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]
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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.
Well, many countries have laws dictating what can and cannot be used as currency. If Thailand is such a country (and I honestly couldn't tell you -- their laws aren't written in English), then any currency would have to be declared valid by the government before it could be used. Otherwise I could say that, say, volcanic rocks are a form of currency and could go on exchanging rocks with other people as if it were currency... which needless to say, wouldn't be a good thing. Now, bitcoin is considerably more
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Otherwise I could say that, say, volcanic rocks are a form of currency and could go on exchanging rocks with other people as if it were currency... which needless to say, wouldn't be a good thing.
Out of curiosity, why not?
This is nothing more than barter.
Re:For the love of crypto (Score:4, Informative)
What one person calls barter, another can call tax evasion.
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And no matter how many statistics the pendants will throw out... they can't erase the fact that politicians, not mathematicians and computer geeks, are the ones making the decision on whether or not to use a given technology. -_-
How is this an argument about technology? It's an argument about the exchange of something deemed valuable, just so happen in this case technology is being used. The government can no more decide if I can swap bitcoins for USD than they can decide if I can trade a baseball card for a case of beer.
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You can use any currency you like in Thailand, including barter. They do not care. And things are, by default, legal in Thailand; same as everywhere else. Very much the opposite of everything being illegal... the reality is you might be surprised how much is not illegal!
What is illegal is to run a currency exchange without a license. And getting a license requires the government to know WTF you're doing. That is part of having and managing a currency. And what they ruled is illegal, for now, is to run a bus
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And things are, by default, legal in Thailand; same as everywhere else. Very much the opposite of everything being illegal... the reality is you might be surprised how much is not illegal!
The reality is... I could really go for a citation. That would be surprising. An internet pundit suggesting that the world is not as it appears is neither enlightening nor informative.
We're talking about the only country in SE Asia to avoid European colonization. They're not going to go all, "Ooooooh, shiny" over freakin' bitcoin and forget to safeguard their currency.
Ah, according to internet pundits, that's exactly what's going on -- "by default, legal in Thailand" would mean I could pay for everything with "Custom NuDollars", a currency I just invented. But it's cool... you got a +1 from someone who hasn't had their morning coffee, so win for you!
That said, they do not care, legally or otherwise, if you convince a cab driver to accept bitcoin or IOUs or Zimbabwe Dollars.
Said cabbie may come looking for you when
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
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What is even more curious is that people would believe such an absurd thing about Thailand, based apparently on a press release given by a disgruntled businessperson, and where the Government representative has explained the ruling quite clearly in the press and it is nothing like the revolutionary nonsense given.
Cost-Benefit Analysis (Score:3)
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!"
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What needs regulating... (Score:2)
The Federal/State governments are what need regulating. Seems like the govt has become Skynet, an omnipotent self perpetuating force.
Graft! (Score:2)
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.
OOPS! (Score:2)
Sorry for confusing you! This comment was meant for a different story. I posted it here by mistake.
Re:nowadays (Score:5, Insightful)
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.
Re:nowadays (Score:4, Funny)
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.
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And one of those two will also provide roads, firefighters, a national army to prevent foreign invasions, a space exploration program, regulation of food so we don't return to the level of 'quality' described in Upton Sinclair's "The Jungle" and a few thousand other benefits in return for the money they 'stole' from you.
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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 co
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Bitcoin's intrinsic anonymity forces the buyer to do DUE DILIGENCE. If you cannot or do not perform this, you don't have to leg to stand on when you get ripped off.
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Due diligence would mean vetting the seller you intend to transmit money to.
There isn't any reversal for a moneygram or western union to a John Doe either.
Why don't you go code a bitcoin knockoff (feathercoin and litecoin come to mind) that embodies what you feel is important? Otherwise all you do is harm bitcoin with this type of sentiment.
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Much as I would like to agree with you I no longer trust such statements because of similar things getting shut down:
Permit requirements shut down another kid's lemonade stand [theblaze.com]
The Inexplicable War on Lemonade Stands [forbes.com]
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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
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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]?
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:Can Someone Explain To Me The Difference... (Score:4, Insightful)
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.
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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.
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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. a
Re:Can Someone Explain To Me The Difference... (Score:5, Insightful)
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
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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.
No the problem is they lowered the transaction tax on large purchases. Now instead of a $500,000 house being $150,000 to seller, $100,000 to bank, $250,000 to the Fed, it's $350,000 to seller, $100,000 to bank, $50,000 to the Fed. With QE3, federal interest rates are non-existent or even negative. Banks are offering low, low interest rates to encourage purchasing home that cost roughly the same, but lock you into the cost; the seller gets more of that chunk due to higher sale prices producing the same t
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[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 d
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Simple: WoW gold or FB credits are only useful to those who are vested in said economies. If someone offered me WoW gold to buy my car I would have no use for it outside of the game. I could turn it into dollars by selling it but again to me WoW gold does not hold any value. If I were a hardcore WoW player and I saw that the transaction of WoW gold for my car was worth it, would sell my car for WoW gold.
But you could go on to argue that even though WoW gold is worthless to me it is worth money to others. Th
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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
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"Why all the interest in bitcoin all of a relative sudden after decades of ignoring all the trade in other virtual currencies?"
You are on Slashdot, and you don't understand the resiliency of a P2P network?
Napster - gone.
E-mule - still here.
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With risk comes reward or peril. In terms of BitCoins where regulators will tighten the grip will be the exchanges, that is unless you want a 100% decentralized currency in which every one trusts what everyone else has. Unfortunately for digital currency like this to actually work you have to have an arbitrator to say that you have X of whatever that can be considered tender for exchange. In the case of traditional currency you carry it around with you, paper or coin. In plastic currency you have a bank
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For a digital currency to be truly viable it needs to be 100% distributed
Like BitCoin? What aspect needs to be improved?
and invulnerable to regulatory intercession otherwise why bother?
Isn't Bitcoin about as invulnerable as a digital currency can be? The government can declare it illegal and seize any computers used, but that is true for anything, not just digital currencies.
If a big enough player throws enough computing power after it, they can take over the network, but is there any way to avoid this kind of vulnerability? As far as I understand, it should be clear if this happens.
If any vulnerability in hashes is found, bitcoin could be
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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?)
Bitcoin is decentralized, not anonymous. The previous more anonymous cryptocurrencies were centralized. Centralized cryptocurrencies sound much easier to regulate.
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),
I have no idea what you're trying to say here.
to the tracability aspect
Bitcoin does have some privacy issues. Users are able to make it hard-to-follow their history if they try. I'm hoping some future Bitcoin improvements help make tracing harder. (BIP 32 [bitcoin.it] could help as a side effect.)
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.
I can't fathom a way that this sort of thing wouldn't happen with a new cryptocurrency in
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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.
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And that would help regulate it how?
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You and I both know that if he wasn't anonymous he'd been stopped by now, I'm sure Bitcoin violates some patent, or even simpler: Satoshi may have raped a couple women too? Protecting your anonymity when you pusblish some software that can get the bankers angry makes me trust the guy more because it proves that he's not insane.
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So were you also one who bitched about Wall Street (Score:5, Insightful)
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.
Re:So were you also one who bitched about Wall Str (Score:5, Insightful)
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.
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: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.
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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
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You can get booze and hookers for bitcoin now?
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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.
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Way to prove your point!
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Protip: I'd mod you up, but that would be cuntish.
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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 curren
Currency regulation down under (Score:2)
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.
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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.
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>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.
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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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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?
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I want to pay my taxes in jars of hamster poop now. Thank you!
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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.
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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 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.
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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.
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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
The SEC mandate (Score:3)
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 mone
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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 t
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"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.
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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
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.
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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). Sho
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Re: So were you also one who bitched about Wall St (Score:2)
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)
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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.
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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.
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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?
great point. regulate currency traders or not? (Score:5, Insightful)
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".
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I think there would actually be an advantage to having both regulated currencies and an unregulated currency.
But judging by this, they don't seem to think the same way.
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Do you want financial institutions such as banks and currency traders to be thoroughly regulated?
If "regulation" means the current level of "regulation", no, I want them to be forbidden. And speculation in Bitcoins should be equally forbidden.
(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.)
Most of Wall St. is simply gambling with your mom's retirement "savings" (if the money really were saved, it should still be there). Didn't you follow the news? Lots of these "savings" have disappeared because of this gambling.
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It's not gambling; it's a game that can be odds-controlled, that can be read and understood and won on skill. It's full of people who think it's A) gambling; or B) a matter of betting on good, strong companies; or C) a matter of buying into the S&P index and watching it grow. Diversification is talked about a lot--diversify your portfolio. Okay, buy the S&P 500 index, instant diversification. Then you realize the index operates exactly like an individual security, meaning "diversification" is a
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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.)
You show complete ignorance in how the securities market works. Allow me to enlighten you.
When a company IPOs, they offer stock for sale. This is no different than any other trade, except that the owner is the particular company and thus purchase of stock from them actually funds the company. When Apple IPOed, it didn't suddenly appearify 1 billion shares of AAPL; Apple went to a big broker and said, "We're putting 1 billion shares on the market, sell them to people" and then pumped the stock price wi
So insightful, yet ridiculously wrong as well (Score:2)
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.
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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.)
What the "evil" Wall Street firms actually do is committing millions frauds every day with high frequency quoting without intent to buy or sell. What they also do is cook their own books, making up trillions of dollars that don't actually exist and when they can't hide their crimes anymore they steal the money from the American people with the help of the US government.
Do you want Obama to come down hard on them?
By hiring a PR firm?
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High frequency quoting without intent to trade is:
1. A certain loss
2. Illegal
3. Prevented by exchanges.
You don't have any idea what you're talking about.
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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.
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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 consume
Re: So were you also one who bitched about Wall St (Score:2, Insightful)
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.
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No, I wasn't one who bitched about Wall Street or the banks. Thanks for making an ass out of yourself by assuming, though!
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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 whor
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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!"
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Subphoena's are something typical for US law. In The Netherlands, the police can come search for evidence but I'm not required to give them anything and if they can't find it it's bad for them. Not giving information voluntarily is not a crime here.
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In the US, police usually don't use subpoenas -- they use warrants instead, and a person has a Fifth Amendment right against being compelled to provide information in a criminal trial (which is where the police are usually involved). Subpoenas are an artifact of civil trials and regulatory actions that require someone to provide the requested evidence, and the Fifth Amendment still applies. Is there no way in the Netherlands for a regulator to compel (force) a company to turn over documents or other infor
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None other than a search warrant. And destroying possible evidence before they knock on the door (or even fleeing through the back door with it when they enter the front door) is not a crime on itself. Usually companies comply with demands because otherwise the tax service can make their live terrible but the real scan companies usually don't.
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