Faith in the virtual Bitcoin currency continues to drain following multiple heists and hacks of users' digital wallets. The latest bad news comes from the Electronic Frontier Foundation (EFF), a digital rights advocacy group, who stopped accepting Bitcoin donations on Monday citing "complex legal issues" that they didn't want to get into. The move at first glance seems odd for the San Francisco-based nonprofit, which champions the preservation of anonymity on the web and has supported peer-to-peer networks like LimeWire in the past.
Heralded by some as the future of digital currency, Bitcoin dipped in value after hackers brought down Mt.Gov, the world's largest marketplace on Sunday--an indication that the experiment was in its death throes according to Forbes blogger Tim Worstall.
Likewise, EFF sounds very skeptical of Bitcoin's future in explaining their reasons for halting Bitcoin donations:
1. We don't fully understand the complex legal issues involved with creating a new currency system. Bitcoin raises untested legal concerns related to securities law, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And that’s just in the U.S. …
2. We don't want to mislead our donors. When people make a donation to a nonprofit like EFF, they expect us to use their donation to support our work. Because the legal territory around exchanging Bitcoins into cash is still uncertain, we are not comfortable spending the many Bitcoins we have accumulated…
3. People were misconstruing our acceptance of Bitcoins as an endorsement of Bitcoin.We were concerned that some people may have participated in the Bitcoin project specifically because EFF accepted Bitcoins, and perhaps they therefore believed the investment in Bitcoins was secure and risk-free. While we’ve been following the Bitcoin movement with a great degree of interest, EFF has never endorsed Bitcoin. In fact, we generally don’t endorse any type of product or service – and Bitcoin is no exception.
On that last point: EFF had previously been one of the most prominent organizations to accept Bitcoin. In January, the 21-year-old non-profit called the virtual currency "a step toward censorship-resistant digital currency," and said that while it would face an uphill legal and technical battle, Bitcoin could fill the "need for decentralized [a] currency system." The previous month, EFF went so far as to include Bitcoin in a call to action against censorship, a declaration that named the virtual currency as a "corrective action" that digital activists could take in order to "improve the security and availability of the internet."