US Attorney General Eric Holder expressed his concerns at the growth of virtual currencies like Bitcoin and urged the Justice Department to remain cautious when it comes to the innovative new currencies.
Holder explained to the House Judiciary Committee that the Justice Department must be nimble to stop criminals taking advantage of virtual currencies like Bitcoin as fronts for criminal activity.
"The department is committed to innovating alongside this new technology in order to ensure our investigations are not impeded by any improvement in criminals' ability to move funds anonymously," Holder told the House Judiciary Committee. "Virtual currencies can pose challenges for law enforcement given the appeal they have among those seeking to conceal illegal activity. This potential must be closely considered."
Personnel high up in the US government have been discussing how to handle virtual currencies and that in turn has seen the value of Bitcoin, in particular, soar. Back in November 2013, when the Senate announced it had been informed by the FBI the currency is legitimate, its value saw a three-fold increase from $200 [£124] to $619 [£384]. Similar peaks and troughs have followed, and it has been hovering around the $450 [£268] to $570 [£341] mark for some time.
The biggest blow the virtual currency has so far been dealt came earlier on this year when the Tokyo-based exchange MtGox closed its doors after seeing $650 million [£388 million] worth of Bitcoins stolen by hackers.
One of the main reasons regulators are keen to get a handle on the virtual currencies is due to the popularity of them and the fact that they are being used as a legitimate alternative to government money. The outcome of the current hearing is likely, then, to go a long way to establishing the future of virtual currencies on a world basis.