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How Bitcoin Sales Of Guns Could Undermine New Rules

Bitcoin Guns

First Posted: 04/15/13 EDT Updated: 04/15/13 EDT

Even as Congress debates gun safety legislation, a flourishing new virtual currency could provide a way around new restrictions by enabling people to buy guns online almost anonymously.

Bitcoin, the currency that exists only on the Internet and is backed by the confidence of its users, rather than a government or bank, makes it easier for people to buy weapons online without detailed records of those transactions, potentially bypassing new rules put in place by lawmakers to track firearms sales.

"Because the sales are anonymous, it's certainly a challenge to the idea of universal background checks for gun purchases," said Robert J. Spitzer, a professor of political science at SUNY Cortland and the author of four books on gun policy.

Bitcoin has captured mainstream attention after its value soared from as little as $25 two months ago to as much as $260 this week, before falling to $54 on Friday. Some analysts have attributed its rising value to the banking crisis in Cyprus.

People buy bitcoins with cash and use them to trade goods online. Bitcoin transactions are nearly untraceable, making them the preferred currency of some online gun dealers.

Several websites that sell firearms only accept payment in bitcoins, but they are not easy to find. Most reside on what is called the "Deep Web," or sites that can only be accessed via Tor, a special browser that shields the identities of users.

Nicolas Christin, who has studied online black markets, said buying guns with bitcoins is the online equivalent of purchasing weapons on the street because there's no digital paper trail left behind.

"It's a lot easier to maintain some level of anonymity with bitcoins," said Christin, the associate director of Carnegie Mellon's Information Networking Institute. "It makes it more difficult for someone looking into this to identify the participants of a transaction."

"What you're dealing with are people practicing an extreme form of libertarianism who believe in completely unregulated sales of everything, and that's including guns," he added.

The Armory, one online firearms dealer that sold guns, ammo and explosives, described itself as "an anonymous marketplace where you can buy and sell guns without revealing who you are," according to Gizmodo.

"We protect your identity through every step of the process, from connecting to this site, to purchasing your items, to finally receiving them," the site said.

Last August, The Armory shut down because it didn't generate enough business, according to the site's administrator. But several other online gun dealers are still operating.

One such site, Black Market Reloaded, listed 291 weapons for sale on Friday, from fireworks to guns to explosives. A semi-automatic pistol with a silencer was on sale for the bitcoin value of about $2,500, even though federal law restricts the sale of silencers.

An email to the site's administrator was not returned.

Another site, Executive Outcomes, featured a Barett M82, which was on sale for $5,500 in bitcoins and was described as "one of the most powerful guns in the world."

"We make sure that your firearm is not serialized (we remove the serial and refill with metal), the paperwork is not tracable OR suspicious, and that the firearm is new and unused for optimum performance," the site says.

Executive Outcomes, which says it is based in Texas, only accepts payment in bitcoins "because only bitcoins guarantee full anonymity," the site's administrator said in an email.

"In general, we are trading illicit goods and [bitcoin] is enough to remain anonymous," said the administrator, who did not reveal his name and said he did not conduct background checks on buyers. "I assume that it is impossible to track the transaction in bitcoins."

BitcoinGunParts.com says it was founded last year "to supply the American firearms market with items for sale in bitcoins." The site sells gun triggers, barrels, magazines and other gun parts and deletes all customer records after 30 days.

"We only offer the bitcoin community the opportunity to pay for items in a more convenient and evolved online payment processing system," the site says.

An email to the site's administrator was not returned.

To be sure, someone with a criminal record could acquire a gun through other means, like asking "straw purchasers" who can pass background checks to buy weapons for them.

But Bitcoin adds another layer of anonymity to the online gun market, potentially making it more difficult to identify the buyer of a gun linked to a crime, Christin said.

If Congress enacts new regulations on gun purchases, "you would definitely see an increase in demand for these kind of sites," he said.