Bitcoin Forum

http://www.bbc.com/news/technology-26538378

"New York regulator plans 'regulated' Bitcoin exchanges"

New York's financial regulator has called on firms to submit proposals to set up "regulated" exchanges for digital currencies like Bitcoin.

The state's Department of Financial Services (NYDFS) said it wanted to better protect consumers, and prevent money-laundering.

It comes as a top Bitcoin exchange, Mt Gox, filed for bankruptcy last month.

Bitcoins have been gaining in popularity recently, but they are not governed by any financial regulator.

"The fact is that virtual currencies are unlikely to disappear entirely," said Benjamin Lawsky, New York's superintendent of financial services.

    The recent problems at Mt Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges”

"As such, turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators."
'Stronger oversight'

The lack of any regulatory control or oversight of Bitcoins has triggered concerns on various fronts.

It is difficult to trace transactions carried out using Bitcoins - one of the factors behind their popularity - and the currency has been linked to illegal activity online.

Bitcoins are also seen by some as a route for tax evasion and money laundering.

Russia has declared transactions using the digital currency illegal, China has banned its banks from handling Bitcoin trades, and there have been calls for the US to do the same.

Singapore has imposed a tax on Bitcoin trading and using it to pay for services, after classifying it as goods, rather than a currency.

 Mt Gox customers have protested against the exchange, claiming the firm is a fraud

Earlier this month, the Japanese government also said Bitcoin is not a currency and that some transactions using the virtual unit should be taxed.

The collapse of Mt Gox has only added to the concerns.

The firm filed for bankruptcy in Japan in February after losing about $473m (£284m) worth of customers' bitcoins to what it says was a hacking attack.

"The recent problems at Mt Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges," said Mr Lawsky.

"Consumers should understand and receive appropriate disclosures about the potential risks associated with using virtual currencies or any other financial product."

Well, many of you wanted "mainstream acceptance" of crypto and now you're getting it..........................right up the Strada Chocolata!

Thanks a lot!

My $.02.

;)

Sorry, Charlie, we accept only the finest tuna and your post is not it!

New York regulations would cover all exchanges, no matter where they are located because if the exchanges wanted to do any business at all in New York, including sending or receiveing fiat or crypto, the exchanges would have to conform to New York law.

My $.02.

;)

"The lack of any regulatory control or oversight of Bitcoins has triggered concerns on various fronts."

I may be misunderstanding that sentence from the article, so perhaps you could better explain to me just what it means.

My $.02.

;)

People can always trade person to person, localbitcoins, etc. so they can regulate exchanges all they want. They regulate it too much and people will start trading person to person.

I view it as a good thing for bitcoin, as it will help with adopting bitcoin.

There is a majority of people that are not of an anarcho-libertarian viewpoint, and would feel more comfortable trading bitcoin in a regulated environment.

All a government can really control is the point at which fiat currency is traded for bitcoin in significant quantities in its jurisdiction.

If an extreme libertarian wanted to avoid the regulated exchanges, then I'm sure that unregulated exchangers would provide the service at a premium.

Great title:

Holy Self Awareness Batman!

Someone finally gets it!

Kudos to you!

My $.02.

;)

A quote from a President that oversaw a record increase to the US deficit during his time in office.  Just saying...

I don't find it hard to find traditional financial services, wall street firms and banks involved in massive consumer fraud and all kinds of illegal actions.


Bitcoin do not need regulation.

And it's not about protecting consumers and preventing money laundering, it's about taxes.

If you wanted to avoid money laundering, you would actually do something with the big banks that do facilitate this, but this never happens...

Holliday -

Please remember you're dealing with folks who just blindly hate anything related to government.
Its not about rational thought or actually reading whats written.

You are correct.
They are regulating the centralized exchanges.  Not Bitcoin.
Because Bitcoin is unaffected.  And this is only temporary.

There are *decentralized* exchange services currently in the works.
I am hoping everyone in the BTC community is waiting, salivating, for the decentralized exchange services on the way.

In the end, both parties can be happy.  No government, and no Goxxing.
In the meantime, it will help Bitcoins reputation, for people to have peace of mind about an exchange. 
And it will shut up quite a few idiot journalists and naysayers.

But behind the scenes, the truly decentralized exchanges are being completed. 
When they come forward, it won't matter if NY regulates centralized ones.

Because as Holliday stated:   
New York is not controlling bitcoin.
New York is controlling fat, latte-carrying idiots who write bad code.

-B-

New York, isn't it the same folks that made AirBnB illegal?

I'm From The Government And I'm Here To Help You Go Bankrupt Or To Prison!

Lets be clear. Nobody is regulating bitcoin...the protocol.   They are only regulating the links between fiat and btc.  Would you do business with an unregulated bank? Regulation of exchanges are invenitable.  Its better for the community to embrace and have a say on how its regulated the resist and leave it to government officials who may not understand what they are doing. We need to engage governments so our voice is heard.

Thank you for your insightful and accurate post.

My $.02.

;)

The problem is , the gov never ever has the best intrests down the road. What happens is, just a little bit... then over time it gets layer upon layer of regs and before you know it, its bogged down with regulation and taxes. That is how the government works. Not to help me, you , or your friend... they are only concerned of protecting their own, which is big business and banks.

Well, here comes the government from Brooklyn, We are now safe! Regulate them, MT GOX just got them screwed they are now vulnerable populations.

I changed the subject to something with a little more shock value and click appeal.  ::) Probably more likely too. Why don't you post all these news threads in the Press sub forum.

To be fair- the United States does not dictate what other countries will do with regulation (although it may influence it in some cases). I'm betting most people here aren't American or US based- so when you say 'all exchanges' that comes across as fairly sensationalist to someone living elsewhere. The thing that I love about Bitcoin is that although the US will influence adoption, it does not necessarily need the US to drive adoption to succeed- and that's the beauty of a decentralised currency- you can regulate locally, but it is impossible to regulate the whole, internationally.

The USA can and does enforce its home laws overseas under what are termed the "long arm" statutes.

Example, the operators of several online casinos were arrested, charged and convicted of violation of US law even though the online casions were located in Europe.

If he US requires that ofshore exchanges conform to Fin-CEN and anti-money laundering states and those exchanges fail to comply, they most assuredly can be blocked from doing business in the USA.

My $.02.

;)

this^

Anyone who wants to be a "regulated" exchange for bitcoin will be operating at a disadvantage to all the other exchanges that operate outside of regulations. Normally this is curtailed by the state using guns to shut down "unregulated" businesses, but that can't work in bitcoin-land.

I have to say I really enjoy watching these guys like Chuck Schumer, Manchin, Lawsky, and more all trying to do the impossible.


Hey, don't smear lattes with Mark Karpeles. The pure deliciousness of coffee, cream, and sugar blended together in an energy-producing beverage should in no way be associated with fraud.

http://www.youtube.com/watch?v=b3_lVSrPB6w

New York has no power over anything. Cannabis is illegal here in New York City, but guess what I'm smoking as I type this? They can pass all the laws they want, good luck enforcing them.

Cryptocurrency in the near future will begin moving away from centralized exchanges anyway, as they are a weakness.

You're right in that as long as you're not caught - any law does in fact not have any effect. But there are people being caught doing exactly what you do, so the law do have a consequence for somebody somewhere. It's nice and dandy to ignore the law, but there are enforcement of it, although this is quite arbitrarily.

Trading person to person isn't going to protect you if the authorities suspect you're doing something wrong.

http://www.virtualcurrencyreport.com/2014/02/two-florida-users-of-localbitcoins-com-arrested-for-money-laundering-and-unlicensed-money-transmission/

Uhh, yes it does protect you. If you trade using localbitcoin and cash, it is anonymous and therefore you are protected 100%.

"unenforceable law", just like copyright law.

They're already targeting high volume sellers on localbitcoins (just as high volume e-Bay sellers and high volume PayPal users have been targeted in the past).  It's not "anonymous" if you're meeting someone to sell them BTC for cash and that person has the authority to charge you with being an unlicensed money transmitter on the basis of a single transaction (and localbitcoins sales at a distance have been fraught with scams and fraud).

Everyone needs to stop thinking that there's some perfect solution which will last forever.  Regardless of what methods you try to use to stay under the radar, the authorities will eventually catch on to them and target them (just as they do with people trying to hide conventional financial transactions or game the system).  localbitcoins ads themselves are a trail (just like SR ads are a trail).

btc can't be controlled  ;D

My 1000bucks

Watch'em try!

They'll fuck it up for a lot of people.

My $.02.

;)

"I'm From The Government And I'm Here To Help You!"  :D

They just don't get it, do they?

My $.02.

;)

They can affect price negatively which is fine for me, drop it to 10 USD so I can buy a thousand more BTC! Other than that ... see BitTorrent.  ;D


One gotta be really dumb to deal with Bitcoin and reveal his or her identity to total strangers. Need fiat? Work for it, don't exchange BTC for it, tard!

Control is moving forward; Please read this note from Vault of Satoshi:

Mar 06/2014 21:12 - Important announcement for US customers
It is with great regret to inform you that we will be ceasing our US operations effective today. If you reside outside the United States this does not affect you.

We’ve made this decision not because of any specific legal challenge or threat, but because we feel the regulatory environment in the US is becoming increasingly hostile toward Bitcoin, and more specifically toward exchanges trading in digital currencies. We’re heeding the warnings of Bitcoin Foundation and BitInstant founder, Charlie Shrem, who recently conducted a troubling interview with “Let’s Talk Bitcoin.” If you want to hear more about the situation exchanges face operating in the US, we recommend you listen to episode 87 of “Let’s Talk Bitcoin” here: http://letstalkbitcoin.com/e87-the-captive-and-the-mountain

We’ve made repeated attempts to comply with FinCEN regulations, but their online form submission process will not allow us to post reports from our headquarters in Ontario, Canada. They refuse to accept printed paper reports, and their drop-downs don’t include Canadian options, making it impossible to the file the required documentation properly in order to comply. Despite repeated inquiries into how to properly file reports from Canada, we have yet to receive a satisfactory response. They’ve literally made it impossible for us to run our business in compliance with their regulations.

This was best option for me to purchase btc.  I assume other sites will most likely follow this with similar actions.

Which is exactly why localbitcoins has a feedback score system, just like eBay. Only do business with trusted members. Problem solved.

See above.

Yeah, that strategy sure worked out great in the war on drugs. Sure worked out great in the war on piracy, too.

http://2.bp.blogspot.com/-Ni809g5KQYA/TiHKDOSU2pI/AAAAAAAABK0/Hgl9GIsIH2Y/rhony-luann-eyeroll.gif

I'm not saying dipshit terrified governments aren't going to use every evil tool in their evil toolbox to try and stop this financial revolution from happening.

I'm just saying they're going to lose.

http://www.youtube.com/watch?v=kIbEj1CIpuU

This was bound to happen anyway.

the more I think about because of the nature of BTC / Crypto's, I think the harder a govt tries to regulate they will only force evolution faster and drive price up....

the nature of BTC is that it can't be manipulated at the whim of a single entity, and even if it could a crytpo that is more robust will arise.

Its hard to think of an endgame where cryptos don't take 99~100% over from fiat.

1. Why can't BTC be manipulated?  The Fed manipulates the dollar by either selling bonds (and pulling dollars out of the system), or by buying bonds (and putting dollars into the system).  What's to stop the major governments from buying and selling BTC to affect the supply/demand, and therefore, the price?

2. Actually it's very simple to think of a world like that.  A currency that can't be manipulated isn't a great thing for large economies.  Like them or not, we would be in a great depression right now had the major central banks of the world not done what they did back in 2007/2008.  Read up on economies in the 1800s.  Many people, especially farmers, we're utterly devastated by unstable currency prices.  And a great depression in today's world would be far far worse than the 1930s.

I think its good news. NYC cannot control the btc protocol, but it should be a good thing to have controlled exchanges.
So people have a choice. Trade person to person or trade by a controlled exchange. Especially when you want to trade a big amount of btc to buy a house or a nice speedboat or so. Its safer to do that at a kind of post office, secured and controlled.

Other good point: at least NYC accept the btc as a currency. That's good.

Without revealing too much about my personal identity, I will tell you that I am extremely well-versed in game theory and mathematically "gifted".

There is no possible endgame that involves the survival of fiat. It's already dead, the world just hasn't realized it yet.

You're looking at 15-20 years on the outside.

Regulated exchanges. How would it be a good thing?

Would fiat deposits be insured or guaranteed, would btc deposits be the same? What when it eventually came to a breach, and the insurer/state would have to cough up the money, would they follow through, or would an insurance company/state fight like hell in court not to pay out. I guess we will not see until it does happen.

What about current collapses in New York in the existing financial industry, has customers been made whole, or have they been left alone to rot? If the latter, what guarantees will we have that anything will be different with bitcoin?

What about identity theft, what can prevent a single employee from coping identity data, and misusing or selling it ?

Interesting times ahead.

If past history is an indicator of future history, the implication is that US exchanges would be socialized.   Right or wrong, the US government socialized the losses of the US financial system in 2008,  and if bitcoin is a significant part of the economy, then the losses from a failed bitcoin exchange would be distributed to US taxpayers.  Right or wrong, an exchange with this kind of insurance would increase consumer confidence.

It could be good, but there's three big points you're missing. 

The first is the users of BTC.  As of now, it's pretty much 3 groups:
1. Libertarians / people who want a non-government currency.  To them, this could be a downside.  They'll see BTC flowing through US regulated exchanges as a down side, and many will simply go back to dollars, as they'll take the convenient system vs. the inconvenient system if both are regulated.  Not to mention that regulation = people will pay taxes on earnings.
2. People trying to get rich.  To them, it will initially be a good side, as the chance of a Mt. Gox will drastically decrease.  However, taxation may keep some people out of the regulated exchanges.
3. People using BTC for illegal purposes.  These people will likely be forced to continue to use 3rd party exchanges that are not protected.
Basically, 2 of the 3 groups of users (though, likely the two smaller groups), will not be pleased by this.

The second issue is that there will still be a need for non-regulated markets.  Many BTC users are not going to go through regulated exchanges, so there will necessarily be the need for unregulated exchanges.  However, as normal BTC users will prefer to trade on regulated exchanges, there will be a price gap between the two exchanges (with the non-regulated exchanges buying and selling below the ask/bid of the regulated exchanges).  This will cause one of the two to happen:
1. There will be plenty of investors willing to take on arbitrage risk between the two exchanges (i.e. buying lower at an unregulated exchange and selling higher on the regulated one), and the price difference between the exchanges will be small or non-existent.  The risk with this is that the government may get involved if it sees that criminal elements (Silk Road, tax evaders, other criminal groups/sanctioned nations looking to transfer money) can easily dispose of BTC.  Basically, they'll act to prohibit the transfer of BTC from the two exchanges, and potentially will start freezing assets of anyone who deals with the non-regulated exchange.
2. Investors will be afraid of the risk, and will not buy from non-regulated exchanges.  If this happens, then the sole markets where BTC is more effective than cash/credit will move away from BTC.

The last issue is a combination of the above two.  If you run out the people who actually want/need to use BTC as a currency, you're essentially left with just speculators...which would make BTC a very dangerous investment.

MtGox was a regulated exchange - they were forced to ask for ID.

Regulated exchanges are just government honeypots - derp.

This.

This is all about power and control, people. They want to know who we are, and how much money we have. So they can take it.

You are 100% spot on!

There are ways however to minimise government intrusion.  Corporations, both domestic and offshore, methods of payment of conversions which are legal but don't realy show up as payments for conversion, etc.

My $.02.

;)

The IRS can't even keep up with 1099 income - I should know  ;) - yet they really believe they can track the entire blockchain of bitcoin to individual identities? Plus all the blockchains of all the other cryptocoins??

That takes some serious delusion.

It is not the blockchains they are tracking it is the exchanges.......................

My $.02.

;)

I'm From The Government And your money is Mine.

Sure it is, just as soon as you invent the technology to hack my brain.

Does that include all the ATMs? ..and quit with the $.02

Yes, indeed!   Government folks have no real stake in the outcome as those who would ultimately be harmed by the regulation -- and are BAD decisionmakers.

 "Modernity has replaced ethics with legalese, and the law can be gamed with a good lawyer. "
 
"We are witnessing the rise of a new class of inverse heros, that is bureaucrats,
bankers, davos, attending members of the IAND, ..., and academics with too much
power and no real downside or accountability, they game the system: while citizens
pay the price.   At no point in history,  have so many non-risk-takers, that is, those
with no personal exposure, exerted so much control."
        ~~~ Nassim Nicholas Taleb, "Antifragile" [on Accepting Uncertainty and Embracing Volatility.]

ATM transacations are tracked but you can disguise your transactions using corporations, etc.

My $.02.

;)

But what do we do in meantime , before our coins appreciate exponentially , to make sure we feel like we are wealthy and winning ?   ;D

As long as I use a bitcoin atm that doesn't require any personal info than nothing can be tracked. Disguise with a corporation? Please explain.

I`m from the Government And I`m Here To Help You :o

LostDutchman, can I have your 0.02 in BTC ;D

Uh, no; conversion costs would be too high for such small amounts.

My $.02.

;)

ok I`ll take your 1.00BTC

LOL!

Nice try!

My $.02.

;)

You do nothing. You wait for this equation to play itself out.

http://static3.businessinsider.com/image/5165a9a0ecad045b0d000000-600-249/djlasir.jpg

This is the same instruction I gave to friends and family when Bitcoin was $100. Few of them listened.