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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.
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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.
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.
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.
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'.
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
Sorry to burst your bubble but you can't build a coinage on hold either, unless you can mine it at the same rate the economy is growing.
A stable monetary base over a growing economy leads to deflation, which discourages investment. The equilibrium state with a fixed-size monetary base is a stagnant economy that is ultimately zero-sum. And if you think a zero-sum economy looks like anything other than concentration of wealth in the hands of the powerful, I encourage you to study some history.
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.
Bank (US and European) also hate the competition; Bitcoin undermines and threatens a lot of the traditional revenue sources for banks.