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."
Your papers, comrade! (Score:1, Insightful)
... although I have to admit that New Yorkers pretty much keep asking for that level of government meddling in their lives.
Legalised racketeering (Score:-1, Insightful)
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.
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:0, Insightful)
Bitcoin has nothing on an established currency, like the US dollar, in the 'enabler of all sorts of messed up scams' department, the biggest one, of-course being the fact that the US government (through the Fed) conjures up the infamous USD out of thin air (or out of a computer adding program).
The USD is directly or indirectly responsible for the US economic catastrophe (the one that's coming and all the previous ones since 1917, when the Fed was allowed to monetise US Treasury debt by the Congress).
So saying that the government in fact must be allowed to regulate currency in order to prevent fraud and other 'messed up scams' and various activities that are less than crystal clear and honest, is at best extremely naive.
In reality of-course people decide what money is and before government comes up with a paper money scam, people saw precious metals as money. Precious metals are still money, though government sets all kinds of barriers to prevent people from using the metals as money by taxing, get this, 'capital appreciation' or taxing rising USD value of metals as income though in reality of-course, the amount of the metal that is in possession doesn't change over the time that it takes government to print yet another bajilion dollars.
Government fighting scams? Ha! You miss the entire point - government IS the scam.
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: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.
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.
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".
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.
Re:So were you also one who bitched about Wall Str (Score:2, Insightful)
Re:So were you also one who bitched about Wall Str (Score:0, Insightful)
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 [wiktionary.org]?
Contemplate that.
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