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New York's Financial Regulator Subpoenas Bitcoin Companies
dreamstateseven writes "Things are getting serious for Bitcoin this month: a federal judge declared it real money, Bloomberg gave it an experimental ticker, Thailand declared it illegal, and now New York's financial regulator announced an interest in regulating it. The department is starting out by subpoenaing 22 digital-currency companies and investors to get a lay of the Bitcoin land. They sent letters to the major Bitcoin players asking them to hand over information regarding their money laundering controls, consumer protection practices, source of funding, pitch books (for Bitcoin start-ups) and investment strategies (for Bitcoin investors). Keep in mind, a subpoena doesn't mean criminal activity has taken place."
... although I have to admit that New Yorkers pretty much keep asking for that level of government meddling in their lives.
Nice business idea you have got there, it would be a shame if something bad would all of a sudden happened to it, out of the blue.
The government Mafia wants its piece of the pie, so there will be regulations threatened, there will be actual regulations, the regulations will establish the monopolies that will be allowed to participate in this new business idea, the rest will be locked out and the remaining monopolies (oligopolies if you like) will pay their dues to the Mafia bosses.
You can't handle the truth.
Federal judge just means douche bag working for special interest groups or a government worried they haven't squeezed every last cent out of taxpayers yet.
Thailand did not rule Bitcoin illegal. The head of the central bank of Thailand issued a preliminary ruling expressing that Bitcoin may be illegal because there are no laws that allow its use.
Think about that for a moment.
Read: http://qz.com/110164/thailands-infamous-bitcoin-crackdown-is-not-quite-what-it-seems/
Colin Dean Go a year without DRM
Bloomberg: "So let me get this straight... we can make money by just re-using computer time ***AND*** heat the subways? Who thinks up this stuff? I'm in!"
I deny that I have not avoided attaining the opposite of that which I do not want.
We already owe you nothing for the financial crisis.
You fail systematically at every of your duties.
Same for the internet.
Governments and regulators are to the internet what hooligans are to sports.
The internet must be purged of external influences, through force and crypto anarchy.
Between bitcoin and something like WoW gold and similar virtual currencies? Why all the interest in bitcoin all of a relative sudden after decades of ignoring all the trade in other virtual currencies?
BitCoin is not an anonymous currency. It was touted as such, but if one really wanted an anonymous currency, they would have used one of Chaum's ideas (DigiCash, anyone?)
Not sure if it is true, but people have been posting books about why one has to avoid Bitcoin, from the fact that it is centralized (which can cause someone offline to get fucked if someone hands them some coins and then spends the same coins to someone else), to the tracability aspect, to the fact that the whole system benefited the people who came in first and could grind the coins out on CPUs, no GPUs, FPGAs, or ASICs needed, as is needed these days.
Oh, the fact that there are no insured BitCoin exchanges, and there are no security measures in place doesn't help either.
Maybe they should figure out who actually created bitcoins, and figure out if he's sitting on millions of dollars of coins himself?
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't. You can't have a situation where the nifty "hacker" currency that you like is exempt for all regs and you can do what the fuck ever with it, but traditional monetary instruments are regulated to try and stop shit like what happened in 2008 (in no small part because of the repeal of many regulations).
So you have to decide how you feel about government regulation of the economy, currency, investments, etc, and then be consistent with it. Reason isn't just to not be a hypocrite (though that is a good one) but because if instruments and investments denominated in dollars are regulated but ones in Bitcoins are not, well guess what all the Wall Street scum will do? That's right, use Bitcoins.
If you're wanting to get a break on recorded income you have to figure out depreciation on every single item if you want a tax break (since even selling it at the same price you bought it may be considered a profit since it's value has depreciated.) Not sure if there's rules for appreciation as well but I spent far too much time reading up on this in regards to Cali/Federal tax laws when working out taxes were I to sell my car.
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
but because if instruments and investments denominated in dollars are regulated but ones in Bitcoins are not, well guess what all the Wall Street scum will do? That's right, use Bitcoins.
Crime is still crime, and theft is still theft. You don't need specific government regulations on marshmallows to make stealing them illegal, the same goes for Bitcoins. But here it is you who is trying to have it both ways: you are asking us to trust the government to regulate money and the "Wall Street scum", when that same government hasn't prosecuted anyone for the theft of billions that led to the financial crisis.
Whilst the right regulations would likely have stopped the financial crisis, the government doesn't need those regulations now to prosecute the people who caused the financial crisis because the obvious theft is still obvious theft. Think of regulations like a safe: stealing the money is still illegal whether it is locked up in a safe or not. Regulations would be welcome, but the problem we have is that the government has somehow chosen not to prosecute any bankers.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
This is not regulating bitcoin. It's regulating financial institutions that handle bitcoin.
I have no problem with that. It's the best thing that could happen to encourage the bitcoin economy.
You make a great point. It's a simple question:
Do you want financial institutions such as banks and currency traders to be thoroughly regulated?
I'm betting many here would say "yes". "I mean yes, if it's a USD bank. Not if a Bitcoin bank or trader." "Let me rephrase, regulate traders who trade in dollars, euros, pesos and yen, but not in bitcoin".
What about the ones who trade in dollars, euros, yen AND bitcoin? Do you want Obama to come down hard on them?
The cognitive dissonance is thick in here .
Bitcoin exchanges do PRECISELY the same things that the "evil" Wall Street firms do. (Most of Wall St. is simply your mom's retirement savings being put to use building stores and such to earn her enough to retire.)
* autocorrect corrected "bitcoin" to "buffoon". Does the machine know something?
It also showed "virgin" as a possible correction for "bitcoin".
... although I have to admit that New Yorkers pretty much keep asking for that level of government meddling in their lives.
New York is a global financial center, arguably the global financial center --- and when things go wrong here all hell breaks loose.
The economy of New York City is the biggest regional economy in the United States and the second largest city economy in the world after Tokyo. Anchored by Wall Street, in Lower Manhattan, New York City is one of the world's two premier financial centers, alongside London and is home to the New York Stock Exchange and NASDAQ, the world's largest stock exchanges by market capitalization and trading activity. New York is distinctive for its high concentrations of advanced service sector firms in fields such as law, accountancy, banking and management consultancy.
The New York metropolitan area had an estimated gross metropolitan product of $1.28 trillion in 2010. The city's economy accounts for the majority of the economic activity in the states of New York and New Jersey.
Manhattan is home to six major stock, commodities and futures exchanges: American Stock Exchange, International Securities Exchange, NASDAQ, New York Board of Trade, New York Mercantile Exchange, and New York Stock Exchange. This contributes to New York City being a major financial service exporter, both within the United States and globally.
In 2003, Fedwire, the Federal Reserve's system for transferring balances between it and other banks, transferred $1.8 trillion a day in funds, of which about $1.1 trillion originated in the Second District. It transferred an additional $1.3 trillion a day in securities, of which $1.2 trillion originated in the Second District.
Economy of New York City
Fun fact:
The Google building, 111 Eighth Avenue is the property with the highest-listed market value in the city, at $1.9 billion, The building, which has been owned by Google since 2010, is one of the largest technology-owned office buildings in the world --- exceeding all of the combined buildings at Google's Googleplex headquarters in California. It is also larger than Apple Inc.'s new circular "spaceship" (2,800,000 square feet (260,000 m2)) headquarters being built in Cupertino, California.
This is utter nonsense - the US government is allowed to regulate anyone conducting financial transactions within the US. As I've said before, they don't care what those transactions are reckoned in - dollars, Bitcoins, or jars of hamster poop. The same rules apply to all of them.
Yep, you're right - all they need to do is ensure that Bitcoins follow the same rules as anyone else. Which is exactly what they're trying to do.
It's been quite the popular pasttime to track down all the money down then demand people justify themselves to the last penny. All in the name of the wars against stuff, like the war on drugs and the war on terrorism. And sure it has some effect. Most notably, that has included making bankers hated for policing their customers courtesy having to carry out the rules. They didn't exactly stand up for their clients, but in the end it's still the rules that're the immovable obstacle here.
Bitcoin is one of the mechanisms where the market sees a deficiency and seeks to fill it in. Yet the first thing the authorities do is try and apply verbatim the same faulty, overreaching rules. The rule of rules is that if there exists a large discrepancy between what society wants and what the rules say, it's the rules that're in the wrong. And I think this is what's happening here.
but traditional monetary instruments are regulated to try and stop shit like what happened in 2008 (in no small part because of the repeal of many regulations).
Man did you ever drink the kool-aid. What happened in 2008 was caused by wholesale looting and fraud that makes Enron look like a street corner game of three card monte. It makes no difference what or how many regulations there are if the regulators are in bed with the regulatees. If the regulators cause trouble they won't get their cushy 7 figure jobs with the companies they're supposed to be regulating after suffering through their 2 years of government service.
Who is John Galt?
Problem is, we already have it both ways. Big banks and Wall Street types are free to do whatever the fuck they want with money. And if they blow it all on hookers and coke, the government will just print more for them.
. Meanwhile, any joe trying to make what basically amounts to Gold Coins in an MMO will get subpoenaed deemed illegal in some countries, and otherwise harassed.
This signature is false.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
I believe your argument is flawed here, the US Government does regulate banks trading in the Euro if they reside in the United States. The fact they they are conducting business in the US gives them the right to do so.
GENERATION 9882463: The first time you see this, copy it into your sig & add a random number to the generation.
Result: Slashdot users hate the US Government more than they hate Bitcoin; well done USA!
Next up is POSS vs ICANN. Remember to get your bets in before the end of the day.
Like bitcoins:
It's probably a bigger market than BitCoins - so perhaps they should go after that market first.
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
If that's right, with what justification is the SEC already regulating financial instruments issued by banks and not the US gouvernment?
Various derivatives aren't defined ir issued by the US gouvernment either, but still regulated.
And please not that "regulating the Bitcoin" is still something different to "regulating financial transactions". The latter ones are just what they are: transactions, independant of the denominated currency.
bickerdyke
It's not like bitcoin is an American currency, so why would they get to regulate it?
To be perfectly clear: the government can regulate uses of Bitcoin within it's jurisdiction. It cannot regulate Bitcoin proper.
The GP has a point. There's a self-consistent position which holds that the US should regulate its own currency, but not anyone else's currency. Someone holding that position would be in favour of the sort of regulation that would have prevented the recent unpleasantness on Wall Street, but against the government's current crackdown on Bitcoin, and they would be perfectly consistent in this.
Just wait 'till they get a load of other virtual currencies, like the Lindon Dollar, the WoW Gold, or Plex...
You can exchange USD between online game currency. Bitcoin is just WoW without the "wow". Regulate that. I fucking dare them. Some hornets nests are better left alone. So, If I make a Tetromino dropping game wrapper around it, then it's a different story that if I don't.... Right, because wasting time and resources to generate loot is so different than mining bitcoin.
Protip: We didn't used to have a country wide currency run by the Fed. The thing is, if one entity controls the currency then they basically own your sole, it's corrupt. That's why getting payed in credits for the company store is so damn heinous. Same goes for USD. Here's something interesting: I don't need to transfer BTC into any other currency to use it in trade for goods and services. Think about that in relation to other virtual currencies: "Hey, I'll give you this sick gear in-game if you paint my house." What's the difference between that and, "Hey, I'll wash your car for a year if you paint my house." Just because someone claims authority to something, doesn't mean they actually have it.
Regulators? We regulate any stealing of virtual property. We're damn good too. But you be any geek off wallstreet; Gotta be handy with the terminal if you know what I mean -- Earn your keep.
Regulators! Mount Up.
OP is a fag.
If that's right, with what justification is the SEC already regulating financial instruments issued by banks and not the US gouvernment?
The SEC exists to prevent corporations messing with their own share prices by cooking the books or insider trading. All those other derivatives that the SEC watches are an extension to this. It is to theoretically allow an even playing field on the stock market.
Obviously this doesn't apply to Bitcoin, since the intrinsic value of Bitcoins don't relate to the operation of an individual corporation. Additionally - Bitcoin is designed to be so independent that price fixing can't really occur - hence no need for the SEC.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
Nobody stole anything, they simply stopped trusting the quality of each other's financial instruments . There is no evil hoard of bankers sitting atop a mountain of cash, the money simply evaporated because without trust, financial instruments are basically worthless.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
This is utter nonsense - the US government is allowed to regulate anyone conducting financial transactions within the US. As I've said before, they don't care what those transactions are reckoned in - dollars, Bitcoins, or jars of hamster poop. The same rules apply to all of them.
If you say so, I'll believe you, I admittedly don't know the rules for financial exchanges in foreign currency for the US in any detail. In Australia, only transactions in AU dollars are regulated by the government - most foreign exchange transactions are not regulated (the exception being the retail cash exchange outlets - so that travellers don't get ripped off).
But what you say doesn't change my position - that governments shouldn't be regulating transactions which don't involve their sovereign currency in any way. The fact that my views align with the laws of the country I currently am living in is just a happy coincidence.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
This is retarded even by Slashdot standards. Using your logic, if I carried out a fraud in Europe in Euros, the EU is allowed to stop/punish it, but if I carried out a fraud in Europe in US dollars, they aren't.
Where can I get me some booze and hookers for Plex? How do I pay my rent with WoW gold? What's the going rate for Facebook tokens -> USD conversion? How deep is your head up your ass if you don't see the difference between WoW gold and Bitcoin? What does it say about BtC proponents when even they think that Bitcoin is glorified WoW gold? Why would the Fed want the bottom of your shoes?
Contemplate that.
Or just more Banker Lobbyist looking out for Banker interests?
Captcha: anyway
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
This is retarded even by Slashdot standards. Using your logic, if I carried out a fraud in Europe in Euros, the EU is allowed to stop/punish it, but if I carried out a fraud in Europe in US dollars, they aren't.
Nope - in the part of my post that you didn't quote, I specifically said that crime would be the same if it was done in Bitcoins or marshmallows. That covers your example, and we don't need any new laws to deal with that situation.
What the conversation is about is whether a new regulatory framework needs to be set up to deal with Bitcoin. My belief is no, for the reasons I've already given.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
Exactly which rules are you blather on about?
The ones that required billions of dollars in interest-free loans and caused thousands of people to lose their homes while the bankers involved kicked back counting their million dollar bonuses?
The Federal/State governments are what need regulating. Seems like the govt has become Skynet, an omnipotent self perpetuating force.
No, I wasn't one who bitched about Wall Street or the banks. Thanks for making an ass out of yourself by assuming, though!
Sure you can. You can absolutely have it both ways, but it needs to start with an understanding of the situation. Bitcoin is designed, among other things, to bring some of the properties of cash to electronic transactions. Cash is as secure as you choose to make it. It is, given the medium, somewhat secure against unauthorized duplication, as it should be. It is more or less anonymous absent some extraordinary means being taken to track it. It doesn't leave a permanent record of everything you've ever spent it on.
Those last two things are not desired by today's tyranical control freak governments. It's not that there should be no regulation of financial transactions--it's that the regulations should benefit people, not harass them. The response of governments, especially in the US, to people who choose to do business in cash is to harass them, steal their assets (see "civil asset forfeiture", a thoroughly unconstitutional concept) and generally try to make life miserable for them. That is the same response they have to Bitcoin. So in that regard, you might say that Bitcoin has been a total success in coming very close to replicating the properties of cash. Those properties include of course "get harassed by law enforcement when you use it too much".
As to crap like "money laundering controls", well, money laundering means a lot of things, some of them not so good, but these days of course the defintion has been twisted to mean "do anything with cash we don't like". Of course, this mostly has to do with the idiotic War on Drugs (tm) that is so highly profitable to governments and corporations everywhere at the cost of basic human freedoms and dignity to so many.
Absolutely none of this would have helped with the financial crisis, of course, because the people who aren't being properly regulated are the crony capitalists who brought down the US and other economies through their greed, avarice, disregard for common sense and common decency, and general and through corruption. You go right ahead, though, and lump things like Bitcoin in the same realm as that kind of slime and feel good about yourself, ok? Meanwhile, in the real world, some people would just like to buy stuff and conduct business without somebody building a database out of it.
You'd think I was a big Bitcoin user, btw. Never once. I just know that freedom has been under assault under the guise of bringing bad people to justice, and yet the only people who ever seem to get brought to "justice" aren't the ones who do things that are the most harmful. Minor drug offense? Prison for most of the best part of your life. Crash an economy, break up families, put literally millions out of work--the regulators will be happy to meet you for drinks at the country club after work on Friday. Don't ever let things like Bitcoin be mixed in with the likes of Wall Street. It's insulting.
The interest of financial regulators should be to make sure nobody gets ripped off--that currency can't be easily duplicated, that its value isn't artificially manipulated, etc. If those were their goals, great. However, those are not their goals, at least not the only ones. Never forget that.
Protip: Anyone using the term "Protip" is a cunt.
"Regulations would be welcome, but the problem we have is that the government has somehow chosen not to prosecute any bankers."
You are mistaken. There is no government separate from the banks. The banks are the government. They wrote the laws.
>In Australia, only transactions in AU dollars are regulated by the government
WRONG!
Barter is regulated (at least taxed, which, IMO, is a form of regulation) in Australia. While BitCoin is not exactly barter, barter itself is a non AU-Dollar transaction.
http://money.stackexchange.com/a/21449 find your country in this list.
Fuck me, you are so fucking wrong about what the Aussie Govt can regulate in it's own borders.
Hint - I was a ForEx trader at one time. I know what I'm talking about. You do not.
If you say so, I'll believe you, I admittedly don't know ... But what you say doesn't change my position ...
So if I follow: You don't know what you're talking about, and when corrected by those who do it doesn't change your opinion. Well that Christ you're here on the internet to contribute, where would we be without your rigours scientific intellect to keep all these discussions honest?
>In Australia, only transactions in AU dollars are regulated by the government WRONG!
Barter is regulated (at least taxed, which, IMO, is a form of regulation) in Australia. While BitCoin is not exactly barter, barter itself is a non AU-Dollar transaction.
http://money.stackexchange.com/a/21449 find your country in this list.
I was referring to foreign currency transactions in that statement. Foreign currency transactions between banks and financial institutions etc., are not regulated in Australia with the exception that I previously posted.
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
I believe he was talking about the Euro itself. You are correct that the government can regulate any business trading in any currency, so long as that transaction is completed within said country. This does not give the US government the ability to print new Euros or issue treasury bonds from other countries. Regulation of the currency itself (ie: printing, initial distributing, and reclaiming for destruction) falls to the government which issued that currency to begin with.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues. Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
It used to be unconstitutional for congress to restrict the purchase or sale of a product once you legally owned it.
It required a constitutional ammendment to prohibit the production, possession, and trade of Alcohol.
Fast forward decades later..... new precedent was set by the drug laws. These days; They can regulate the Euro or the trade of the Euro on US soil.;
And they can ban Bitcoin; probably without congress having to pass any law to do so --- since the laws are designed such that almost anything innovative will probably be at odds with the laws on the books somehow.
And what the article is about is applying existing regulatory frameworks to Bitcoin, since it looks like something they were meant to cover. So what's the problem?
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
I want to pay my taxes in jars of hamster poop now. Thank you!
You can get booze and hookers for bitcoin now?
Way to prove your point!
Protip: I'd mod you up, but that would be cuntish.
I doubt you finding hookers who take bitcoin.. they'll take dollars that you bought for bitcoin though.
which gets us to the point - despite it being against the rules you can sell, in practice, wow gold etc for dollars.. does that make them securities?
just about the the only difference is that blizzard can create wow gold from scratch if it wants to.
world was created 5 seconds before this post as it is.
These are interesting times, for sure. They claim this is just âoeso we can understand how Bitcoin works,â but I think the reality is that this is an intelligence gathering expedition to figure out how to enforce regulations through forcible means, such as taking over control of the Bitcoin network or enforcing licensing for miners.
I hope they realize that they can't simply "take control" of a decentralized, peer to peer network like Bitcoin, but I am sure they are going to learn as much as they can so they can try.
This does not bode well for Bitcoin or any other alternative currency.
This is a false equivalency. The US government is allowed to regulate it's own money - that is - the sovereign currency that it issues.
The government's powers to regulate currency and other financial instruments goes well beyond just the US dollar. This is WELL established in our laws. If it is a financial instrument used for interstate commerce (which bitcoin clearly is) within the US then the US government has the ability regulate it. Bitcoin is a currency and will be treated as such which means there are some rules to follow. Companies that want to build a business around bitcoin will find that there is a considerable amount of regulation surrounding currencies precisely because of all the previous attempts at corrupt behavior.
Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
You'll find that you are quite incorrect on that assertion. The US government has a well established right to regulate the use of any financial instrument used within its borders. The fact that it isn't the dollar is irrelevant. The government can regulate ANY currency or other financial instrument used within its borders.
Tell you what, why don't you open a foreign exchange business in an international airport - in the US side. How long do you think you could get away with running your business by dealing in every currency except the dollar? Take another example, would you expect to be able to conduct business and sidestep legal regulations by simply conducting your business in Euro's?
What about those countries that don't have their own currency and use the US dollar instead (there are about 20 of them as memory serves). Should these countries be able create regulations on their markets? The idea that you cannot regulate the use of a currency within your borders simply because you did not originate the currency has absolutely no precedent. For the meanwhile nations have been regulating trade conducted with foreign currencies for countless generations.
You just might have posted the least thought out comment I have ever seen on slashdot.
In Australia, only transactions in AU dollars are regulated by the government - most foreign exchange transactions are not regulated
I assure you that cannot possibly be true. If it were true then there would be HUGE incentives for everyone to deal in currencies other than AUD as they could escape all kinds of regulation.
Or is that fine because they're not a currency, or a bank, but have enough of both to scare the investigators off?
The SEC exists to prevent corporations messing with their own share prices by cooking the books or insider trading.
The SECs mandate is quite a bit broader than that. It exists to enforce all securities laws and exchanges within the US. Insider trading and accounting are a piece of that but they do quite a bit more.
Obviously this doesn't apply to Bitcoin, since the intrinsic value of Bitcoins don't relate to the operation of an individual corporation.
There is no such thing as intrinsic value as it relates to currencies as they have no value independent of their market value. Furthermore the dollar doesn't relate to the operations of individual corporations either so I'm not really sure what your point is.
Additionally - Bitcoin is designed to be so independent that price fixing can't really occur - hence no need for the SEC.
If you really believe that then you and your money are likely to soon be parted. There are FAR more types of securities fraud that can occur than simple price fixing.
1) Implement a licensing requirement to mine bitcoins or to operate a pool or exchange within the US, probably also requiring membership in an elite, "trusted" financial institution
2) Make it a Felony to mine bitcoin without a license from the government
3) Track down and oppress "illegal" bitcoin miners throughout the US, making examples of them
None of this regulates bitcoin itself, which can't be regulated. It just takes control over the means of production, which is what our government has been doing since it started pursuing communism in earnest under FDR.
or the banks? Because you can't have it both ways: Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't. You can't have a situation where the nifty "hacker" currency that you like is exempt for all regs and you can do what the fuck ever with it, but traditional monetary instruments are regulated to try and stop shit like what happened in 2008 (in no small part because of the repeal of many regulations).
Sure you can. A single Trojan or Durex condom costs like $1.20-$2.50 depending on if you get a bulk pack, 3-pack, or get one out of a bathroom at a night club. Same rubber. These are short-life minted coins that have a circulation life of 2-4 years, or until someone uses them. You can make money buying and selling condoms--if you work in a bathroom at a bar, handing out toilet paper for tips, selling individual cigarettes and condoms at 100% or better mark-up.
Bulk unload the condoms on pimps and whore houses where they'll go through plenty of them. Because of the bulk-unload needs, the drug trade will most likely stay near the lower end of dollars-per-condom: pimps can always get a pack of Durexes from Rite-Aid, so you have to out-price them.
Are we going to put money laundering controls on condoms next?
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Who stole what now? How did theft come into this?
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False equivalence. He'll accept the facts (i.e. that the government does regulate monetary transactions), but that doesn't change his position (i.e. that such regulation is inherently wrong and the government needs to stick it up its ass).
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Keep in mind, a subpoena doesn't mean criminal activity has taken place.
No, in this case it means some over pompous government official is holding his hand out and closing his eyes, just to see how many bitcoins "accidentally" fall into it.
And yes, they will tax your income from selling WoW gold. If you don't submit how much you traded in it (over a certain amount, something of the order of a few thousand dollars a year), then you are guilty of tax evasion and fraud. If you bought WoW gold, then you aren't taxed until you gain a material value from its further transaction (e.g. selling it or swapping for a car, or whatever).
It was Goldman Sachs, and they've gotten the conservatives and the liberals both to believe it was Freddie Mae and Fanny Mac. Sachs invented the Consolidated Debt Object, a way to sell off a package of toxic loans to other banks and convince them it's good for them. The explanation was that you get 10,000 loans and some subset are terrible, risky, and going to default and cost you money; but because the others are together lucrative, the overall is a net-gain. Thus Sachs invented a scheme to give consumers loans they can't handle, take all their money, then dump the impending doom and financial costs onto another bank (said bank pays off the debt, becomes the new creditor and tries to get that money plus interest back from the debtor).
The best part? Goldman Sachs had this pitch, their front-man is going to Fanny and Freddie and Bank of America like, "Well these are actually high-value packages with a few bad loans, but mostly high-value debt to deliver an overall high profit margin." Then, he goes back into the board room like, "Oh, yeah. These are steaming sacks of dog shit, but they bought it!" Steaming sack of dog shit. Really. High-value.
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This is completely untrue. Foreign currency exchanges are regulated by the Banking act of 1959 and all its various updates since.
In fact we're probably more heavily regulated than most countries in the world, which is part of why our banks didnt shit themselves and die in the GFC.
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.
There's gotta be some country where voluntary transactions between consenting adults are legal? No?
1) You're creating a distinction-without-a-difference between currencies and transactions denominated in those currencies. Given that the main purpose of currencies is to carry out transactions, there is no practical difference between "regulating a currency" (which, according to you, countries can do only to their own currencies) and "regulating transactions carried out in that currency" (something apparently not subject to such constraints).
2) Er, are you saying that the US can't regulate foreign-exchange transactions in the US?
The bitcoin market is incredibly malleable and fixable. If the major exchanges all decided the rate is going to be glued at $15 a bitcoin, it will fix at that point because buyers wount buy more expensive and sellers wont sell more cheaply.
But more to the point the fact that the guys on Something awful managed to accidently crash the market by running around shouting "SELL SELL SELL THE MARKET IS CRASHING" for a prank indicates that its a *very very* unstable and manipulatable market anyway.
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.
a subpoena doesn't mean criminal activity has taken place...
That's right. It is frequently used to target people for the purpose of harassment. Kind of like 'discovery'. We're not supposed to tolerate this.
“He’s not deformed, he’s just drunk!”
You can order booze off of Silk Road and There are hookers in NYC listed on Black Market Reloaded. In both cases they take BtC.
I am always amazed at what you can buy with BtC.
IF someone sells one stock to buy another, there's no change in the available capital - it just moves from one person to another.
..
However, if someone puts 12% of their paycheck into the capital market as opposed to spending it, that's money being newly added to the capital pool.
Capital is money available for building stores, semiconductor fabs, ships, etc. That's why it's called capitalism - the capital is being put to work.
So when money is added to the capital market, that's more money for building stuff. It really doesn't matter whether the new money passes through a
broker, a mutual fund, or a pigs rear end - taking money form the consumption stream (paychecks) and adding it the capital market does just that -
ADDS to the capital market. In the end, it doesn't matter if it's an IPO or a bond - more investment of capital funds ($) means more investment in capital assets (ships, stores, etc.)
Despite what's being told to pawns who don't know about financial markets, most of the money in the market is that 12% that ordinary people save, mostly
buy and hold which means their buys are adding to the capital market, not moving it around. Sure, there are a few hundred mega-wealthy people moving their
money around, but their are a few MILLION buy and hold savers. So mostly, it's new investment, not day trading.
> The funds manager skims 1% regardless, so doesn't care much about you.
> $250 of his dollars go into my pocket, and I give him $50 worth of stock.
Not too good at percentages for someone who thinks he knows investing, are you? The management company gets 1% you said,
(0.030% for some index funds), and that 1% is most of it. Have you noticed that if the management costs are 1%, that means 99% is
invested is capital assets, in producing stuff? You seem awfully focused on the 1% and you're totally ignoring the 99%. That's
understandable if the 1% was going in your pocket. I too am much more interested in money that's headed or my pocket than money
that's not. It seems to have distorted your point of view, though.
> It's like poker: a game of luck and chance, to anyone who's looked at the odds.
To anyone who has focused on short term, day trading style odds. For most of us, we know that only ONCE has the broad market failed to
provide a good return over any ten year period. There's no poker here for most Americans, we know if you invest, ten years later when you want to
retire or send your kid to school, the money will have grown considerably (more than doubled, typically). Obviously the 2008-2009 crash was
a big exception. Still, if you've invested since Oct 10 2008 you've made money. (invested, as in index, not gambled).
It's not regulating bitcoin. It's impossible to. But they can regulate us domiciled companies doing business in the state of New York with customers based in New York and other states that New York has reciprocating agreements with (which is probably all. Maybe not Wyoming, but probably them too)
This is utter nonsense - the US government is allowed to regulate anyone conducting financial transactions within the US.
You mean interstate financial transactions, of course.
However, this article isn't about the US government, it's about New York state, which really does have legal authority to regulate any financial transactions in New York.
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This might not be so bad after all...
the banks should simply be forced to do all lending and "real" stuff in real currencies.
if they want, they can also offer "financial products" but those have to be handeled in some virtual currency of their choice.
that way, the banks can bubble all they want, and the real economies are sane and safe again
the real question is: is the Secret Club controlling it and/or getting their cut of the profits?
what a travesty. what a sad sick little show.
Either the government regulates money for various reasons (crime, abuse, economic stability) or it doesn't.
I don't know anything about the economy or bitcoins, but I do know that nothing is as black and white as you're painting it. There's plenty of room between "your papers, comrade" and the current "We can't possibly tell big banks what to do! Lets just pray they don't intentionally break the economy again!"
Writing the computer code is relatively simple. The hard part is getting a;; the graft and kickbakcs sorted out. Getting all those back room negotiations sorted out takes time. When all that is done, the public will be screwed properly.
Bitcoins aren't defined or issued by the US government, so it has as much right to regulate Bitcoins as it has to regulate the Euro.
Try carrying a duffel bag with a few hundred thousand Euros through customs and tell the agent that they can't do anything about it because the US government doesn't have the right to regulate Euros. Please have someone record it, too, because the results will be the funniest thing I'll see all day.
The US government is empowered to regulate commerce within its borders. It doesn't matter what currency you're using.
The problem is that the jars of hamster poop have an inverse exchange rate with dollars.
The government is going to have to give you approximately four container ships' worth of hamster poop to cover your tax burden.
Sorry for confusing you! This comment was meant for a different story. I posted it here by mistake.
if instruments and investments denominated in dollars are regulated but ones in Bitcoins are not, well guess what all the Wall Street scum will do? That's right, use Bitcoins.
Let's be precise here: they would use "WallStreetCoins" or some similar transparent but hypothetically legal loophole.
Let's not fuel the dreams of the Bitcoin "investors" who think that the entire world will suddenly want to get in on a useless mathematical commodity whose limited supply is mostly held by people who mined them for nothing back when it was cheap. Anyone can make a Bitcoin clone with a click of a button.
> Because you can't have it both ways: Either the government regulates money for various reasons
>(crime, abuse, economic stability) or it doesn't.
This is a false dichotomy.
There are things than can be regulated (Fraud, crime, abusive behavior)
There are also things that can go unregulated (creation of money, spending and receiving of money) In a crypto currenct, these things are impossible to regulate save by global consensus.
The abuses that occurred during the 2008-9 crisis went largely un-punished even despite a clear cause for fraud. The bail-out amount to a huge inflationary minting of dollars, effectively governmental redistribution of wealth. Both of these things can be complained about and both are bad.
I was struck the other day with the similarities between bitcoin and a savings account: Both are digital representations of a logical construct.
The most basic logical construct of the financial world is currency. Slips of paper to which people ascribe value. When stored in a savings account, they become digital representations of the currency logical construct.
Tractors in Farmville are digital representations of a logical construct.
Stocks (shares of ownership), bonds (promises to pay), synthetic CDO's (a bet which a US district court judge called "gibberish") are other logical constructs. These are typically represented digitally as well. But, at some point, these constructs can (hopefully) be converted into currency and exchanged for goods, services and financial products.
Gold, beanie babies, art are stores of value. Any store of value, even though it might have a physical representation, is a logical construct. The value is the logical construct. Typically, the value is measured by the amount of currency for which it can be exchanged. There can be other measures too, but currency is a common unit.
Whether people accept this logical construct (bitcoin) remains to be seen. If people directly accept it as currency - meaning they will accept it as payment - or value it for its convertibility into currency remains to be seen. If it's the former, it could become valuable. If it's the latter, it's going to have a lot of competition from other logical constructs to which people ascribe value.
Ultimately, a "thing" - physical or virtual - is valuable in that it helps people get what they want, whatever that want may be.
Tell you what, why don't you open a foreign exchange business in an international airport - in the US side. How long do you think you could get away with running your business by dealing in every currency except the dollar?
You just might have posted the least thought out comment I have ever seen on slashdot.
Look again. It is perfectly legal to refuse to accept dollars as payment on new contracts. It is only required (in the US) to accept them as legal tender for pre-existing debts. Nothing prevents you from setting up a contract requiring payment in advance before delivery, as the debt is then not created prior to the seller's acceptance of the contract. If you never take profit out of the business (buying excess inventory instead) you will never even owe taxes. If you want to nitpick, you can handle licensing fees via interbank transfer from Euro/etc denominated accounts.
"... since the intrinsic value of Bitcoins don't relate to the operation of an individual corporation."
When the fuck did this term "intrinsic value" come about and why the fuck is it being seen more and more often on here? Is this some new social-science buzzword? Some new poli-sci creation needed to rationalize the irrational?
Pay attention: there is no "intrinsic value" to anything. Not you, not me, not dollars, not bitcoins, not sheep shit, not gold, not tin, not used slippers from Sears. Nothing. Nothing has "intrinsic value". It does not exist, and if you think it does, then what you have there is called a "personal religious belief".
They don't have to regulate digital currency X, all they have to do is watch where physical currency Y comes in and goes out, and then connect the dots later. Bitcoin is going to get a lot of people into trouble with its quasi-anonymity.
So regulated institutions are allowed to engage in a narrow range of transactions between themselves without those specific transactions requiring additional scrutiny. And to you that means "not regulated"?
Wickard v. Filburn is still a prevailing judicial ruling, just about any economic activity in the US is "interstate." The Feds would probably claim that, for example, an intrastate party-to-party BTC/Dollar trade was still their jurisdiction, because such transactions can still affect the global BTC price, and they'd have a good point.
The Feds respect state borders only insofar as commerce does, and commerce doesn't at all.
Don't blame me, I voted for Baltar.
So much for the "Land of the Free". But this is all for the "Good of the Children" I'm sure.
The Bitcoin protocol allows irrevocable one-way transfers between anonymous parties. This is the scammer's dream. Now you can scam people for big bucks remotely, without worrying that they'll come after you with cops or a baseball bat.
Bitcoin was supposed to be a petty-cash system for small online payments. It's turned into a speculative commodity. This hasn't gone well. Several "online wallet" companies turned out to be "take the money and run" operations. Most of the exchanges are flaky. Right now, Mt. Gox, which used to be the biggest exchange, is two months behind on paying out US dollar balances owed to their customers. (It's not yet clear whether they're broke or merely incompetent.)
The Bitcoin world has, in its short life, seen almost every known financial scam. Bucket shops, blind pools, front running, broker embezzlement, Ponzi schemes - it's all there in the tiny Bitcoin world.
Bitcoin exist solely in Cyberspace, and governments have no authority there. it belongs to us.
We will not provide any bitcoin information, nor allow any regulation from entities which had no part in it's creation. Those 'entities' are simply trying to get their piece of the pie.
Sorry about your luck, but the answer is no.
I disagree. This is nothing more than private companies (Federal Reserve, and other financial institutions) working to get their piece of the pie, of which they have no vested interest. If they want in on it, they will have to get in on it the same way the rest of us do, and no, we will not allow a bunch of government gangsters to steal yet more money from us, just because they say they can.
We fight.
Yes, I understand that's the position the courts have taken. The result is to destroy the notion that the constitution limits the scope of the federal government in any way, since absolutely anything can potentially affect commerce.
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Oh, it's also worth pointing out that Wickard v. Fillburn was a direct result of FDR's court packing proposal. Like most of the related rulings of the time, it's bad law. Not that I see any realistic chance of reversing it any time soon.
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There is no evil hoard of bankers sitting atop a mountain of cash
To put it succinctly, bull shit.
I don't know about you but half a BILLION dollars is a hoard of cash to me. And that's just one of the guys that made all that money disappear. Sure they made our money disappear for the most part but in doing so they made sure they they walked away with huge hoards of cash.
It's kinda funny. The Reagan administration prosecuted some 1100 bank officials in the Savings and loan meltdown. The Obama administration has prosecuted 0 in significantly worse crisis.
Who is John Galt?
It sounds like we're making progress.
I don't dispute that some traders make a lot of money, BTW. That's clear. (Though it seems damn few are that successful for more than a few years.)
We agree that putting money into the market - well, puts money into the market. Maybe the person selling you the stock uses that money to buy bonds, handing capital directly to the company or whatever.
It is your assertion, though, that brokers and traders take home not 0.030 - 1% as shown in the filings, but approximately 100%. Therefore all the money put in is taken right back out, correct?
If so, I have three questions:
why is the asset value of the DJIA 15 times higher today than in 1980? Where did those trillions of dollars come from, if not from investment?
How did my mom invest about $100k, then twenty years later sell most of it for $1 million, if the traders took all the money? It's sitting in her bank account now.
Perhaps most importantly, how do YOU think ships get built? There are trillions of dollars of capital assets like ships, stores, factories, machines, planes, warehouses, etc. owned by stockholders. Where do you think the $100,000,000 to build a large ship/office complex / fiber network comes from? The traders walked away with the cash, then the fiber backbones magically appeared from nowhere?
I'm not questioning whether or not you can conduct trade in other currencies - you can. The point of the matter is whether or not you can evade regulatory and compliance requirements by using a currency that isn't the dollar - you can't.
Couple points: 1. No one calls GS "Sachs". 2. GS does not issue mortgages to ordinary folks and they were a relatively small player in the mortgage market.
Having said what I did above, I should acknowledge you certainly have a point for people who pay high fees during times if low returns, like the last five years. A 1% fee and 2% gross growth means the broker gets half of the INCREASE just on that fee.
I'm thinking more in terms of an index fund with 0.03% expenses and over the long term, which averages 7%-9% returns.
Whatever happens to the return, or increase, ships, factories, and fiber networks don't build themselves. They are built with investor capital - retirement money.
> If you buy a share of ship making company X from me at an exchange, how do you think that money benefits company X?
You ignored the question - all three actually. How do you think that ship is paid for? Hint - the money comes from investors.
Another hint - the shipped is owned by the group stockholders known Ship Buyer Inc.
> Even your bond idea was wrong - you can trade bonds with third parties too.
Too, as in first an investor must buy them from the company, directly handling cash to the company?
The fact that you can sell a bond to a third party is a primary reason people buy bonds from the company in the first place.
If you couldn't sell them, people wouldn't nearly as many. So when you buy from a third party, you are motivating that
third party to use your cash to go buy more bonds directly from companies, in order to later sell them and repeat the process.
> Are you trying to suggest that every ships parts were purchased with investor money?
Ship's parts? Are you playing dumb, or are you not playing? I'm suggesting that most ships are purchased with investor money.
If a company isn't one of the ~ 10 largest in the world, they don't buy a $700 million ship, factory, or national fiber network from revenue.
They get investors to invest money which is used for capital purchases. Sometimes they sell bonds, such as you see used daily
for toll road construction, sometimes it's an IPO, and sometimes they use an intermediary bank to borrow investor money.
In all of those cases, they are using investor money to buy that $700 million ship.
> Didn't I say "The ship making company is able to make more ships buy selling them for a profit."?
Only if someone(s) has $700 million they aren't using at the moment. Now who has $700 million that they won't need for 20-50 years?
Hint - the initials are TRS.
You *DID* say to *build* a ship...
And ya, lots of companies and governments have that much cash on hand. No one is going to issue shares just to build a new office complex. Who would invest in that strategy?
I can see the prospectus for the reissue:
Hey investors! We want a shiny new HQ, and YOU can help us get it!
No, it won't make us more profit.
No, it doesn't help our stock price (issuing shares dilutes the current shares - so it actually hurts existing investors)
It won't help us grow the business or increase market cap.
But hey, it's shiny!
Invest in us - we don't know how to handle money!
This is all besides the point anyway.
The overarching point was that over 99% of trading is between third parties and therefore the money doesn't go to the issuing company... although it does affect the share price.
The CDO is a Collateralized Debt Obligation, not a Consolidated Debt Object. If you got this most basic fact wrong, lord knows about the rest of your post.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
peer to peer, or is it peerISP-CIA-ISPpeer
Encryption? like HTTPS? that was just said to be insecure?
Yes I know, it's either "Goldman" or "Those Motherfuckers".
I didn't say Goldman Sachs issues mortgages, although during this time they did buy up a mortgage company and had it issuing mortgages to anyone that walked through the door. I forget which. It's one of those niggling details you read, form an opinion about, and then forget about because you don't care for trivia.
They do, however, buy up debt. They buy and sell and short loans. They even insure those loans, then sell them to someone else--thus if the loan defaults, someone else takes the hit *and* they get an insurance pay-out. Buying up a bunch of mortgages, packaging them together, and selling them off is a viable business strategy--it's one Goldman Sachs has used, in fact, during the turn of the century.
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That's called "trivia", not "most basic fact." Your grievance is like saying, "Chevy built the Chevy Virgil back in 1970, and it broke in half on the test course! It also liked to backfire because of a loose bolt on the carburator plate, but instead of fixing it with a locknut they recalled it and fixed the exhaust so it'd backfire away from the fuel tank instead of towards it!" and you're like, "It was the Chevy VEGA! Obviously none of your shit is accurate!" Trivia.
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