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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."
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.
Oh come on, this is the sort of conspiracy thinking that has lead to Bitcoin being a perpetual source of amusement to the less tinfoil inclined.
Its a federal courts simply following procedure now that Bitcoin has been declared a currency. If its a currency there are legislative requirements, and the courts are just ensuring that the Bitcoin brigade are following that legislation.
Considering bitcoins history of being an enabler of all sorts of messed up scams, bitcoin users should be celebrating this. The fed is getting involved and thats [i]a good thing[/i] to non paranoid schizophrenics.
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.
Money is the most liquid medium of barter. Game money has to be converted to real money in order to have value. You would never try to pay for something outside of a game with game money, that would just be absurd. Instead you would sell the game money to an interested party, just like you would with, say, collectable baseball cards.
Bitcoins, however, are being used directly as a medium of exchange.
I don't use (or care about) bitcoins; but if I had a choice, I'd rather deal with crooks than 'the government'.
one will rob me and then leave. the other will rob me and keep robbing me.
--
"It is now safe to switch off your computer."
Currencies don't enable scams. People enable and perpetrate scams. By your definition, the United States dollar has an incredibly long history of being the currency of choice for massively greater widespread scams and atrocities. What we're seeing here is nothing more than the preparatory work required to execute a good old fashioned regulation, taxation, restriction, and asphyxiation power grab. Governments get pretty pissed off when private entities engage in commerce of any kind outside of government control.
Have you ever held a garage sale? Did you make sure to report every penny of your earnings to the IRS?
Write failed: Broken pipe
I don't buy that...
What this causes in inflated costs for exchanges and there will probably be no real additional security of your coin should you keep it there. What we will see is a monopoly form similar to paypal today for internet transactions or the handful of credit processing companies (visa/master card/american express/and discover). While the currency will be traded like cash in the offline world the second you want to convert that money into USD for offline transactions you'll be heavily penalized. The reason companies can charge such a low rate right now is because there is no burdensome regulations. The regulations will cause so much burden the competition will be non-existent. There is already very little competition. Mtgox is proof of that.
Considering bitcoins history of being an enabler of all sorts of messed up scams, bitcoin users should be celebrating this.
You mean like legislation has somehow prevented cash from being used for a trillion times as much [whatever the bad stuff you figure bitcoin is being used for]?
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
So which heading do you use for organized crime and antivirus vendors?
Bio questions? Ask me to start a Q&A journal. Computer analogies available for most topics!
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.
[Can Someone Explain To Me The Difference] 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?
There are many important differences but I would say the most the most significant is one of simple trust. With WoW gold, Amazon coins, Facebook credits, or any other virtual currency to exist before Bitcoin you had to place your trust in the issuer of those tokens. This means that ultimately, their value is entirely dependent upon the fortunes and whims of that issuer. They could be discontinued, devalued, confiscated, or erased at any time and in a fashion beyond your control. As Bitcoin is entirely decentralized there is no such counter party risk. The protocols are open source and can only be changed by the collective agreement of greater than 50% of the total hashing (processing) power available to the network as a whole. Also, as there is no central server or organization that can be shut down it is highly resistant to coercion or seizure. Even if it were ruled illegal it would be nearly impossible for a government to completely restrict its use.
Like this comment? I accept Bitcoin! - 153sc8UUBXyp12ofQqfAWDmJrzyiKCYC1x
Game money has to be converted to real money in order to have value. You would never try to pay for something outside of a game with game money, that would just be absurd.
Absolutely not true. When the number of players in a game is limited, then to reach the people outside of the game would require the "conversion" to some more accepted form of payment that is used by the outside group. Once more people start playing the same game, the conversion becomes less and less necessary. That is true for any type of monetary exchange.
Think of this as people in Europe are playing their game and exchanging Euros, but once a European comes to the US, using the same Euros is significantly more difficult without exchanging them to the US Dollars. However, if you find a person at the garage sale who frequently travels to Europe, he might be happy to accept your Euros without converting to dollars. The same becomes true of the Bitcoin, the more people join the "game" the easier it becomes to use it as real currency without doing any conversion.
There's no such thing as "illegal download"
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.
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".
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.
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?
And that is the real problem goverments are having with bitcoin.
The FED doesn't have their say about it or get their cut. The IMF. Whatever the central agency of EU is..
Every country has that one group who is above the law because they control the money.
Bitcoin doesn't have that. Has no place for that. Thats why it'll end up being banned outright eventually. Unless they can figure out how to implant themselves into the bitchains and get their cut. keep control. monitor everything they want. and have their say about it's 'value'.
You gotta give the devil his due.
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.
To be perfectly clear: the government can regulate uses of Bitcoin within it's jurisdiction. It cannot regulate Bitcoin proper.
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.
It's pretty obvious they wanted to make it anonymous and it's a hard problem they didn't want to spent all their time on without solving all the other problems.
It's more like obfuscated at this point, it's like more like circumstantial evidence. Probably true, but can't be proven to be 100% correct.
New things are always on the horizon
Bitcoin appears to be making it easier for electronic scams to work with little risk. I can't think of 'normal' currency system that does electronic transfers 'anonymously' without any controls for reversing transactions when fraud, scams etc. were discovered.
Change is certain; progress is not obligatory.
"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.
Bitcoin is decentralized peer-to-peer cryptocurrency. It's a protocol, not something controlled by someone. There's no bank that can say you've reached your transaction limit or surprise you with a new fee out of nowhere. There's no Paypal who can decide your account looks suspicious and freeze it. There's no game company that limits its trade and creates more on its whim. There's no group who have to trust to keep running vital servers out of the goodness of their hearts.
And that is the real problem goverments are having with bitcoin.
The FED doesn't have their say about it or get their cut. The IMF. Whatever the central agency of EU is..
Every country has that one group who is above the law because they control the money.
Bitcoin doesn't have that. Has no place for that. Thats why it'll end up being banned outright eventually. Unless they can figure out how to implant themselves into the bitchains and get their cut. keep control. monitor everything they want. and have their say about it's 'value'.
You gotta give the devil his due.
Exactly this. Governments, particularly the US, will demand a means to control, regulate, and trace Bitcoin the same way they control, regulate, and trace existing national currencies.
Since Bitcoin was designed from the start to prevent exactly this type of government regulation, control, and monitoring, I cannot see any way that the US government, for one, would ever tolerate anything like Bitcoin operating legally in any significant way anywhere they can exert influence and power. Not in Bitcoin's present form, at least.
Heck, just a week ago or so I read a news report that a current IRS agent stated the he is *still*, after months of IRS scandals, being directed to unlawfully/illegally target certain political groups that the IRS is already in hot water for unlawfully/illegally targeting. You think people like that, with that little regard for the rule of law, would allow something with the anonymity and privacy features of Bitcoin as it currently exists, that would frustrate their control & monitoring, to exist?
Not likely!
Heck, the US government is at the point that they need to effectively rob everyone by "printing" money and thereby devalue the worth of all USD, as they cannot now borrow enough to keep their fiat-currency Ponzi scheme afloat, and even running the money presses full speed won't hold off the crash of the USD much longer.
Those converting their USD wealth into Bitcoins then cannot be further robbed of that wealth in the same way because the US government cannot "print" Bitcoins like USD. They cannot allow that to occur in any significant way.
Strat
Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
Way to prove your point!
Protip: I'd mod you up, but that would be cuntish.
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.
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.
The difference is bitcoin is sold on Magic The Gathering Online Exchange (No seriously, thats actually what Mt Gox stands for lol) and WOW gold is sold on World Of Warcraft Online Exchange.
One is wizard money, the other is warlock money. One exploits gullible libertarians the other exploits poverty stricken chinese macro-miners
Excuse the Unicode crap in my posts. That's an apostrophe, and slashdot is busted.