The last two US exchanges, Tradehill and Kraken, both of which boasted about their "professionalism", turned out to be flakes.

It's really pretty simple. To be a Bitcoin exchange or market maker in the US, you should be a SEC registered broker/dealer. There's a lot of "oh, Bitcoin is different and doesn't need to be regulated" talk on here. By now, it should be obvious why broker/dealers are regulated - otherwise, there's a huge temptation to take the money and run, which over half of Bitcoin exchanges have done. It's not clear that it's absolutely necessary under US law to be a broker/dealer to be a Bitcoin dealer. What is clear that if you are an SEC registered broker/dealer, there's no problem. There are even advantages over being registered with the SEC - no need for state-level money transfer registration.

The problem, of course, is that most of the people doing Bitcoin exchanges don't have the training or the money to start a brokerage firm. It's not just paperwork. There are exams, audits, financial requirements, insurance, background checks... That's what you have to do to handle other people's money.

Eventually, if Bitcoin stays around, somebody who is already a broker-dealer will start dealing in it. Then there will be a way to buy and sell Bitcoins without all these delays, excuses, and losses.

Incidentally, as for the Know Your Customer and Anti-Money Laundering requirements, with a real broker, you take care of that when you open an account.  You never get told you can't withdraw your money. If a legit US broker did that, they'd be in big trouble. Some sleazy brokers dealing in Pink Sheets stocks have tried that on occasion. Some of them now have Federal prisoner numbers.

Reasons this isn't happening:

• Way too much volatility.
• Not enough liquidity.
• No legit exchanges.
• Wire transfer fees don't go up with the amount.

Trying to unload 10,000 BTC would crash the market. But that's a reasonable size for a single B2B transaction.

Mt. Gox hasn't paid out US dollar withdrawals since June 2013. See this thread.

It's suckers like you who keep them in business.

It hit 20% last year. Now, though, Gox really does seem to be running out of money. First they stopped paying out USD last summer. Then they started stalling on EUR withdrawals. Now they're even stalling on JPY withdrawals.

There's an another option: get licensed as a broker/dealer with the SEC. Every broker in the US does that. Then you can deal in any tradeable security or commodity. There are exams, financial requirements, insurance, and audits. Each customer gets $500,000 in insurance against broker fraud and theft from the SIPC.  (They paid off Madoff's customers up to that limit, for example.) Brokers pay the premium for this.

The SEC also licenses exchanges. I once asked Tradehill if they had SEC licensing. They disappeared shortly thereafter.

There are big advantages to being a licensed broker/dealer. Banks will deal with you at the wholesale level. You can get connected to ACH and even SWIFT and do your own wire transfers.

Yes, there are crooked brokers, and FINRA is there to go after them. FINRA fines brokers several hundred million dollars a year on average.

It is Japanese law. See Section 2 of the Payment Services Act.

Yes, litigation works in these situations. Even threats of litigation sometimes work.

There's a whole system out there designed to deal with people who take the money and run. There are business called "skip tracers" who specialize in finding people who ran. Lawsuits where they just refuse to pay up are usually not very complex or expensive.

Notice the pattern. First USD withdrawals slowed down and stopped. Then EUR.  Now JPY.  Some days, BTC. This just screams "out of money" and "getting close to the collapse".

Make sure that the Japanese police have the fingerprints of the Mt. Gox management on file.

Right. Gotta recruit more suckers.

Remember, Bitcoin is zero-sum. For ever winner, there must be a loser. The supply of losers must be constantly replenished with more suckers.

Re: "...it is bringing money laundering from big people to the common people.."

He's right. That's what powered the whole China-based run-up. Bitcoin provided an easy way for little people to bypass China's exchange controls and turn yuan into dollars or euros. Big players could already use export businesses and offices outside of China to do it, or move currency through Hong Kong or Singapore, but the little guy was stuck in yuan.

Then the People's Bank of China cracked down on Bitcoin, and that doesn't work any more.

For a brief time, Bitcon was a legal way for people in China to get money out of yuan and into dollars or euros. China has rather severe restrictions on moving capital out of yuan. That made Bitcoin very useful in China. This drove a big run-up in Bitcoin prices.

That's over. There's a lot of denial about this on the forums, but the People's Bank of China has made their decision and is enforcing it. There's a lot of talk on the forums about "no one can stop Bitcoin" and such. They're missing the point. Bitcoin was, briefly, a safe, easy, and legal way to move capital out of China.  The PBC has taken away "safe, legal, and easy". It's not totally impossible for someone in China to buy Bitcoins and sell them outside China for dollars. But there's now a chance of getting caught. So the advantage of Bitcoin over other illegal and semi-legal approaches (taking cash to Singapore or Hong Kong, for example) has been lost.

Bitcoin really ought to slide down to back where it was pre-China, but may not go down that far.

It's worth remembering that Bitcoin is zero-sum. Profits made by any seller of Bitcoin are losses for someone else. A continuing supply of losers is necessary to keep this thing going. So far, recruitment of marks has been successful, but it's hard to keep that going indefinitely.

There are still people who pay for porn?

Anyone who read that as "China has no plans to ban Bitcoin" is engaging in wishful thinking. Read the actual text from the press conference.

Google automatic translation:

Q: Japanese public television:

There is a question about bitcoin, as China's central bank on Bitcoin development in China how to treat? Do you think bitcoin will bring what risks? The Chinese government should prohibit the use of bitcoins it?

A: Shengsong Cheng:

About Bitcoin problems, the People's Bank and other five ministries jointly issued a notice, I would like to emphasize, first, we propose, is not the true meaning of bitcoin currency. Second, we prompt the Bitcoin risk and made the request.

Bitcoin is a specific virtual goods. What I understand is called money? The first is the medium of exchange currency is widely accepted by society as a whole medium for the exchange of commodities. Monetary developments in the history of thousands of years, once the physical currency, the final form of physical currency is gold and silver. Like Marx said natural gold is money. The most essential characteristic of money is a medium of exchange and measure of value. Itself to be valuable, so it can be denominated. Since gold production is limited, it can not meet the growing social and economic development, so the gold standard collapsed. From the later seventies of last century, the world monetary credit system completely behind monetary credit system is a powerful force of national credit and forced the country, so we put the national currency, credit currency called legal tender.

We take a look at Bitcoin, Bitcoin is not having the characteristics of these currencies? As far as I know, the vast majority of countries do not recognize the Bitcoin currency status. Currency in circulation in addition to the media, the value of scale functions, there is a very important function is denominated instruments. Bitcoin itself is not denominated in the currency, nor as the quote currency is possible. Plunged wild speculation "currency" can be used as currency it? Bitcoin transactions for good, good investment, you need to pay attention to its risk. People's Bank and the relevant departments will continue to focus on the movements of Bitcoin and associated risks, strengthen the monitoring, analysis, and guide the public to establish a correct concept of money and investment philosophy. Thank you.

Key points here are 1) he refers back to the PBC notice on Bitcoin policy. That's the official position - banks, money transfer services, etc. can't be involved with Bitcoin. He's not indicating any change from that. And 2), the PBC is watching, monitoring, and will "guide the public to establish a correct concept of money and investment philosophy". China has serious capital controls. "Guidance" means telling (not asking) people to do or not do something. If further restrictions are needed, the PBC is ready to make them.

Right. It's up to ghash.io, which controls most mining power, to decide whether that gets to be raised. They may decide to raise fees instead.

Anything involving a "preorder" probably isn't worth it. You'll end up getting the hardware just as it becomes unprofitable to operate.

No, the three unavoidable problems for Bitcoin are:

• Anonymous, remote, irrevocable transactions are the scammer's dream. This makes Bitcoin a scam magnet.
• The confirmation process is too slow for real-world commerce.
• The volatility is so high that nothing real can be priced in Bitcoins.

The South China Morning Post is independent and well respected.  It's not the "party line". Xinhua and People's Daily are the official party line. SCMP criticizes the government of China frequently. They'll mention Falun Gong favorably, and often criticize the "princelings" (sons of older party officials") who are expected to become leaders in China. They're not as independent as they used to be when Rupert Murdoch owned them, though. On business news, they're usually accurate. 

The Hong Kong Economic Journal also considers Bitcoin to be a bubble, one of many in China.  The Pacific Standard says Bitcoin didn't crash after the China crackdown and may survive. They point out that customers spent over $100 million last year on Zynga in-game purchases.

You should be reading all of these to find out what's happening with Bitcoin in China.

There are still fees for using Bitcoin. Coinbase has about an 0.5% spread, and a 1% fee.  So it costs Overstock about 1.5% to accept Bitcoin.

Because you can't get dollars out of Mt. Gox. They've been in default for over six months. See this thread.

There are only 521 unconfirmed transactions right now. Today is a slow day. What's the problem?

When that number gets up into the thousands, the block chain is backing up.  Bitcoin is limited to about 7 transactions per second, and during busy periods, confirmations will back up.