'Virtual' Currencies Draw State Scrutiny
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State banking regulators are scrutinizing companies that let people buy and sell virtual currencies such as bitcoin, and some are looking at requiring costly licenses, according to people familiar with the efforts.
It is the latest sign that the freewheeling world of virtual currencies is about to get less free. Just this week, prosecutors claimed to have exposed a $6 billion money-laundering ring that allegedly relied on them.
"Virtual" currencies can be used just like dollars among people who agree to accept them. One big difference is that they aren't backed by a government. Instead, bitcoin enthusiasts say, the currency derives its value from its limited supply and the support of the people using it.
In the past three months, the Treasury Department, prosecutors and now state regulators have taken aim at virtual-currency exchanges, telling them they must follow traditional rules aimed at thwarting money-laundering. The lightly regulated currencies have caught the attention of people who allegedly use some of them to mask profits from illegal activities.
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