Bitcoin Forum

"Sen. Joe Manchin, who has not exactly been a booster of the cryptocurrency, is asking federal regulators to "ban" Bitcoin because it's "highly unstable and disruptive." "

Source: http://news.cnet.com/8301-13578_3-57619592-38/sen-manchin-demands-complete-us-ban-on-bitcoin/

A US senator is asking the federal government to take this remarkable step: completely ban Bitcoin.
Joe Manchin, a Democratic senator representing West Virginia, sent a letter Thursday to the Treasury Department, the Federal Reserve, and other regulators characterizing the virtual currency as encouraging "illicit activity" as well as being "highly unstable and disruptive to our economy."
Manchin, who is a member of the Senate banking committee, suggested in the letter -- titled "Manchin Demands Federal Regulators Ban Bitcoin" -- that a complete prohibition was appropriate because Thailand, China, and South Korea have already enacted severe restrictions or bans of their own.
It's unlikely that the Federal Reserve and the executive branch possess the statutory authority to prohibit Bitcoin without a new law enacted by Congress and signed by the president -- making Manchin's letter something of a publicity stunt. On the other hand, regulators likely do have the authority to levy more rules and restrictions on Bitcoin-related companies that would increase costs, decrease interest among investors, and, at the margin, put some startups out of business.
Manchin and fellow Senate Democrat, Charles Schumer of New York, have targeted Bitcoin-related enterprises before. In a June 2011 letter to the Justice Department and DEA, the senators demanded a crackdown on the online marketplace Silk Road, saying: "The only method of payment for these illegal purchases is an untraceable peer-to-peer currency known as Bitcoins."
The letter may not have been accurate -- Bitcoin is more traceable than many people realize -- but it had the desired effect. Last fall the FBI indicted a San Francisco man for allegedly operating Silk Road, and additional charges were levied this month.
I've asked Manchin's press office to elaborate on what existing federal laws could be used to ban or outlaw Bitcoin, or whether new laws would be needed. I'll update the story if they respond.
The text of the letter is below.

Dear Secretary Lew, Chairwoman Yellen, Commissioner Curry, Acting Chairman Wetjen, Chairman Gruenberg, Chairwoman White:
I write today to express my concerns about Bitcoin. This virtual currency is currently unregulated and has allowed users to participate in illicit activity, while also being highly unstable and disruptive to our economy. For the reasons outlined below, I urge regulators to take appropriate action to limit the abilities of this highly unstable currency.
By way of background, Bitcoin is a crypto-currency that has gained notoriety in recent months due to its rising exchange value and relation to illegal transactions. Each Bitcoin is defined by a public address and a private key, thus Bitcoin is not only a token of value but also a method for transferring that value. It also means that Bitcoin provides a unique digital fingerprint, which allows for anonymous and irreversible transactions.
The very features that make Bitcoin attractive to some also attract criminals who are able to disguise their actions from law enforcement. Due to Bitcoin's anonymity, the virtual market has been extremely susceptible to hackers and scam artists stealing millions from Bitcoins users. Anonymity combined with Bitcoin's ability to finalize transactions quickly, makes it very difficult, if not impossible, to reverse fraudulent transactions.
Bitcoin has also become a haven for individuals to buy black market items. Individuals are able to anonymously purchase items such as drugs and weapons illegally. I have already written to regulators once on the now-closed Silkroad, which operated for years in supplying drugs and other black market items to criminals, thanks in large part to the creation of Bitcoin.
That is why more than a handful of countries, and their banking systems, have cautioned against the use of Bitcoin. Indeed, it has been banned in two different countries--Thailand and China--and South Korea stated that it will not recognize Bitcoin as a legitimate currency. Several other countries, including the European Union, have issued warnings to Bitcoin users as their respective governments consider options for regulating or banning its use entirely. While it is disappointing that the world leader and epicenter of the banking industry will only follow suit instead of making policy, it is high time that the United States heed our allies' warnings. I am most concerned that as Bitcoin is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency.
Our foreign counterparts have already understood the wide range of problems even with Bitcoin's legitimate uses - from its significant price fluctuations to its deflationary nature. Just last week, Bitcoin prices plunged after the currency's major exchange, Mt. Gox, experienced technical issues. Two days ago, this exchange took its website down and is no longer even accessible. This was not a unique event; news of plummeting or skyrocketing Bitcoin prices is almost a weekly occurrence. In addition, its deflationary trends ensure that only speculators, such as so-called "Bitcoin miners," will benefit from possessing the virtual currency. There is no doubt average American consumers stand to lose by transacting in Bitcoin. As of December 2013, the Consumer Price Index (CPI) shows 1.3% inflation, while a recent media report indicated Bitcoin CPI has 98% deflation. In other words, spending Bitcoin now will cost you many orders of wealth in the future. This flaw makes Bitcoin's value to the U.S. economy suspect, if not outright detrimental.
The clear ends of Bitcoin for either transacting in illegal goods and services or speculative gambling make me weary of its use. The Senate Homeland Security and Governmental Affairs Committee issued a report just this month stating, "There is widespread concern about the Bitcoin system's possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation." Before the U.S. gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.
Sincerely,
U.S. Joe Manchin III
United States Senator

::) Yawn. I think the dollar encourages more illicit activity. I'd also love to know how it's 'disruptive to the economy'.


Yeah, but last time I checked America wasn't Thailand, China, or South Korea. Land of the free, eh?


Good and so they shouldn't. I'd love to know on what legal grounds they could, or at least try to, ban it on.

Wow, these senators really have nothing else to do?  Like fix this country, create jobs, settle their issues in the house, healthcare, education...

Nah, Bitcoin banning is more important!

Well that escalated quickly.

"Manchin, who is a member of the Senate banking committee"

It's just in his friends's interests to ban bitcoin :p

Guy is a lost cause ... who voted for idiots like these?

Edit: not to mention he comes across as an extremist whackjob ... banning peaceful commerce, really?

How many have written him so far? I will write an email to him tonight. Us talking to each other here is not going to derail his train. Let your representatives know or face the ignorant legislation they dream up.  

Time to replace Sen.Manchin I guess ^^

Writing to him is a waste of time.  He is a zealot.  Write to YOUR representative, voice your opinion and ask him or her point blank if they support Sen. Manchin's dubious (and almost certainly unconstitutional) proposal.

but supernintendo wants bitcoin! so go to hell Machin  :P

Changes viewpoint a bit

All empires wish to maintain their empire and that impacts their rationale
Justice is a part of politics but stability is human nature in his case the Federal Reserve System
Since Bitcoin is not going to go away all you can do is moderate and this impacts his opinion to the extreme point of banning any changes to the status quo

he changed his mind: now he is PRO btc:

http://www.tippercoin.com/#/profile/Sen_JoeManchin


 ;D

On second thoughts, he's probably just trolling ... good one senator troll, attention whore.

Senator Manchin was able to introduce his bill because the stupid Americans do not support this bill written by the brave American patriots militia groups:

BREAKING NEWS: American Patriots Militia Groups taking down the Federal Reserve
https://bitcointalk.org/index.php?topic=485187.0

Is this the birth of the Bitcoin NRA
Good old funding hehe

I have to ask a serious question, base on what can the government "ban" bitcoin? Isnt that against constitutions of US citizens?
 

Nearly everything the government does violates the US Constitution. And the courts usually rubber stamp the fuck out of everything, no matter how blatant, no matter how many innocent lives it costs.

Actually you will see that the Founding Fathers of the US constituion had very different viewpoints on how financial transactions were handled
Many of them actually hated the idea of a Federal Reserve and fought against it
Madison was the one who wrote the Second Bank of the United States into existence with his arguments in the Federalist Papers and the popularity of the greenback
But over time banking interests from Britain brought back the Federal Reserve and  Centralized Banking

I'm sure if the founding fathers had a say in the constitution as it is written now and could apply Bitcoin to it we would see very strong arguments for this type of system over a centralized one.


____
Excerpt from the Money Masters
https://archive.org/stream/TheMoneyMasters/Money_Masters_djvu.txt

What one has to understand is that from the day the Constitution was adopted right up to today, the folks who profit from
privately owned central banks, like the Fed, or, as President Madison called them, the "Money Changers," have fought a
running battle for control over who gets to issue America's money.

Why is who issues the money so important? Think of money as just another commodity. If you have a monopoly on a
commodity that everyone needs, everyone wants, and nobody has enough of, there are lots of ways to make a profit and also
exert tremendous political influence.

2



That's what this battle is all about. Throughout the history of the United States, the money power has gone back and forth
between Congress and some sort of privately-owned central bank. The American people fought off four privately-owned
central banks, before succumbing to the first stage of a fifth privately-owned central bank during a time of national weakness
- the Civil War.

The founding fathers knew the evils of a privately-owned central bank. First of all, they had seen how the privately-owned
British central bank, the Bank of England, had run up the British national debt to such an extent that Parliament had been
forced to place unfair taxes on the American colonies.

I n fact, as we'll see later, Ben Franklin claimed that this was the real cause of the American Revolution. Most of the founding
fathers realized the potential dangers of banking, and feared bankers' accumulation of wealth and power. Jefferson put it this
way:

"/ sincerely believe that banking institutions are more dangerous to our liberties than standing armies. Already they have
raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from the banks
and restored to the people to whom it properly belongs. "

That succinct statement of Jefferson is in fact, the solution to most of our economic problems today. James Madison, the main
author of the Constitution, agreed. Interestingly, he called those behind the central bank scheme "Money Changers." Madison
strongly criticized their actions:

"History records that the Money Changers have used every form of abuse, intrigue, deceit, and violent means possible to
maintain their control over governments by controlling money and its issuance."

So, who's up for some sort of organized, distributed bitcoin-oriented campaign/activism to unseat this guy?

Bitcoins are disruptive to the economy? Does Congress has authority to ban Bitcoins, but they can pretty much regulate it however they see fit. It's a basic Constitutional power.

This guy is a total shill for the banks.

Once they ban Bitcoin in the USA it will be a perfect money laundering tool for the Banks and Government.

It's amazing how these rich people feel like they should have an exclusive form of currency for fucking the system.

Thanks Mark,for bringing this awesome negative attention to Bitcoin,may you rest in peace forever!!!!!!!!  ::)

Most stupid argument I have ever heard.

 :D

Career politicians are not where they are due to their intelligence.

Did this motherfucker just say he's bullish?

It won't happen IMO. Our legislators are capable of thinking critically (for the most part?) and realizing what went wrong. And they know this is going to help Bitcoin evolve. It's not a flaw in Bitcoin itself. They aren't calling it the "Wild Wild West" of Bitcoin for nothing! Things will get better.

Personally I'm just more nervous that they try to stalk it to an extreme level like the internet with PRISM only applied to Bitcoin
Aka trace every address without evidence of wrongdoing just because they can then if someone is arrested use that database to implicate you as well as the defendant even if the coins plausibly were mixed before you receive them (Aka tainted coins)

Since it may be a new concept to a few gives a bit of an overview of what I mean link and explanation
http://www.bitkoins.com/discussion/5327/tainted-coins-how-colored-coins-could-be-used-against-bitcoins-anonymity/p1
http://bitcoin.stackexchange.com/questions/7966/what-are-tainted-coins-exactly

In simple terms don't mess with Fungibility

That's interesting I actually haven't seen that yet. I understand the concept. However, I don't think it will become that extreme. Now of course anything can happen so I'm not being an asshole saying that won't happen, but I think a more realistic view would be to assume that this could be a acceptable way to regulate cryptos? As awesome as Bitcoin is regarding anomimity, I think realistically for bitcoin to become regulated we are going to have to surrender some qualities. The way I see it, if it becomes regulated to the point where we have to disclose all personal info like the article said, Bitcoin is still extremely valuable and it's utility holds. Transaction rates, and it's universal quality will still make it a go 2 currency.     

nonetheless very interesting.

@Cityguy

The problem is that if a government says X amount of bitcoins can never be traded because they were used for money laundering/drugs so on and so forth then you end up with a spending problem as those units decrease the available supply of bitcoins on the market.

Bitcoin has a controlled supply of 21 million units so you can't just say X amount of units cannot be traded.
https://en.bitcoin.it/wiki/Controlled_supply

Otherwise you end up with a fungiblity issue which is the concept that every unit or subunit remains equivalent and identical to any other unit or subunit. It is the property of a good or commodity whose individual units are capable of mutual substitution.

If each bitcoin is worth a different amount as another bitcoin because some are considered tainted then it becomes much more complicated to determine the value of each bitcoin.

Government paper has fungibility provided that the bills have not been marked or serial numbers have not been ‘blacklisted.’ In other words, you cannot be held responsible for the historical path of that banknote prior to its acceptance by you.

So a system of regulation should be focused on exchanges where transactions occur, not on reducing the supply of bitcoins by confiscation.

Since the argument I presented is a short of the coindesk article I'll just recommend checking that one out as well :)

http://www.coindesk.com/bitcoin-fungibility-essential/

This Forbes article http://www.forbes.com/sites/andygreenberg/2014/02/26/senator-calls-for-bitcoin-ban-in-letter-to-financial-regulators/ (http://www.forbes.com/sites/andygreenberg/2014/02/26/senator-calls-for-bitcoin-ban-in-letter-to-financial-regulators/) contains the following update: This appears as typical political damage control after the senator spoke.

Easy question. He just has to order Bitcoin to cease operations, right?

http://news.bbcimg.co.uk/media/images/53009000/jpg/_53009665_canutewaves.jpg

I hereby ban You bitcoin
If only there were no decentralized exchanges and nodes everywhere around the world  ;)

Ahahah it is funny to see how ridicolous can a government be

I guess the idiot don't have anything better to do rather then banning  bitcoin, which is atleast helping people in many ways unlike him.

He lost a fortune in MTGOX and became furious  :D

Isn't this sort of thing what the Bitcoin Foundation is supposed to be for?

Mr. Manchin, as the senator from one of the poorest state in the country, don't you have better thing to do, other than emulating communist regimes around the world?
 

Interesting comments arising from the Coindesk version of the story: http://www.coindesk.com/us-senator-bitcoin-ban-letter-federal-regulators/

This sequence is revealing. Ignore the bitcointalk smiley artifact on #8 below, but notice #18. Small world:

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Avatar
My2Cents • 21 hours ago Featured by CoinDesk

JPMorgan contributed $30,550 to this goon's campaign. That says everything... he is just a puppet not even worth mentioning.

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    Bboy 360 My2Cents • 21 hours ago

    1) FirstEnergy Corp $139,450
    2) Mylan Inc $127,500
    3) Mepco LLC $64,400
    4) Dominion Resources $63,900
    5) American Electric Power $61,250
    6) Centene Corp $55,900
    7) Jackson Kelly Pllc $50,825
    8) Drummond Co $49,100
    9) Patriot Coal Corp $48,400
    10) Alpha Natural Resources $48,298
    11) Boich Companies $44,200
    12) CONSOL Energy $41,050
    13) Wexford Capital $40,000
    14) Arch Coal $35,900
    15) CSX Corp $35,700
    16) Peabody Energy $34,100
    17) Nelson Brothers LLC $32,000
    18) JPMorgan Chase & Co $30,550
    19) Chesapeake Energy $28,900
    20) Lewis, Glasser et al $27,600
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        Disqsuxs Bboy 360 • 19 hours ago

        remember Robin Williams said politicians should wear patches like NASCAR drivers

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Also contradictory to his own arguments:

"I hereby ban the internet." :D

I want a ban on idiotic Senators.

Is that possible? About as much as a ban on Bitcoin  :-*

He's too late...Sen Chuck Schumer already banned bitcoin back in 2011.  :P


...and here I thought the stupidity was just an act.

Contents of brain :
  https://i.imgur.com/LSCMvb5.jpg?1

mother of fool is always pregnant......

Retard people with strong problems always leads. This is why we are still in a sort of middle-age.

Hey senator! I have a great idea! You could run a voodoo, or better try to fire some witches! It's the last and ultimate way to get into 23rd century!

(oh my.....*ultramega facepalm*)

We must protect hardworking American's from losing wealth¹ by banning bitcoin and causing American's to lose wealth!  

¹Where losing wealth = gaining wealth in this occurrence of the words "losing wealth" only.