The Bitcoin war that’s been going on between companies and authorities looks more like a soap opera than a true conflict, but the consequences can be real.

After the most recent episode, which happened when the Department of Financial Institutions of California issued a ‘cease and desist order’ against the Bitcoin Foundation, the team at Bitcoin Examiner decided to request an opinion regarding this matter and we invited Adam B. Levine, the founder and editor-in-chief of Let’s Talk Bitcoin!, to answer some questions.

Meanwhile, the Bitcoin Foundation has issued a well-structured letter answering to the Californian authorities. We’re still waiting to see how this situation will play, but for now you can check our interview below.

Is it valid to disturb the work of an institution like the Bitcoin Foundation, which deals with donations, because they’re not following money-transmission law? Or do you think this is happening just because the institution is using this money to promote Bitcoin?

Adam B. Levine – The only real answer here is it’s a mess. It’s easy to dismiss the action from California because it sounds odd, but the man who signed his name on the letter was the man who actually wrote the law. You’ve got to imagine they know what they’re talking about, so the question is: why do they think they have a case? The situation is confused to say the least, it’ll be up to the lawyers to figure it out.

Experts are saying that orders and warnings like this one will multiply in the next weeks and months in the 48 North-American states where this kind of law is active. Do you believe in these predictions?

I think it’s risky to be an exchange or any business that comes in contact with the trade of local currencies and Bitcoin. For normal merchants, it would be a little heavy-handed to start issuing boilerplate cease-and-desists to any business that works with cryptocurrency. I really don’t see it happening, but for exchanges the situation is very different.

Mt. Gox, for instance, seems to have “succumbed” to the authorities’ pressure. Was it a positive step for the exchange platform?

I’d challenge the question a little, Mt.Gox desperately wants to be compliant. It’s not like they’re some outlaw organization standing up to for the privacy of their customers. DHS dinged them on a technicality, a three year old bank account disclosure that was not wrong at the time it was signed. Until the FinCEN guidance, nobody thought Mt.Gox was a money transmitter. Or, for that matter, that the authorities thought Bitcoin was money.

All of this is terrible for their business: Mt.Gox previously controlled more than 80 percent of the Bitcoin trade, but that number is dropping faster now than any time in the two years I’ve been watching. They desperately want to comply so things can get back to normal. Except it’s hard to comply when the rules are subject to change at any moment.

Do you think that the USA sees Bitcoin differently than the rest of the world?

The USA is a more financialized economy than many other parts of the world, so from certain corners there will be an incredible reticence to look at the technology as anything other than a joke. After all, they have much to lose. Regardless of attitudes, it becomes clearer every day that Bitcoin is so revolutionary because it is a currency that treats all participants as equals, applying the rules to every user just the same. In the world of money, this is a unique and very powerful trait.

Do you think the state regulators have the intention of, eventually, shutting down Bitcoin? Although FinCen, for example, has already guaranteed that they aren’t trying to terminate cryptocurrency.

It’s a fine line to walk. With software technology, you can’t just make something illegal and expect people to listen. Peer to peer file sharing shows us that attempts to destroy services that enable this may succeed in destroying the service, but the underlying technology bubbles up in a more resilient and hard to engage form, often multiple.

If a guy wanted to kill a new technology that was poorly understood, the key is to stoke the natural fear of the new with an uncertainty of legality. It is better to stall for as long as possible, setting law to paper, because once the parameters are understood it’s possible to immediately take action. Even onerous regulation is no challenge given enough money, but uncertainty about future regulation with the knowledge it’s coming and it might be bad because makes it very difficult to commit. I can’t read minds, but I would play the slow game.

What are your expectations for Bitcoin in the future?

I think it will change everything, or be the boarding mechanism for the technology that does. It’s not so much Bitcoin, as the community that has sprung up around it. The smartest people I’ve ever met, passionate and capable. We’re building a better world, the technology is just the tool. Bitcoin is a good tool, but not the only or the last.