Bitcoin Forum

US Government Begins BitCoin Crackdown
Tyler Durden's picture
Submitted by Tyler Durden on 05/15/2013 14:02 -0400

    European Central Bank



As we first noted here (regulation) and here (supervision), the US government has been gradually encroaching on the independence and freedom of the virtual currency. This week, as The Washington Post reports, the government escalated. The feds took action against Mt. Gox, the world’s leading Bitcoin exchange. Many people use Dwolla, a PayPal-like payment network, to send dollars to their Mt. Gox accounts. They then use those dollars to buy Bitcoins. On Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at the request of federal investigators.

It’s the first federal action against the currency. CNet has confirmed that the asset seizure was initiated by Homeland Security Investigations (which among other things is responsible for enforcing the laws associated with money laundering and drug smuggling).

As this crackdown begins, many argue that "you can’t put the genie back into the bottle," as far as shutting down the 'network' of open source transactions; but as one Bitcoin enthusiast added (sadly), "I hate to say it, but the Bitcoin community needs to start lobbying, it needs to start educating policymakers, lobbyists and influencers about the pros of Bitcoin and the impossibility or the difficulty in getting rid of all the bad uses."

Considering the great antipathy the central planners have toward such legacy money as gold and silver, is it any surprise that they would move aggressively and rapidly to halt the emergence of yet another alternative to fiat, especially one which the ECB made it very clear will not be tolerated in an insolvent world. Because all is fair in preserving the FIATH...

Via The Washington Post:

    ...

     

    Sen. Chuck Schumer (D-N.Y.) described Bitcoin as an “online form of money laundering” and called for the authorities to shutter the Bitcoin-based drug market Silk Road. Yet until recently, the feds have taken a relatively hands-off posture.

     

    ...

     

    That hands-off stance may have started to change this week when the feds took action against Mt. Gox, the world’s leading Bitcoin exchange. Many people use Dwolla, a PayPal-like payment network, to send dollars to their Mt. Gox accounts. They then use those dollars to buy Bitcoins. On Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at the request of federal investigators. It’s the first federal action against the currency.

    CNet has confirmed that the asset seizure was initiated by Homeland Security Investigations, a division of Immigration and Customs Enforcement. Among other things, that agency has the power to enforce laws against money laundering and drug smuggling.

    ...

    Jerry Brito, a scholar at the libertarian Mercatus Center at George Mason University, urges federal regulators to tread lightly. “Bitcoin has the potential to be a boon to the economy and a boon to merchants,” he argues.

     

    ...

     

    Moreover, he says, “You can’t put the genie back into the bottle.” In his view, the federal government would have as much difficulty shutting down the Bitcoin network as major content companies have had shutting down peer-to-peer file sharing. A major crackdown would merely drive the network underground, where it would continue to be used for illicit transactions but would be off-limit to ordinary consumers.

    ...

     

    “I hate to say it, but the Bitcoin community needs to start lobbying,” he says. “It needs to start educating policymakers, lobbyists and influencers about the pros of Bitcoin and the impossibility or the difficulty in getting rid of all the bad uses.”


source http://www.zerohedge.com/news/2013-05-15/us-government-begins-bitcoin-crackdown

I find their crackdown flattering.

This is being blown out of proportion.

The only reason this happened is because Mtgox were foolish enough to lie and say they aren't a 'money transmitter' and try to operate without a license.

If they had the appropriate license this wouldn't have happened. A lesson to other exchanges in the future.

Indeed. Lets not forget that bitcoins are being used on the silkroad as well.  I think that probably has a lot to do with the scrutiny for money laundering

+1
Maybe this opens the door for a legitimate business.

This cannot be said enough.  The government has had previous chances to go after BTC and has declined.  They are only targeting a company that broke the law with this warrant. 

If Mt. Gox is smart (which that's debatable), they'll immediately reach a deal with the government, in which they agree to properly register and pay whatever penalties/fines are assessed. 

The government is NOT going after BTC.  Atleast not yet. 

O god. You think the shit is fucked up now just WAIT until the Governments start getting involved. It will become one big old clusterfuck. Regulations.

You... dont... want this to happen.

And coming from this guy Sen. Chuck Schumer (D-N.Y.)... I would not waste my spit on this guy ( sorry NYers... after all you gots nanny bloomy too hows your big gulps LOL )

Drug dealers on the streets don't use credit card machines to have money deposited into their bank accounts exchanged with drugs? Or, lets go this route, USD cash is not being used on the streets of USA for drugs?

btc=cash
silkroad=streets

One thing I would imagine, silk road is safer to shop from, rather being shot for your five bucks for a hit of blow, rock, nick sack of weed.

I wonder how far the percentage has fallen of the murder rate since silk road.

Small correction, it was Mutum Signium that didn't have the license.  

Give it time. This is tax money right here. You know the gov is licking their chops at the thoughts of extra money into the pet projects that they can piss away.

No just their way to justify whatever they are planning on doing.

THIS X 1337

Fuck Tyler Durden. He doesn't even trade crypto.  :D

Exactly, this is why I make my point. It's utterly fucking bullshit.

Fuck tyler durdan he only exists for about 1.5 hours when i press play on the DVD. And it's not a crackdown but typical overhyped zerohedge style. It's because dumbass Mt.gox doesn't want to register properly, than senor Mt.Gox you will get fucked, simple as that.

They are not in the US so they don't have too, but then they can't do business with US customers.

If there is one thing I have learned in my 35 years of life... is that the Gov never usually has the "best intrests" in mind. Granted, they might seem good, but once you start getting the bureaucratic crap involved it becomes one big clusterfuck.
Its funny this reminds me of the Building inspectors bumper sticker here in town ( I live in a relatively small town ) and it says " do you have a permit for that?"

+10000   as new yorker i know  cant say more  but one can  understand when the phrase  : we have the best gov MONEY CAN BUY: comes from  enough said..

Exactly! For starters, MtGox ≠ Bitcoin. If anyone read the warrant, it is clearly intended to go after MtGox because of their failure to comply with US law, when they established US bank accounts, and planned to do business in US currency with US citizens. If this were to happened to Jo Blow's Brokerage house, it would merely get a back page mention, as this type of stuff happens everyday.

If anything, this makes me more confident in the future of Bitcoin, as exchanges will be more inclined to follow the laws in the countries they plan to operate within. It amazes me that when a government steps in to ensure the customer is protected, everyone goes all crazy. Who would you trust more, a government enforcing its clearly identified laws to protect customers of financial institutions from fraudulent activity, or some schmuck based in another country who lies on business applications and has questionable business dealing with other companies?

lol  they buy pre paid cards

instead of them going after pre paid cards where one can buy amex pre paid   and go anywhere they want in the world  they go after these coins....
one   said best money laundering scheme is  pre paid credit cards  you can carry way beyond the 10k limit out of any country

LOL  WUT? You honestly think that the feds are capable of not turning stuff to shit? Who the fuck you think created the housing bubble? Then the gov swings and takes back what they wanted therefor again making it next to impossible to get a loan unless you got next to perfect credit.

Im not saying some regualtions "might" be good. What I tend to see time and time again is that "some" turns into a lot.

Who know maybe that will be the end of it. I doubt it though. The saying is if you give them an inch they take miles.

I have an idea. How about I just don't suck it? How about I just go on using bitcoin no matter what some gov does? They can throw their bitcoin laws in same waste bin that contains anti-filesharing laws, drug laws, gun laws and other laws that Americans have no intention of following.

I never said the government is the epitome of all that is good and pure, but all this FUD is getting out of hand. MtGox, or more correctly its US based subsidiary, broke US law, and now they are facing the consequences, pure and simple. Any further reading into that is pure hyperbole and speculation at this point.  

Bitcoin users Seeking out BitBars to secure there digital wealth!!! Seen a 500% increase in Bitbars

Careful, many of us in the early poker community took the same attitude of 'It's only a few shutdowns' or 'It's their own fault because' and then the UIEGA was passed. No big deal, the gov't cant control foreign poker sites.  The gov't started to slowly make it more and more difficult to move USD to/from sites. Boom, Black Friday hits and another leg is chopped off.

Here's what many new to this fight might not realize. They don't have to stop it, they simply need to make it difficult enough for everyday Joe Sixpacks to move USD.. that's how you cripple it.

thats   what happened..  party poker was in Cyprus  full tilt and rest Costa Rica     where are they now?:)
  no usd   no markets after all   its here that the interest  is created... where the money is... everyone else is just a gold digger:) 

There is no reason the government would target Bitcoin. That would be like throwing away science because it had the potential of putting psychics out of business.

i was always wondering where all these power ends up?:)  can one use all this to create a malicious   attack? direct all this to  one purpose and reward you in bbq coins be it ftc or ltc lol etc?  just wondering what can a script do  stealth mode and direct  lets say to crack  databases somewhere?:)

This is an alt-currency sub-forum. Its way overcluttered as is, do we really need this discussion here mods?

"The land of the free and the brave ..."

Would Galileo also lol?

Of course, any statement which purports actions have been taken by "the government" is likely false.  "The government", depending who you ask, consists of 30 to 100 percent of the population, and also includes large groups which fight each other like wolves over a kill.  That's on a good day. 

Precisely- very well said.  No worries here folks, carry on.  This is not a threat to the industry, but rather more sign of its acceptance.

mt will down

"First they ignore you, then they laugh at you, then they fight you, then you win."
 8)

No reason? Really? No reason? Look, I want Bitcoin to succeed as much as the next guy but let's be really honest with one another here. Bitcoin is a real threat to the existing banking system.. you know, the banking system that benefits those they get to utilize the currency first.. before us peons get it. 

Tell the guys over at Liberty Dollar that there is nothing to fear.

How stupid can they be? They are *the* definition of a money transmitter. Serves them right in my opinion.

lol they are crackdown mtgox not bitcoin