New York's Financial Regulator Subpoenas Bitcoin Companies 259
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."
For the love of crypto (Score:5, Informative)
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/ [qz.com]
Re:For the love of crypto (Score:0, Informative)
Think about that for a moment.
- yeah, it means that people are 100% slaves and they are only allowed to do what is 'legal' and everything else is deemed illegal to do.
It's amazing what you can do to a population and how rich and powerful you can be personally once they are only allowed to walk in lockstep on a predetermined path.
Why I am not surprised? (Score:0, Informative)
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.
Re:Can Someone Explain To Me The Difference... (Score:4, Informative)
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.
Re:So were you also one who bitched about Wall Str (Score:5, Informative)
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.
Re:For the love of crypto (Score:4, Informative)
What one person calls barter, another can call tax evasion.
Re:For the love of crypto (Score:4, Informative)
And even there you're over-stating it. They ruled that it may be illegal to run a bitcoin exchange in Thailand, because currency exchanges have to be licensed, and they can only be licensed for currencies that the Government has approved (eg, all normal currencies)
Simply using bitcoin in Thailand is totally legal. Things without a law are not banned in Thailand. Barter is not banned in Thailand, and if bitcoin isn't yet recognized as a currency, then a transaction using it would simply be barter.
And in fact even a bitcoin bank is still allowed in Thailand, according to the ruling. If it is allowed to be called a "bank" or not is not clear. But as long as they aren't exchanging bitcoins for Thai Bhat, they should be okay.
"For now we asked they not involve themselves with the baht because what they do may be a way to speculate on the exchange rate. Hence, we asked for time to look at the issue first" -- Bank of Thailand Governor Prasarn Trairatvorakul, from parent post's link
Re:So were you also one who bitched about Wall Str (Score:4, Informative)
To be perfectly clear: the government can regulate uses of Bitcoin within it's jurisdiction. It cannot regulate Bitcoin proper.
Re:So were you also one who bitched about Wall Str (Score:2, Informative)
"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.
US government can regulate financial instruments (Score:4, Informative)
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.