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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."
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You seem to believe the banking industry is over-regulated.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
You seem to be shilling that more incorrect regulation is the right way.
Science advances one funeral at a time- Max Planck
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for all their faults, ordinary banks, in general, do not like dealing with certain types of criminal customers.
there are a lot of checks and balances inside most banks regarding deposit accounts, and transfers between them. some of it is government regulation, some of it is just because banks dont like being ripped off or having their customers ripped off. no bank wants more regulation, but no bank wants to interface its internal systems to some fucking glorified drug-fencing operation. except maybe Wells Fargo.
everything that banks have learned for 500+ years about fraud would be thrown out the window here. it woudl be like the wild west.
if you want to interface your shit-hole experimental quasi-criminal fucktard financial system onto the First City Bank of Nowheresville, Kansas, then you need to just withdraw actual cash, and then give that cash to the bank. Don't try to fuck up grandma's soybean farm with this experimental bullshit.
now you of course want to say, look at all the de-regulation that caused the crash of 2008? well, none of that was really about bitcoin or ordinary banking activity, like deposit accounts. that 'normal banking' is still the fundamental piece of the banking system that has to act like a Water Utility in a modern society, allowing money to flow freely with a relatively stable value.
holy fuck. you realize that transferring trillions of dollars to millions of people, requires a shit ton of people to do stuff?
yes the system is corrupt - bitcoin would take that corruption to the maximum level.
The idea that banks are hesitating to do business with these exchanges because Bitcoin is posing as a "thread" is hilarious on it's face.
Ask any average person on the street what a bitcoin is and you will be greeted with nothing but blank stares.
People who use bitcoin and drive up it's value are living inside a reality distortion field of their own making. This supposed currency is going nowhere.
Wonder if WalMart's lawyers have looked into Bitcoin? They already handle prepaid CC and gift cards and have wanted more into banking for a while now. Lots of locations and a good chance they would offer lower fees. Bitcoin should work up a plan to submit to them to get talks started. Not sure how the regulations might handle it as far as the possibility of handling this through other countries that have regulations better suited to Bitcoin. Might make for some interesting court arguments too regarding the transactions electronically handled in the better regulations country.
If they are going to trade for real currency they really need to get recognized by the World Bank or whatever responsible bodies and recognized as one otherwise get listed as a tradable commodity.
Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme. Seems to me that if the banking regulations are keeping that sort of entity out of the market, they're doing exactly what was intended.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
That's a typical Mt. Gox excuse. "We're going to hold onto your money for some vague amount of time for some vague reason." Note that they're only stopping withdrawals from Mt. Gox, not inbound transfers. That's very suspicious. If they'd lost their banking relationship for wire transfers, they couldn't do inbound transfers either.
I've mentioned before that Mt. Gox's withdrawal limits are suspicious. They should be able to pay out 100% of funds they hold on short notice. They're not a bank, and are required by the Payment Services Act of Japan to have 100% of the assets entrusted to them. Even more suspicious is that as Bitcoin has grown, Mt. Gox withdrawal limits have become smaller.
If you have assets in Mt. Gox, get them out now. There are too many red flags about that business.
How do you get that? The entire body of his post is about unreasonable regulations and the costs involved with satisfying regulation requirements. Regulations that are keeping a Ponzi scheme out of the US marketplace.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
holy fuck, do you realize this will concentrate massive amounts of wealth inthe hands of a few people and make the thing either fucking worthless or some kind of bizarre luxury item?
you cant build a fucking coinage on a limited resource, its fucking idiotic.
This reluctance may be fed by the sense that Bitcoin poses a threat to the banking industry.
Or more likely from the sense it could draw the full weight of federal law down on them for facilitating money laundering.
Here's the thing though, those regulations came to be because crooks in the past abused the system.
Just look at what happened in '07 and '08 here in the US. The regulators let their guard down and we got this meltdown.
Yes, the side effect is that it raises the barriers to entry for competition which helps the incumbent firms, but it can't be all that good for them since they are constantly trying to get the regulations reduced - like when they lobbied very hard to get Glass-Steagall Act repealed - which added to the meltdown.
And frankly, when one has a hard time getting their money, that raises a red flag.
But can you withdraw Euros, or Pounds (Sterling) or Yen or Lunies ?
Bitcoins don't have free timely transactions.
Do transactions without a "tip" already take longer than an hour to get included in a block?
the entire purpose of Bitcoin was to eliminate all transaction fees
I thought transaction fees were the entire reason to mine as the minted coins per block decrease asymptotically.
You seem to believe the banking industry is over-regulated.
Banking regulations aren't all the same thing. Regulations that try to prevent insider self-dealing or offloading costs on taxpayers are a good thing. Regulations that basically make banking privacy for individuals illegal are a bad thing.
Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme.
How's that different from the US dollar, then?
I've learned that they're worthless, so I don't read AC comments anymore.
Have the courage to speak for yourself and only yourself. Everybody here wants you to do that.
- First they ignore you, then they laugh at you, then ???, then profit.
Do you know the definition of Ponzi scheme? Because I don't think that term means what you think it means.
Bitcoin is many things, but it is as much of a Ponzi scheme as gold, real estate, or stock speculations. ie. not a Ponzi scheme at all.
While one can argue that Bitcoin is a scam (and most definitely a bubble), it does not fit the formal definition of a ponzi scheme.
http://www.sec.gov/answers/ponzi.htm
>>A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.
The key point here is the "solicit new investors by promising to invest funds in opportunities claimed to generate high returns" section. In a normal Ponzi Scheme, the previous investors would attempt to guarantee newcomers that profit is certain.
In comparison, Bitcoin promises no such thing. While it is true that the profit of previous investors (or speculators) do indeed come from newcomers, the newcomers are not promised anything beyond their belief that the price will continue to rise.
This key difference makes the Bitcoin phenomenal a 'Bubble', not a 'Ponzi Scheme'.
I wonder if Mt. Gox having their bank accounts seized by the feds has anything to do with it.
That's the thing about asset forfeiture. If the feds drop a nuke on you, anyone you owe money to gets shafted by the fallout even if they're completely innocent.
In other words, it's a lot more efficient and cuts out the now unnecessary plethora of middlemen.
Welcome to the future!
I'd would short sell stocks in banks & credit card processors if you're dumb enough to still have any. It may not be bitcoin, but it will be a digital distributed currency that kills the banks.
If it weren't for the continuous and ongoing bailouts they would have already collapsed and they are going to do so.
Question everything
Surely having your Bitcoins held by a third party (especially one that, going on this story, might not be entirely honest about its internal workings) defeats the point of a 'decentralised' currency? How is being at the mercy of these clowns any different from being at the mercy of your governments central bank?
Well, one difference is that you can vote for the government that controls your central bank. With this lots its just caveat emptor
It depends on the size of the transaction. Space in the blockchain and processing time are not free as miners are competing to have their blocks accepted by the rest of the network as soon as possible after they are found. The transaction fee for most transactions to get included right away is 0.0005 btc which is about $0.05 For average confirmation time, whcih has been decreasing due to greater hashrates see http://blockchain.info/charts/avg-confirmation-time
If you can't afford to pay a million dollars a year, then maybe you shouldn't be a bank. Since the government guarantees plenty of deposits in banks, it's quite reasonable that they make sure only banks with enough funds to survive are allowed to be banks.
Regulation is not a monolith. There are some good laws and some bad ones. I think we'd like to point out that the ones aroud money laundering are particularly bad in that they are not very effective for catching crooks but very good at stopping normal people from providing for themselves.
You seem to be shilling that more incorrect regulation is the right way.
Shilling? Someone is paying people to trash Bitcoin? Crap. I'm doing it wrong. I've been trashing it, because the only people plugging it are people who own Bitcoins trying to drive up prices. Speculators, money launderers and black market dealers, who else uses Bitcoins?
Bitcoins are actually becoming more plentiful to the tune of 3600 more being created each day. The more you look into it, you'll see that people have many interests in Bitcoin. Some want to start mining hardware companies, some do ponzi schemes, some see it as a revolutionary payment system and economic tool, some see it as freedom. How do you see it?
While you are correct logically, anytime a human & money is involved in the equation logic goes out the window cause we are emotional creatures. So the gov may tell the banks "loan more poor folks money."(which they did). At first many bankers may say exactly what you did "But if we do that we'll go out of business." but when the regulators come back and tell them to do it anyway, make you a pile of cash and we'll deal with the fallout later, what do you expect them to do? Remember we as a society have become a "Fuck you, I got mine" society and so that banker can do 2 things: Sell them loans to poor folks he knows can't pay them back but he will get rich or have a conscience refuse to sell them and then he and his family will go without. Which choice do you think most will take? I hate that it is that way and a majority of our citizens have this fuck you attitude but it was foremost the fault of those regulators who wrote the regulations to force the banks to do thier bidding (not that they really complained that much). How do you think they should have responded?
Isn't how I see it obvious from the context? It's a get-rich quick scheme for the people who got in early when it was easy to get bitcoins, and is ramped so that it is slowly and slowly becoming just a little bit more difficult (and hence, now is always the time).
It's definitely a scam at some levels. The entire system was designed to reward the earliest adopters (the creator, for instance) disproportionately.
The creator being absolutely anonymous, and working very, very hard to remain absolutely anonymous, is also very suspicious. His cited reasons for doing so can be seen as reasonable in one respect, but they also cast large doubts to me -- the justifications come down to an assumption of success (rather than just being a neat little pet cryptography project), and the system has extreme financial rewards for them personally if that success comes. If they were assuming success and didn't intend to exploit it, the system wouldn't have had such large rewards to begin with, with those rewards diminishing so rapidly.
It's also been a pretty spectacular failure as a currency (the rapid, vast value fluctuations are a big problem for serious use -- aside from illegal usage, where that can be tolerated for the anonymity benefits), but has been a resounding success as a method of making some people get very, very rich.
If there was no reason to feel threatened then why suddenly is the government trying to lock it down? If you aren't threatened you ignore it cause it doesn't matter. No, I am quite certain banks are fearful of breaking the status quo which they control and manipulate. The fact that it isn't widespread is why they are trashing it now, nipping it in the bud before it becomes too big to stop.
Bitcoin is really an amazing thing. The ability and ease by which you can send any fraction of money anywhere rather easily is quite an accomplishment. Yet, without any sort of insurance I do not believe this market can stand. Sure you can keep your coins in a paper wallet offline, but those coins have to come back online sometime. When they do, you may just be the victim of just the right 0-day exploit and suddenly all your coins have been sent off to a mysterious Bitcoin address.
Was that the majority of your savings? Too bad, so sad. Feel free to file a police report that will do absolutely nothing though.
And so castles made of sand, melts into the sea eventually.
In Enron's case perpetrators of that scam went to jail, and at least paid some of the money they lost back. I doubt a person could get a fraction of that amount of justice after getting their Bitcoins stolen.
Bank (US and European) also hate the competition; Bitcoin undermines and threatens a lot of the traditional revenue sources for banks.
Anything can be stolen, but at least investment accounts are insured and my physical goods can be covered by renters/auto insurance.
Between coins getting stolen or lost BTC is just too damn risky. So many seem to think, "Aww, it's just that other guy who got wiped out. That could never happen to me".
They changed their minds before they ever actually set up a MTG exchange. Just got stuck with the name because re-registering as a different company would have been a pain in the ass.
"Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme."
Only by people who don't understand how it works.
"Regulations that are keeping a Ponzi scheme out of the US marketplace."
Repeat: this is complete nonsense. If you understood how Bitcoin works you would know that it could not be a Ponzi scheme.
The reason no digital currency will ever be used to such an extent is that they are truly worthless. Just because something is rare doesn't mean it's valuable. Also, I've yet to see a digital currency that can scale with a growing economy in order to avoid deflation. That instantly makes hugely widespread adoption impossible, as if a currency starts growing in value, then people will just hoard it, its velocity will fall off a cliff, and it'll just lose the value it gained and then some.
Government-issued currencies have real inherent value because citizens of their respective countries need those currencies to pay taxes, or they'll go to jail. Considering most governments' budgets are at least 15-20% of GDP, with some over 50% (such as Denmark), that is a huge amount of demand for those currencies. In the US for example, every year the IRS takes in ~2 TRILLION dollars in taxes.
Bitcoin is definitely a Ponzi. The fact that it does not "solicit" IMHO does not make it go away. Madoff didn't promise "little or no risk" and still it was a Ponzi.
Key point is that all money coming in is from new users, there is no real value anywhere.
When the Bitcoins inventor cashes his 20% of all "currency" he owns, the newcomers will be left emptyhanded. Just like in any other Ponzi.
Actually I live in the US and i don't think it sucks, so I wasn't really going for easy karma (mine's excellent, thanks anyway). I was more trying to point out, in a subtle way (too subtle I guess) that the poster's "widely unstable" and "Ponzi scheme" descriptions could apply to either Bitcoin or the US dollar, depending on the opinions of who you ask. Both of those phrases are hugely loaded and very much an oversimplification if they're used to describe EITHER currency.
I guess next time I need to be a bit more literal to get my point across. To you, and the one mod who said "Flamebait!" anyway. Actually, now that i think about it, why would I care?
I've learned that they're worthless, so I don't read AC comments anymore.
OK, so then call it a pump-and-dump scam. Or call it a mania. But don't call it a Ponzi scheme, because it isn't. We aren't denying the bad aspects of Bitcoin; we're bemoaning your misuse of a well-defined term.
HSJ$$*&#^!#+++ATH0
NO CARRIER
"You can keep saying, but that doesn't make it true. It may not be a classic Ponzi scheme, but it has a lot in common with the pump-and-dump worthless stock scams, only played out on a much larger scale. You cannot deny that a very small group of people mined a very large percentage of Bitcoins very early and very easily and as all the "pumping" stories drive its value higher, these people are profiting handsomely."
The stock problem is only happening because too many investors today have forgotten (or simply never learned) the difference between price and intrinsic value. The market has been completely irrational, but that doesn't make it a scheme. It's just a bunch of people making dumb investments.
Yes, it is over regulated in some ways. For instance - there is a requirement that when you deposit or withdraw X amount of dollars, the government be notified. Why? WTF business is it of the government that I am shuffling around money THAT BELONGS TO ME? Suppose I'm just doing some home renovation. I went to the city, got my "building permit", tore down the stuff that's in the way, and now I'm paying the lumber supply for my new stuff. GOVERNMENT NEEDS TO KNOW? Really?
Every legislator who thought that was a good idea needs to burn in hell.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
"Original US dollar holders have been dead for centuries now."
You err. The Central Bank, aka the Federal Reserve, has only existed for 99 years and 7 months now. Congress got rid of the "Greenbacks" and authorized the Federal Reserve.
Also - the dollar might be "considered one of the more stable currencies", but fiat money is still fiat money. The dollar is technically valueless, worth less than the materials used to print the note.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
Bitcoin itself is just a currency and it's traded on numerous exchanges. But the latest MtGox move is interesting: A typical sign of a ponzi scheme is that they start limiting withdraws when they start to collapse. Who knows how much MtGox actually lost when DHS took their Dwolla account? And keep in mind that they just announced that there will be no more withdraws on June 20th. There are people who've been waiting for withdraws - still not processed - since June 5th. Also have a friend who managed to withdraw on June 12th but his second withdraw June 13th never came through.
9/11: Never forget it was a false-flag operation
Bitcoins are actually becoming more plentiful to the tune of 3600 more being created each day
^^^ THIS. People say that Bitcoin has deflation. This is currently NOT true, it is subject to inflation. If we assume that all new coins are sold then $388.800 new money needs to come in each and every day at current MtGox ticker price $108. Say $100 and that's still $360.000 new fiat money required each and every day.
9/11: Never forget it was a false-flag operation
The reason no digital currency will ever be used to such an extent is that they are truly worthless.
The vast majority of USD and EUR are digital. Only a small percentage exist as cold hard cash. Bitcoin is just another digital currency, just like USD, EUR and JPY. Yes, USD and EUR and JPY also have non-digital versions - but the amount is insignificant.
9/11: Never forget it was a false-flag operation
I see it as a trumped up way to illegally move funds and or steal funds.
that doesn't make it fraud. that just proves that it works...
world was created 5 seconds before this post as it is.
Given the choice of trusting The US Government and Wizards of the Coast LLC, a subsidiary of Hasbro, Inc I know which I would choose...
[The Universe] has gone offline.
This key difference makes the Bitcoin phenomenal a 'Bubble', not a 'Ponzi Scheme'.
We should add though, that every new market bubbles: technology that promises, at the least if the quantity restrictions are maintained, to provide a way to exchange value and make currency-like transactions less subject to restrictions and interference by outsiders, is technology that will likely gain "currency" (no pun intended) with conscientious (not to mention unscrupulous) people at the least, especially those worried about inflation. Bubbles eventually pop, but it doesn't mean all real (or real-like) assets go away: when housing bubbles burst, the overestimation of value disappears, not real wealth: when the Bitcoin (and like coins) bubbles go, it won't leave them, necessarily, worthless, or revealing things for a sham...the premise for their existence is that our money is already like this, so why not institute a substitute (which as far as I can see is neither money nor currency nor legal tender, but has some and does not share all the same characteristics as any of those) or something people are willing to use in its stead, removing stores of value from the hands of far-removed abstractionist-bankers, shady politicians who would throw nations into chaos in the name of getting elected and trying to satiate the mobs, and who would also devalue it incessantly in the name of hiding the mismanagement of the elite class?
That's not to say I have any Bitcoin nor intend to "mine" any: too expensive and I have other things to do, other things to spend real money on right now, but I did thing it's worth stating the above in our day of associational thinking, where anything labelled "bubble" is something to avoid rather than a phenomena of mere overvaluation that doesn't mean the thing overvalued is to blame or avoid itself.
Intelligent idiots are we. | Evil men do not understand justice.
The "Magic: The Gathering Online Exchange" is not the only thing backing Bitcoin. It's just the first/main exchange where you can convert between bitcoin and USD. There are other exchanges, and there's nothing stopping you from directly buying or selling BTC for USD on an individual basis with other bitcoin enthusiasts. BTC value is determined by the demand among the general population, not by the exchanges themselves.
what we should look out for are things that increase the real cost of sending transactions, such as spam and poor network connectivity.
Good point. If making a transaction away from Wi-Fi requires a cell phone with a data plan, then good luck paying your cell phone bill in BTC.
I only say this to help you and those around you when the shock of the real world causes you to enter a narcissistic rage.
You're projecting your own insecurities onto those who have a disagreement in opinion with you. Guess what that's a sign of?
I've learned that they're worthless, so I don't read AC comments anymore.
aka shunned by markets.
if it was labelled a CDO and Mt. Gox was named instead Bear, Stearns, and Co., perhaps those who followed the international credit crisis in 2008 would understand the relationship to established markets better.
there's a reason I call it BiteCon. it's like a Left Pocket Bank.
if this is supposed to be a new economy, how come they still want my old fashioned money?
I suggest you look up how Banking got started. It links nicely to the conspiracies of the Illuminati. Bankers do actually run the world. read the book 'Blood, money and greed."
Banking itself is a ponzi scheme. We believe it works because the shells have never stopped.
For now. The rate of new coins coming into existence gets lower and lower every day by its very nature, and there's a hard cap on how many bitcoins there ever will be. In fact, just over half the bitcoins available are out there, and the other half will come into existence over the next 100 years.
Also, it means your economy can grow by 3600 bitcoins every day (for now). This was a major reason most economies went away from the gold standard - if you have a period of high growth, you're stifling the economy because you can't find enough gold to cover it, stalling out the economy and leading to economic problems as people go into hoard mode.
If some major business started using bitcoins, this limited growth can create some pretty severe economic issues, namely, deflation.
my bank does not charge any kind of fee, they just stash my money and give me half of nothing of intrest on it i.o. two times nothing, they have been around for quite some time even if the name changed (like most banks over time) and are definitely not broke. It's the reason why i switched. With low income my previous bank actually cost me money every year just for holding what little i had. This one gets about nothing on what little i have but the difference because of NO fees for any number of transactions or just holding the account nets about €40 a year in difference (from zero transactions, if i were to count x number of say ebays or others a month it would be more) So ... this argument seems a bit oldtimer to me
Free speech was meant to be free for all... how can anyone grow up in a nanny state ?