A former federal prosecutor turned Bitcoin proponent has revealed that her boss at the U.S. Attorney’s office asked her to look into shutting down Bitcoin.

The year was 2012 and Katie Haun, then a federal prosecutor with the U.S. Attorney’s office, didn’t know anything about Satoshi Nakamoto’s Bitcoin – until she was asked to investigate and “take down” the world’s flagship cryptocurrency.

“They said ‘we have this perfect assignment for you’ – there’s this thing called Bitcoin and we need to investigate it,” Haun recounted in a recent interview with CNBC.

“That was the first time I’d ever heard of Bitcoin,” she added.

At the time, Bitcoin was little more than an obscure payment method that was, in many cases, being used to purchase illegal goods and services on online black markets.

The DOJ’s plans go awry

While the U.S. Department of Justice’s (DOJ) goal may have been to shut it down, after researching Bitcoins and its underlying blockchain technology, Haun quickly decided that it wasn’t the cryptocurrency itself that needed probing, but rather the people using it for illicit purposes.

She began to view Bitcoin the same way she viewed cash – it could enable criminal activity but it wasn’t, in and of itself, responsible.

“It would have been akin to saying ‘let’s go prosecute cash,’” Haun said.

So instead of working to crush Bitcoin, Haun and her department prosecuted cases where the cryptocurrency was being used for extortion, money laundering, and other white collar crimes.

Ironically, the blockchain technology that the DOJ would have quashed in its desire to crush Bitcoin actually proved to be instrumental in helping Haun solve many of her cases.

“The government was able to use that same technology to actually track down criminal activity it might not otherwise have been able to,” she said.

“Without the technology underlying bitcoin, we never would have been able to catch those people.”

In fact, one of Haun’s highest profile Bitcoin-related cases was a highly publicized corruption case involving two federal agents assigned to the Silk Road task force.

Ex-secret service agent Shaun Bridges was convicted of obstruction of justice and money laundering after he used a Silk Road admin account to steal close to 20,000 bitcoins – worth more than $170 million at current prices.

Former Drug Enforcement Administration (DEA) agent Carl Force was convicted of the same charges – as well as extortion – for “illegally soliciting Bitcoin payments” from Silk Road creator Ross Ulbricht during the course of the investigation.

A force to be reckoned with in the crypto space

Since her days as a federal prosecutor, Haun has grown to become a staunch cryptocurrency and blockchain enthusiast and a much sought after expert in the industry.

In 2015, Haun formed a “digital currency coordinator” task force designed to educate and update other prosecutors and federal agents.

She also began hosting training seminars for the IRS, Treasury Department, and other federal agencies.

Haun further expanded her role as an educator, teaching classes in cryptocurrency at Stanford Law School and, later, Stanford Graduate School of Business.

In June 2017, Haun joined the board of directors at U.S.-based crypto exchange Coinbase and is currently a general partner at venture capital firm Andreessen Horowitz where she co-heads its $350 million cryptocurrency fund.

U.S. officials rail Bitcoin and Libra

While Haun is working hard to increase awareness and understanding of cryptocurrency, there remain many in the U.S. government who are still vehemently against it.

U.S. President Donald Trump unloaded on cryptocurrency back in June, tweeting that crypto assets are not money and can only be used to facilitate unlawful behaviour.

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity…. — Donald J. Trump (@realDonaldTrump) July 12, 2019

U.S. Treasury Secretary Steven Mnuchin also said recently that Bitcoin and other cryptocurrencies are a threat to national security.

“This is indeed a national security issue,” Mnuchin told reporters at a press conference in July, adding that “cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,”

Similarly, Brad Sherman, a Democrat member of the U.S. House of Representatives, has made it clear that Project Libra is a more significant threat to the U.S. than Osama bin Laden.

What’s more, two U.S. Senators have publicly warned payment processors, including Visa, Stripe, and Mastercard, to disassociate themselves from the Libra Association.

Emerging voices of reason

In the face of all these setbacks, there are still members of the U.S. government that share Haun’s view and believe in the potential of Bitcoin and other cryptocurrencies.

In the wake of the July 18th Congressional hearing on Facebook’s Libra cryptocurrency, Rep. Patrick McHenry (R-NC), Republican Leader of the House Financial Services Committee, told CNBC’s Squawk Box that “you can’t kill Bitcoin.”

“We should not attempt to deter this innovation, and governments cannot stop this innovation. And those that have tried have already failed,” he said.

The following month, former White House Chief Strategist Steve Bannon declared that cryptocurrencies have a bright future.

“Bitcoin and cryptocurrencies could play a crucial role going forward, particularly in this global populist revolt.”