Obviously, the prohibition wouldn't be generally enforceable. As you point out, it could be easily circumvented.

The point of the law, though, is about deterrence. Government officials probably understand fully well the law isn't wholesale enforceable. There will probably be some "low hanging fruit" cases where users openly violate the law -- transacting with undercover police, for example. They could publicly prosecute these cases, hand down harsh prison sentences -- and this would scare the hell out of people. It obviously won't kill Bitcoin in India but the black market will be a tiny shell of the former white/grey market.

Like the Chinese government, they may just want to force VASPs offshore and cut the market down in size.

I don't think it's about licensing at all. Robinhood already has a BitLicense and several money transmitter licenses where they operate. They are very well capitalized too. At a $7.6 billion valuation, licensing costs aren't an issue. It's fear about exposure to money laundering risks. They want to insulate their shareholders from regulator scrutiny, and they're betting their target demographic cares more about investment exposure than control of private keys. It sounds like they may never allow cryptocurrency withdrawals:

The sanctions didn't start yesterday, but the Treasury Department has been slowly ramping up its pressure on exchanges ever since 2017. A formal endorsement of mining by Iran suggests there will be increased Iranian capital flow into mining. Between that and the fact that Iranian officials have repeatedly said cryptocurrencies can be used to thwart sanctions, it makes sense that US officials are watching closely. The fact is that P2P markets, DEXs, and non-KYC exchanges could theoretically allow circumvention of sanctions.

Why wouldn't there be? You think governments will start explicitly prohibiting privacy coins?

Heavily regulating exchanges is one thing. Prohibiting anonymous currency is another. If they haven't made cash illegal, then there isn't much legal rationale to prohibit privacy coins.

Japan is applying soft pressure, requiring that exchanges de-list privacy coins before obtaining licenses. I think we'll see more of that behavior. But that won't stop people from using Monero globally, both inside and outside of jurisdictions that are exerting pressure on exchanges.

You should include a link next time: Iran Legalizes Crypto Mining

I imagine the US government will take this as cause to further clamp down on exchanges and other Bitcoin services. They'll push for stricter regulations and enforcement under the guise of concerns over sanctions. This is what a US official said a few days ago:

Hyping up the testing phase seemed like a marketing gimmick. Maybe the market will react to the actual launch, or maybe it won't react at all. The Bitcoin markets seems to defy all logic sometimes.

My understanding is they don't need CFTC approval since they are self-certifying through the ICE. What I'm not sure about is whether there is a delay in receiving NYDFS trust status. That's central to their custody arrangement.

Well it's definitely unlikely, but I'm not sure I agree with Krueger's rationale. He says the President would need to "convince Congress of the need to ban Bitcoin" which isn't really true.

Trump could ban Bitcoin via executive order. Congress could only attempt to stop him by passing a new law to invalidate it. Trump could then veto the new law. Congress could only override that presidential veto with a two-thirds supermajority vote:


So Trump doesn't need to convince Congress. Rather, Congress needs to have overwhelming consensus to stop him, which is a much bigger feat.

Why blockchain, and not Bitcoin? You're suggesting that irreversibility based on distributed consensus is important -- what blockchain is superior to Bitcoin in that sense?

It seems to me that the strongest -- and I'm tempted to say only -- proven use case for blockchains is as money. All the hype about blockchains revolutionizing supply chains and finance and the dentistry industry is just hot air and vaporware so far.

Indeed, geopolitical competition really plays into Bitcoin's favor. Most governments (including the US) seem aware by now that driving cryptocurrency underground can only hurt their countries economically, and probably won't be effective anyway.

Still, they will try to control it the best way they know how -- by strangling VASPs with just enough regulation to see a handful of willfully compliant heavyweights emerge and consolidate the market. Or worse, they'll target users and their bitcoins as theymos pointed out, although I think his specific scenario is unlikely.

It's not about data encryption, but rather the ownership of a certain kind of property. I think it's unlikely but as pointed out earlier, the US government could outlaw private bitcoin ownership just like they did with gold for 40 years. Gold confiscation by the government was never found to be a constitutional issue.

I'm guessing it'll be something in between their Jersey offering -- only a handful of coins -- and their main site. I would be prepared for full KYC (documents and selfie) and access to at least several dozen less coins. Anything that Poloniex and Bittrex de-listed for US traders is obviously on the chopping block, but quite possibly others as well.

I'm hearing that Kucoin is the best US-friendly alternative. I haven't tried it yet, but once I'm forced to leave Binance I probably will. We can always take the VPN route as well, but I would only risk small amounts when violating site terms like that.

High fees on the Bitcoin network means what, 100 satoshis/byte? That must pale in comparison to bank wire fees. Last time I received a wire, it was $75 short due to fees from both my bank and an intermediary bank.

I agree with the OP -- life would be a lot easier if everyone just accepted Bitcoin. No waiting on incompetent third parties or banking hours...

Where are you viewing this? Could you provide a link?

It doesn't seem too serious yet. As was pointed out in the article, often times nothing materializes from such CFTC probes. Either way, I wouldn't worry too much yet since the DOJ doesn't appear to be involved in the case. For now, it's just a civil matter.


That may be exactly what this is about -- pressuring BitMEX into implementing KYC. The CFTC seems to be suggesting that geo-blocking prohibited regions isn't enough.

All holdings? Meaning no on-demand withdrawals? I suppose that's how BitMEX operates. Maybe this is the direction exchanges should head in. I'd feel safer trading on an exchange with 100% cold storage and would be fine with delayed withdrawals if that were the reason.

By all indications, he doesn't like any cryptocurrency.


It almost touched $20K and they haven't done anything for almost two years. Whatever regulations they're cooking up won't be good for us, but I don't think prohibition is on the table. Everything is pointing to heavy regulation of cryptocurrency service providers -- exchanges, brokers, hosted wallets, payment processors, etc.

This is financial bias at work. People are hyping up their holdings -- partly to convince others to buy, and partly to convince themselves to keep holding through huge losses.


Cryptocurrency is novel in the respect that users are inherently investors. I don't think there's an easy solution to this problem. You can see similar behavior in the Yahoo Finance boards with people shilling the penny stocks they own.

Congressman McHenry made the comment that "there's no capacity to kill Bitcoin" on CNBC. See here.

Congressman McCarthy also praised Bitcoin while criticizing Libra in a CNBC interview.

The hearing was about Libra. I don't recall much about Bitcoin but you can watch it here.

It's possible if the attacker is -- or has close connections to -- a top ASIC manufacturer, and colludes with large existing miners. But this all gets back to the problem of incentives. Even if an attacker has the means, it would still cost billions of dollars to mount this attack. For what gains? Once it's known that a 51% attack is occurring, users simply need to stop transacting. The attackers will just keep bleeding money until they give up.

I guess that's what they're doing with these new FATF rules. The exchanges are complaining loudly about the cost and difficulty of data sharing among themselves so they can identify customers and aggregate their transactions for reporting. It seems like a massive endeavor for VASPs.

I'm curious how many will ignore the laws when they come into effect. Given that the US government is the only one enforcing anything, some may opt to simply IP-block Americans. Maybe between that and limiting unverified withdrawals to $1,000/€1,000 a day, they can hope to squeak by without future enforcement actions.

I'm also curious to see if anything comes of this CFTC probe into BitMEX. We all know that VPN usage is a common way around geo-blocking. It'll be interesting to see if the CFTC interprets BitMEX's lack of verification as violating its registration requirements, because ostensibly it allows US residents to trade there.


Indeed. Thanks a bundle, Facebook!

The BitMEX probe is for offering services to US persons without being registered. It's already illegal to offer their derivatives markets to Americans. So, these seems like two very separate issues: US regulators enforcing laws that are already on the books, and lobbying to prevent further draconian laws.

I'm with you. Unfortunately, the US and EU both seem to be pushing the AML/CFT agenda extremely hard and Bitcoin is obviously in their crosshairs now. Meanwhile, there really isn't much of an organized lobby. I know Coinbase has a registered lobbyist and a PAC, and there's Coin Center. But I don't think either of them are particularly interested in issues about leverage and derivatives.

I'm not underestimating US regulators at all. I find the whole thing depressing, really.