that stricter regulation of virtual currency would have a meaningful impact on those activities.  Thus, virtual currency needs to do everything it can to make sure that the public is aware of the true facts and that any false reports linking virtual currency to violence or other criminal activity are promptly discredited.

Jeffrey K. Berns is the Managing Partner and head of the Los Angeles office for Berns Weiss Inc. Over the course of his 25-year legal career, he has tenaciously fought for the rights of consumers, concentrating his practice on consumer lending and consumer fraud class actions. Among his other accomplishments, he led a group of 20 law firms that prosecuted cutting-edge class action cases against financial institutions, such as Countrywide, Wells Fargo, and JPMorgan Chase, concerning destructive negative amortization loans that unknowingly caused borrowers to assume tens of thousands of dollars of additional debt. These efforts led to settlements comprising hundreds of millions of dollars in cash payments and substantial loan modification relief. Visit www.law111.com for more info.
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