June 21, 2011 at 15:53EFF explained why it stopped accepting bitcoin
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For several months, the Electronic Frontier Fund has been supporting the movement around Bitcoin , an electronic payment system that calls itself “the first decentralized digital currency.” We informed the members of our organization about this unique project in our blog and for several months we experimented with accepting donations via Bitcoin to a wallet that others have opened for us.
However, we recently removed the Bitcoin option from the list of possible donation methods on the EFF website and stopped accepting Bitcoin. This decision has been made for several reasons.
1. We do not fully understand the complex legal issues that accompany the creation of a new currency.Bitcoin raises unexplored legal issues related to securities laws, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And this is only in the USA. Since the EFF often advocates for people caught in the legal web due to the use of new technologies, we do not want the EFF itself to be the subject of such proceedings. Since there is no precedent on this subject and the legal consequences are rather unclear, we are worried that accepting Bitcoin coins by us may lead to a possible trial.
2. We do not want to mislead our sponsors.When people donate to a nonprofit organization like EFF, they expect it to use the money for their business. But since the legal area around exchanging Bitcoin for cash remains vague, we are not comfortable spending the amount of Bitcoin that we have already collected. For this reason, we list all available BTC, as well as all BTC that we receive in the future, to the Bitcoin Faucet wallet (a service for free distribution of bitcoins), so that they can continue to circulate in the community. We understand that we cannot close a wallet that is published to receive money to EFF, and that returning donations to specific senders is a complicated procedure.
3. People could misinterpret the fact of our acceptance of Bitcoin.We were alarmed that some people could take part in the Bitcoin project specifically for the reason that the EFF accepts BTC, and therefore they believed that investing in BTC was safe and risk free. Although we supported the Bitcoin movement with a high degree of interest, EFF never recommended Bitcoin. In fact, we generally never recommend any type of product or service - and Bitcoin is no exception.
We are grateful for the support that we received from the Bitcoin community and we share the community’s desire for privacy and innovation. We also understand and share their sense of frustration over privacy issues in existing online payment systems. However, EFF will no longer accept or spend bitcoins.
However, we recently removed the Bitcoin option from the list of possible donation methods on the EFF website and stopped accepting Bitcoin. This decision has been made for several reasons.
1. We do not fully understand the complex legal issues that accompany the creation of a new currency.Bitcoin raises unexplored legal issues related to securities laws, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And this is only in the USA. Since the EFF often advocates for people caught in the legal web due to the use of new technologies, we do not want the EFF itself to be the subject of such proceedings. Since there is no precedent on this subject and the legal consequences are rather unclear, we are worried that accepting Bitcoin coins by us may lead to a possible trial.
2. We do not want to mislead our sponsors.When people donate to a nonprofit organization like EFF, they expect it to use the money for their business. But since the legal area around exchanging Bitcoin for cash remains vague, we are not comfortable spending the amount of Bitcoin that we have already collected. For this reason, we list all available BTC, as well as all BTC that we receive in the future, to the Bitcoin Faucet wallet (a service for free distribution of bitcoins), so that they can continue to circulate in the community. We understand that we cannot close a wallet that is published to receive money to EFF, and that returning donations to specific senders is a complicated procedure.
3. People could misinterpret the fact of our acceptance of Bitcoin.We were alarmed that some people could take part in the Bitcoin project specifically for the reason that the EFF accepts BTC, and therefore they believed that investing in BTC was safe and risk free. Although we supported the Bitcoin movement with a high degree of interest, EFF never recommended Bitcoin. In fact, we generally never recommend any type of product or service - and Bitcoin is no exception.
We are grateful for the support that we received from the Bitcoin community and we share the community’s desire for privacy and innovation. We also understand and share their sense of frustration over privacy issues in existing online payment systems. However, EFF will no longer accept or spend bitcoins.