In the midst of the IRS’s legal battle to uncover the identities of Bitcoin users, federal prosecutors have revealed that a state prosecutor’s office had to battle for its own private information, also involving Bitcoin. Pennsylvania’s Allegheny County District Attorney’s Office apparently paid a Bitcoin ransom to protect the privacy of its owninformation. The amount of the ransom was relatively small, only $1,400 in good old dollars. But it’s still remarkable seeing a government entity paying a ransom, and even more so in a digital currency such as Bitcoin.

One can imagine that some Coinbase users would gladly pay a ransom (if they could) to avoid the IRS finding them, and auditing them! Then we could talk about whether paying ransom should be tax deductible as a business expense. In this case, though, it was the government paying ransom. One wonders if this was all some kind of retaliation. – READ MORE