The below is scary because if the TSA follows through with this they can stop anybody at anytime anywhere to ask questions of them about this virtual currency which can exist everywhere and nowhere all at once.
From the Daily Anarchist “The TSA is looking for Bitcoin”:
Posted: 24 Feb 2014 09:02 AM PST
It seems like every time I fly I have an interesting interaction with the TSA. I make it a point to always opt out, and if possible always strike up a conversation with the man molesting me. But yesterday was by far the most frightening, as well as cautionary for Bitcoin users. I’m going to begin simply by relaying the facts as observed, including some that will seem insignificant at first. Then I will provide some analysis, as well as speculation what’s going on here. What’s absolutely clear is that the TSA is looking for Bitcoin, and Bitcoin users need to be conscious when they travel, especially internationally.
I was flying out of Manchester, on my way home from the New Hampshire Liberty Forum. By coincidence I ran into Bill Buppert from ZeroGov.com and his wife while checking my luggage. And we happened to be taking the same flight. I met Bill last week at the Freedom Summit in Arizona, spent time with him again at Liberty Forum, and we have become fast friends. Without his help, I’m not sure what would have happened to me.
I was wearing my Bitcoin Not Bombs hoodie which features an image of a B17 bomber dropping Bitcoin from its bomb bay doors. The sweatshirt does not feature the words “Bitcoin Not Bombs” only the image.
We approached the TSA screening and began to put our things in the gray bins. My things required two bins. One for my backpack and shoes, and the other for my laptop and phone. I asked the greeting officer to point me to the opt-out line. Bill immediately told the agent that he would also like to opt-out, and he thanked me for making that choice.
Bill went first, but I was told to stand right beside him. Bill’s strategy is very simple, and effective. He plainly told the officer, “I understand, but please don’t touch my dick.” This immediately perturbed the agent, a man named Tinker, which was the only name badge I saw clearly. Tinker immediately called over a superior officer.
Bill continued to converse with Tinker, however I could not make out the conversation as my pat down had begun. His name began with a Y, and looked Russian in origin, but I cannot say with certainty what it was. Y asked me to identify my property in the gray bins, then he placed it right in front of me and asked me to keep an eye on it for my own peace of mind. He emphasized watching my property three times, which they don’t usually do. I appreciate that, but I didn’t say so. I try to say as little as possible.
A moment later a plump female agent told me she had to pull my backpack aside for further inspection. She asked if I would like to be present for that inspection. I said, “If I have a choice, of course I would like to be present when you search my belongings.” She replied “Of course you have a choice” which struck me as odd, since I had virtually no choices during most of my molestation. She picked up my backpack and began to leave with it.
I protested. “Wait! The other agent instructed me to keep an eye on my property. How can I do that if you put it in two different places?” The choices ended there. She informed me that she would watch my backpack while I was patted down, and I could watch her inspect it when Y was finished.
Y began to give me the standards speech he is required to give by law. I said I didn’t want a private screening, to which he responded, “If you are uncomfortable in any way, at any time we can stop and move to a private screening.” Apparently being made uncomfortable in private is somehow better.
When he explained that he was going to put his hands on my inner leg and move upward toward my torso until he “met resistance” I said, “If that’s all it takes I’m ready to resist now.” He paused, but only repeated the line finishing with “Believe me, I am as uncomfortable with this as you are.” That was my hook. I always prefer an appeal to humanity over an appeal to law. When an agent reveals something human about himself that is the area I like to explore. Y was uncomfortable. So, I asked him why he was uncomfortable. He said, “Why would anyone be comfortable doing this?” I replied, “I just find it interesting. I’ve never heard an agent say that before.” He said, “Well, we’re not all part of the security club around here.” The term struck me as strange, “the security club.”
He continued for a bit. Putting his hands in my pants and cupping my butt. Then I asked, “Did you work here before they implemented this policy?” He said no, that he had only been there a short time. He had been training to become a pilot, but that the government sequester meant that this was the only job available to him in aviation. He hoped to get out as soon as he found another opening. I wish I could remember this part of the conversation more specifically, but the names of the licenses and agencies that contributed to him being stuck in this job went by very quickly. The next thing I clearly remember is him saying, “There are a lot of us who are not on the security track. There’s a girl here waiting to be chemist.” Another interesting term, “the security track.”
I decided not give him any more flak. I thanked him for sharing with me, and wished him the best of luck becoming a pilot. He responded by wishing me luck in whatever my pursuits were, and after checking the swabs for chemical explosives, he cleared me for my enhanced backpack inspection.
The plump woman was very nice. She explained that there was a lot of metal in my bag and she needed to confirm what it was. I was carrying a few hundred metal lapel pins from ShinyBadges.com that I’d been selling at the conference. She began to remove my inventory, which was stored in clear plastic tubes each containing about 50 pins. 5 tubes in all, plus a blue display case with about another 50 pins. The pins were clearly visible without opening these cases with the exception of one. I had an opaque white plastic container which held about 100 pins. I had used it to deliver custom pins to Mandrik from Blockchain.info, and he returned it when he was finished. It had the Blockchain “B” logo drawn on the outside, which is similar to the common Bitcoin “B” logo, but not the same. I had no visible bitcoin pins anywhere in my inventory. I sold out of them at the conference, and had only a small quantity of Blockchain pins in the opaque container. I also had no Bitcoin related flyers in my bag. I had given them all to other activists to bring home to their Bitcoin meetups.
The plump agent put all my containers in a separate gray bin to be screened again. She asked “Do you have any coins in these?” I replied, “No, why?” and she answered, “I just want to make sure you don’t have anything valuable.” Actually,” I replied “those are all valuable to me.”
She took both the bin with my backpack, and the bin with my inventory back to the front of the TSA screening area. I attempted to follow her, but was quickly cut off another male agent with a large imposing figure. “You can’t go that way. Stay here.” I protested, “The other agent instructed me to keep an eye on my property.” The plump woman continued out of sight and and large agent told me I could stand in the area where people were putting their shoes back on. I could not see my property from there.
The plump woman returned, swabbed the inside of my backpack for chemical explosives, and said I was clear to leave. She offered to help repack my bag, but I said I’d rather do it myself.
Bill and his wife were sitting on a bench in the terminal waiting for me as I approached them. Then two men stepped between us, both wearing dress shirts, one orange and one blue. The orange shirt asked where I was traveling to. I replied “Earth.” This was not intended to be antagonistic. I usually reply that way when asked where I am from. It’s a product of my love for science fiction. He asked me to be more specific and I said, “The Northern part.” Admittedly snarky, but still not malicious. I didn’t know who these men were. I had already been cleared by security, and based on their attire and their forwardness I thought they might be other attendees of the conference on their way home. I was joking with them, like I do with most equals.
Then blue shirt said, “Just answer the question.”
Full stop. State speech is hate speech. I then noticed their name badges, but I didn’t have the forethought to commit them to memory. I responded, “Are you conducting some kind of an investigation, or do you have reason to suspect me of something?”
They identified themselves as “managers” and the orange shirt said he was obligated to inquire whether or not I was traveling internationally, which was not an answer to my question. I replied, “Am I obligated to answer your questions?” He replied, “If you are traveling internationally you are.” I replied, “Do you have any reason to suspect that I’m traveling internationally?” The orange shirt said “We’re the ones asking the questions here” and the the blue shirt asked to search my bag for my boarding pass. I told him that my bag was already inspected and didn’t contain anything dangerous, and that I didn’t consent to another search. He said until I was cleared by security he was free to search. I said I was cleared by security.
I was about to ask for my attorney, who happens to be my wife, when the orange shirt said, “What about Bitcoin?” I was flabbergasted. This was above and beyond any scrutiny I had ever received from the TSA, and a little frightening that they were looking for Bitcoin. I said I didn’t understand the question. He continued, “We saw Bitcoin in your bag and need to check.” I was incredulous, and asked, “Do you have a superior officer because I don’t think you know what you’re talking about.” The blue shirt replied by repeating that they were “managers,” but if I didn’t answer his questions he could call law enforcement and have me taken into custody. I asked, “Aren’t you law enforcement?” and he replied, “No we’re with the TSA.”
I turned back to the orange shirt and asked “What did the Bitcoin look like?” Bill chimed in and told the agent that what he was saying was impossible because Bitcoin is digital and doesn’t have have any physical manifestation. You can’t “see” Bitcoin. The orange shirt said they looked like medallions or tokens. I said I didn’t understand what he was talking about, and he simply repeated, in a child like way, that Bitcoins are like metal tokens. I told him that I didn’t have any tokens.
At this point I was beginning to panic and looking for a way out. Then the orange shirt said they needed to determine whether or not I was carrying more than $10,000, to which I asked how much cash he suspected I was carrying. I had about $300 in my wallet, 1.2 oz of silver in my pocket, and 4.20 Bitcoin accessible from, but not actually on my phone. I told them none of this. The orange shirt replied, “It depends how much Bitcoin you have.” I asked him what he thought a Bitcoin was worth, and he replied, “It fluctuates all the time.”
I was out of ideas. At that point I was certain I didn’t want to say another word. I thought they were ready to concoct some kind of money laundering charge. I began running scenarios in my head where I refused to unlock my phone for fear that they would construe my 4.20 Bitcoin as somehow worth more than $10,000. That’s when the blue shirt turned to Bill and his wife. He asked them if I was traveling internationally, to which Bill’s wife replied, “Not that I know of.” Then they turned and disappeared just as quickly as they had appeared.
I was shaking, and grateful that Bill and his wife were there, even just to bear witness. There were also other attendees from Liberty Forum in the terminal who came to observe, including one wearing a Bitcoin Not Bombs t-shirt. Once we reached our gate, and I calmed down, I began an audio recording as Bill and I recounted the events as best we could remember. During that time the orange shirt walked by appearing to be looking for me, Tinker, the agent who patted down Bill, was stationed away from the TSA screening area and was clearly keeping an eye on me, and two police officers with black flak jackets and sidearms were hovering around the gate until we boarded.
I didn’t fully relax until we were in the air, because I’ve seen cases of security pulling passengers right out of their seat.
There is so much to say about this encounter. It really was a kind of perfect storm. If I wasn’t wearing the hoodie it probably wouldn’t have happened. If I wasn’t carrying my Shiny Badges inventory it probably wouldn’t have happened. And if I wasn’t such a snarky sci-fi geek it probably wouldn’t have happened. But all these things came together to reveal something spooky about TSA policy.
Briefly, with regard to the pat downs, it’s interesting that Tinker would call an superior in response to Bill, when he knew full well that his procedure would not change, and could not change. I suspect he was seeking an authority figure to absolve him of responsibility, as the Milgram experiment suggests. It’s also interesting that Y would suggest that agents within the TSA are factionalized. A “security club” of people on the “security track” who are distinct from those eagerly seeking other work, because they are uncomfortable molesting people.
Things really began getting weird when the plump agent asked if I had any coins. It seemed innocuous at the time, because I’m accustomed to TSA agents asking me to empty coins out of my pockets, but this was different. The baggage x-ray machines aren’t intended to detect coins, and US coins aren’t terribly valuable anyway. If she was looking for valuables “coin” is a strange word to use. The word “coin” is very tricky in legal tender land. I learned from the Liberty Dollar case that the word “coin” holds some kind of special magic in the eyes of the State, and to avoid running afoul of legal tender laws silver rounds should be referred to as “tokens” or “medallions.” Interesting too that those are the exact words the agent in the orange shirt used. Also “coin” has become the emerging standards for all crypto-currency. To a diabolical mind, this could be quite an entrapping question. In the future I won’t be answering it.
I gave the worst possible answer, no coins, but still very valuable. My thinking at the time was that everything I own is too valuable to be molested by a bureaucrat. Why would I carry something that wasn’t valuable to me? Value is, after all, subjective. In hindsight I should have said nothing. My standard position of saying nothing to a bureaucrat I don’t have to had been compromised by my desire for theater in the screening process. This was foolish. This question of hers, “Do you have any coins” was, in my opinion, a carefully crafted gotcha question, and not the idle banter it seemed at the time. I had forgotten the central tenant that everything a bureaucrat does or says is against you. Every question you answer is a weapon against you. I should have said nothing.
If my answers to, and questions of the “managers” sounded needlessly evasive to you, understand simply that for me the theater was over, and that I had reverted to my standard position. I do not answer the questions of bureaucrats without an attorney present, and neither should you. The moment I realized the managers were part of the security apparatus, and they had taken an interest in me, I was going to give them nothing I was not threatened into giving, and neither should you. Because every question you answer is a weapon against you. Any statement which turns out to be false, even by mistake, can be construed as a serious crime. And any statement which turns out to be true, even if seemingly insignificant, can be construed as evidence against you. Making any statement of fact is an unnecessary risk. In hindsight I should not have said that I didn’t have any tokens. If this turned out to be false due to some lapse in memory I would have been in more serious trouble, just as if my statement that I didn’t have any coins would have. But I was ready for this to be over, and looking for a way out.
Telling them that I was not traveling internationally was the way out, although I didn’t know that at the time. At least for now this $10,000 limit only applies to international travel. Once they realized I was not traveling internationally they lost all legal basis to continue their investigation, but they clearly still regarded me as a criminal. Otherwise, why would they continue to monitor me? They were searching for another legal basis to harass me.
Here’s what I think happened from their perspective. Obviously, the TSA has been trained, although poorly, to look for Bitcoin. They are apparently now trying to catch money launderers in addition to terrorists, and large tubes of tooth paste. My hoodie is probably what caught their attention, and everything after that received extra attention. When they saw all the metal lapel pins in my bag they probably thought they hit the jackpot on a stockpile of Casascius coins. Whatever training they had it probably included that stock photo of brass tokens everyone uses. My evasiveness only quickened their blood lust, as they imagined a big bust, and possibly a promotion down the security track.
It was an open faced lie when they said they “saw” Bitcoins in my bag. Always remember bureaucrats can legally lie to you, but lying to them, even by mistake is a serious crime they’ll use as leverage to coerce further cooperation. They didn’t inquire about my phone, or my laptop, or my USB drive, which makes me think their Bitcoin training wasn’t very good, or that these particular bureaucrats didn’t pay very close attention. But, if the TSA is going to be looking for Bitcoin, they can use that pretense to search any person, at any time, to any degree. It’s entirely possible that a traveler could be carrying thousands of Casascius coins which are not loaded, and worth little more their value in brass. It’s also possible that a traveler could be carrying one Casascius coin that has been loaded with hundreds of thousands of dollars worth of Bitcoin. Technologically speaking the private key to a Bitcoin wallet could be embedded in virtually any object, including the brain of the traveler. It could be argued, in fact I would, that the Bitcoin is already on both sides of the check point, and carrying any kind of physical wallet is no different from carrying a debit card, or a pin number. It would even be possible for a traveler outside the TSA screening area to send any amount of bitcoin directly to a traveler already inside the terminal, and there’s nothing the TSA can do to prevent that.
In the end it’s important for Bitcoin users to be aware of these Stasi tactics being used by the TSA. Maybe some Bitcoin users want to confront it directly with some kind of civil disobedience or demonstration. Maybe others will want to take extra steps to ensure they don’t face this added scrutiny. But this is what FINCEN meant when they said that Bitcoin could be regulated under existing law. They meant that the policy toward Bitcoin will be decided in secret, outside the legislature, by law enforcement bureaucrats reinterpreting old laws in new ways, to be enforced arbitrarily and inconsistently to evoke to greatest degree of doubt, confusion, and alarm.