Bitcoin Exchange Mt. Gox Halts USD Withdrawals

hypnosec writes "World's largest Bitcoin exchange, Mt. Gox, has halted U.S. dollar withdrawals of customer funds in the U.S., citing a need for system improvements. According to Mt. Gox, the exchange has experienced a huge number of requests for deposits as well as withdrawals from both established markets and new markets, following which its bank hasn't been able to process transactions on time. This led to difficulties for its overseas clients, especially those in the U.S. The exchange said that the deposits in USD, transfers to Mt. Gox, and deposits and withdrawals in other currencies will remain unaffected during this period. Mt. Gox will be resuming the USD withdrawals for its U.S. clients once the improvement of its systems is complete." Wired suggests the slowness may be due in part to reluctance from banks to get entwined with Bitcoin for a number of reasons. "The problem is that U.S. banks are afraid that doing business with Bitcoin companies might draw the attention of U.S. or state regulators ... This reluctance may be fed by the sense that Bitcoin poses a threat to the banking industry. Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees."

Comments

Re:thats what you get for being stupid

[The Second Horseman]

The steady erosion of Glass-Steagal through the 20th century, culminating in the 1999 GLBA which repealed sections 20 and 32 certainly had a big part to play in this. Without that, the interdependence effect we saw would likely not have occurred to the same degree.

The fact is, a lot of people in finance aren't bright enough - or cautious enough - to understand or care exactly what risks they're taking, especially with other people's money. To use an old analogy, the modern financial system is like the ferry service in an impoverished coastal country. Everyone uses it, because it kind of works. It's overcrowded, run by greedy people cutting corners, and every once in a while a ferry sinks, killing somewhere between 800 and 1000 people. But the next day, the rest of the identical ferries are out, and people are lining up to get on board because they don't have a choice.

At least after the S&L debacle, people got prosecuted. This time, they were let off the hook.