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Bitfloor Indefinitely Suspends Bitcoin Trading
PerformanceDude writes "Bitfloor (a New York-based online exchange for Bitcoin) yesterday made the following announcement on their website: I am sorry to announce that due to circumstances outside of our control BitFloor must cease all trading operations indefinitely. Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of USD deposits and withdrawals as we have in the past. As such, I have made the decision to halt operations and return all funds. Over the next days we will be working with all clients to ensure that everyone receives their funds. Please be patient as we process your request. Roman — bitfloor.com" According to the company's Twitter account, money should be returned to users' bank accounts shortly.
Sounds like the govenrment finally decided they didn't like money outside their control.
>> US bank account is scheduled to be closed
Clearly this is the work of the Illuminati Lizard People.
Bubble burst time
Bitcoin is already down to $90, where is that $1000 bitcoin troll at now?
Money has to at least be a short term store of value. If bread costs twice as much in the evening as it does in the morning no one will want your currency. Bitcoin is not doing well on that front. I am sure all the early folks are cashing out now and laughing all the way to the bank though.
Why was their bank account closed? Did they break some law or did the bank just take offense to them?
What's is the story here?
It's your cousin, my business had to shutdown. Let's go bowling
Roman -- bitfloor.com
> Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of USD deposits and withdrawals as we have in the past.
Is it me or is that the most understated sentence ever written?
Bifloor? Or Bitfloor?
Bitcoin is already down to $90, where is that $1000 bitcoin troll at now? ... [all the early folks are] cashing out now and laughing all the way to the bank though.
Sounds like you just answered your own question.
My work here is dung.
There is no conspiracy here. No one cares about this toy money. They broke already existing federal anti-laundering laws so this happened. They could have followed the law and been able to stay open.
If the U.S government wanted to close his account, they would have done it, not scheduled it. I smell fish!!
going to indefinitely suspend its bitcoin stories?
Sheesh, evil *and* a jerk. -- Jade
You do know it went past $250 USD for a while, yeah?
You can tell how powerful someone is by the magnitude of the crime they can commit and be able to get away with.
No one would care.
It would only hurt themselves. It would be an improvement to society at large to stop wasting valuable resources on this.
Whoosh!
No sig today...
PayPal and Facebook broke those laws for a long time too. The only difference between Bitcoin and PayPal is that "nobody owns" Bitcoin, do it can't claim the government is damaging business.
They could have followed the law and been able to stay open.
Like HSBC?
SJW n. One who posts facts.
Too big too fail.
If you get big enough you can get away with anything.
All the time, our customers ask us, "How do you make money doing this?" The answer is simple: Volume. That's what we do.
How did facebook do that?
Paypal I think has a good handle on those. They are pretty strict, too strict even, about large transfers.
Closing the bank account of someone not following money laundering laws is not an attack of any kind.
If any of those exchange are going to occur in the US by US based companies the same regulations will apply.
If it's going to be used as a currency, I would rather have it stay $20 for a long period of time than have it jump up to $90. Now, if it stays around $90 for the next year, that would be good. Then I could use it to buy and sell stuff.
The Moore-Murphy Law: The number of things that will go wrong will double every 2 years.
There is no conspiracy here.
I find it curious that you post so much BS to Bitcoin threads that I actually recognize your handle at this point.
No one cares about this toy money.
Even a speculative bubble doesn't hit $90 if "no one cares" about the underlying asset. Quite the opposite - So many people have an interest in Bitcoin, whether legitimate or speculation, than its market capitalization last week qualified it as a mid cap (and it still plays in the same ballpark despite the post-$250 sell-off).
They broke already existing federal anti-laundering laws so this happened. They could have followed the law and been able to stay open.
You have made an assertion about a company's business practices without a shred of evidence. They may have violated money laundering laws. They may have used the wrong type of account (ie, personal checking) for running a business they didn't expect to grow so fast. They may simply have scared a bank that wanted nothing do with Bitcoin (much like the EFF's stance on Bitcoin donations) simply because it would distract them from their core mission. You know nothing about which of those, or dozens of other possibilities, actually happened.
Stick with (incorrectly) calling it a pyramid scheme - At least that, not having an immediate victim of your accusation, doesn't count as libel.
"Closing the bank account of someone not following money laundering laws is not an attack of any kind."
No charges have been laid, let alone anyone guilty of them. It's interesting that Paypal is essentially the same thing, a token exchange, and yet perfectly legal it seems since nobody closed their account. Paypal can be used for US to US accounts too.
So yes it certainly is an attack.
I hadn't taken it seriously before, the last time I looked it was $20 and I thought it would disappear over time. Yet here we are, $90, bank accounts of one trader under attack. Time to take a closer look at this me thinks.
You do realize that aside from a physical note the USD is a virtual currency as well right?
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
The two are different orthogonal concept.
The point of Money Laundering is to make so the government loses track of the money.
At the end you still got a standard money which is controlled by a government (USD, EUR, or whatever). But along the way you jumped through so many hoops, and take a so complicated path, that it's not possible for the government to follow the path and have a clear idea where the money came from.
It's about lying and covering your source.
If you want a slashdot-friendly mental image: think of this like onion routing - at the end of the day you don't know who is communicating with whom, but government can still eaves drop the (now anonymous) traffic at the end-point.
The point of bitcoin is make a money which isn't controlled by the government (and by no other government). Think of it as a foreign currency, except it's a "special" currency which isn't controlled by any government, and also is defended not by laws but by strong cryptography.
You could pretty document every transaction you've performed to you government, and government couldn't do much about it, because bitcoins fall outside of their jurisdictions, they can't control it. (Just as they couldn't do much about what you do with a foreign currency).
In term of internet metaphor, think about end-to-end encryption: you see that both endpoint are communicating, but you can't interfer with the exchange itself.
Now of course this is theory. In practice, the middle steps of money laundering can benefit of a uncontrollable intermediate to make it harder for the government to track it.
And on the other side, bitcoins have some level of secrecy/untraceability built-in.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Go research the highs and lows of some beanie babies - then tell me how beanie babies are a legitimate currency with a market captalization etc etc etc.
This is exactly what happened to the other major exchange based in California about 2 years ago. Their bank accounts were closed due to banking secrecy act violations when they just barely reached the volume limit that the US gov set for that law. Obviously the feds were waiting for that to happen and gave them zero warning.
In this sense it's like Gold, except:
* probably more vendors take BitCoin than gold as payment (i.e. both gold and BitCoin have some value as a currency/barter, and BitCoin may actually have more, but neither is primarily a currency)
* You can't make jewelry, do dental work, or make Monster Cables with BitCoin (i.e. unlike the shiny metal, it has no inherent value)
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
USD = fiduciary money. Bitcoin = non-fiduciary, just like gold. Und just like with gold, bankers hate it when you deal in non-fiduciary currency. The influence of banks upon national governments being so scandalously high these days, this news is not so surprising: banks thrive on fiduciary currency only. Or, to quote Jefferson:
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
Nope, the US government didn't bail them out. :(
Change is certain; progress is not obligatory.
The money supply does not have a direct relationship to GDP. A high-velocity currency (one that trades hands frequently instead of being stored) will have a low value in relation to GDP. A low-velocity currency would behave the opposite.
When reporting the size of the money supply, you will see references to M0, M1, MB, and M2. They are different ways of measuring the supply and are used for different purposes.
Try looking at a yearly or lifetime graph. $90 isn't the mean, it's the denial phase before it drops back down to the real mean, which is 20-25. Though we may get a double bubble if enough people believe 250 is a sign of its legitimacy.
Charisma is the measure of someone's ability to lie with a straight face.
I suspect it was Transaction Reporting requirements, along with Know Your Customer regulations that did them in. The government doesn't care if you are shoveling Benjamins, BitCoins, Euros, Pesos, or British Pounds, across the counter or over the wire... if you want to trade in heavy quantities of Cash or Cash Equivalents, you have to comply with money laundering laws. If their bank felt they could not keep the account open and still comply with those laws... ker-chop!
Did the fact that BitCoins were being traded have something to do with it? You bet. But they would have been equally eager to shut down an operation dealing with physical currency and numbered accounts... they don't like anonymiity combined with large volumes of untracable cash.
Banks don't hate BitCoins (or gold) because it's non-fiduciary... it's because it's a Pain In The Ass to deal with. Banks are more than happy to let an independent entity (as in, not them) deal with BitCoin transfers and storage if they so choose. Agreeing to accept deposits in BitCoins (which due to their volatility are currently utterly incompatible with fractional reserve banking) is a task that would earn them only tiny transaction fees... it's simply not worth the bother.
Maybe they just decided they can't make money on this?
Despite their recent problems, it looks like Mt.Gox is back online...they claim to handle over 80% of BC trade...
How is Bitcoin exchange any different than Baseball cards? You are just exchanging a product with someone else. Sure, it is a virtual product, like a game, but it is still a product. They aren't saying "this product is worth $90"...the market is saying "this product is worth $90".
Having a virtual currency isn't prohibited.
It seems obvious to me exactly what is going to happen. If I'm wrong, well, good for all those who got into bitcoins.
Sometime within about 1 year from now, someone is going to hack bitcoin. Either
a) The goal will be simply to destroy it and render it worthless.
or
b) The hackers will make a lot of money before bitcoin in rendered worthless. Before anyone realizes what is going on and can stop the hackers, bitcoin will have been ruined.
The end result in both is that bitcoin will be rendered worthless. This attack or hack will be in a way that nobody saw coming, but after the fact everyone will slap themselves in the head and think "How did we not realize that this was possible?" I am not claiming to have any idea how this will all happen. I simply predict it will happen.
When this happens, people like me, Steve Forbes and others will say "Told you". The "true believers" (the anti-government nut jobs) will erroneously conclude that the entire idea was perfect and if they only fix the specific nature of the attack that destroyed bitcoin, then bitcoin2 will be able to start up and it will never, ever be compromised. Right.
Correct... banks do not like to deal in large cash volumes (it's expensive, for starters.) However, those businesses for which it makes sense to have a large cash intake still do have access to the banking industry, although a closer eye is kept on them than customers that don't move large cash volumes.
A bank providing services to a BitCoin exchange? Neither the bank nor the exchange has any flipping clue where the BitCoins came from, and unless the exchange sets up a mechanism to find out, then yes, the bank is going to drop the exchange for fear of running afoul of Know Your Customer rules. A few large cash transactions running through the exchange and a whole lot of "I dunno" answers leads to all sorts of uncomfortable meetings with regulators.
You could also add the Liberty Dollar to that list.
I think Bitcoins are more like Diablo or WOW equipment. Purely virtual objects that people trade real money for.
The more people I meet, the better I like my dog.
That's because the desperately don't want to be classified as a "Bank" and have to follow rules to give you your money. When PayPal was founded your money "inside" PayPal was as legit as Bitcoins... How many "tough luck" articles did we used to have about people having money outright stolen from PayPal accounts back in the day?