The death of Mt Gox will End Bitcoin

[darkmule]

MtGox dying a slow, painful death at the hands of U.S. and Japanese regulators would be the best possible thing that could happen to Bitcoin at this point in time.

If Gox is unfit to compete, I'd agree, except I'd think a quick and decisive death would be better so we can get to the moving on part.  If it can restructure to comply and remain in business, that would be better.

[1714981245]

1714981245

[deadweasel]

MtGox dying a slow, painful death at the hands of U.S. and Japanese regulators would be the best possible thing that could happen to Bitcoin at this point in time.

+1

Unprofessional BTC businesses will evolve or die.  It's beautiful.

[Pzi4nk]

Evidence is strong that the Department of Homeland Security SEIZED ASSETS through Dwolla.  I TOTALLY disagree with your assessment.  My initial assessment is that the founder of Mt Gox goes to jail for about a decade.  Didn't the Napster guy go to jail for a while?  I forget that was like twenty years ago.  These kids don't even know what Napster is Grandpa 

Goes to jail for an oversight on a subsidiary's bank account regarding regulations that are a month old?

Get a grip man.

+1

Voice of reason, man.

[Viceroy]

I wish the government were reasonable.

[bitcoincraps]

New small exchanges like bitcoin-exchange.info are started every week. I don't think mtgox has such a big influence over the price of bitcoin. If mtgox goes down, a crash will follow, that's for sure. But a crash will make bitcoin STRONGER not weaker.

I think the best thing that happened in the past was the 2011 big crash followed by the recovery. It proved that bitcoin is here for the long term.

[Terpie]

New small exchanges like bitcoin-exchange.info are started every week. I don't think mtgox has such a big influence over the price of bitcoin. If mtgox goes down, a crash will follow, that's for sure. But a crash will make bitcoin STRONGER not weaker.

I think the best thing that happened in the past was the 2011 big crash followed by the recovery. It proved that bitcoin is here for the long term.

It's good that bitcoin has one exchange large enough to weather these storms. Any smaller exchanges just close shop when things get tough.

[Chainsaw]

For awhile, I think the fear was this news event would cause the sudden, violent end of MtGox.  All the known data now seems to contradict this. As time passes, this news looks more and more like getting the news - MtGox, you've got terminal cancer. It's time to start making your final plans. In the medium and long term, this will be good for Bitcoin.

I blather on about this in more detail over here:
https://bitcointalk.org/index.php?topic=181037.20

It was a good kick in the butt for me. I've been complacent for far too long, rationalizing "the security is adequate, I'll wait til a clear winner comes along".  I never want to be caught unprepared and as risk-exposed again.

Long-term, I see this as compelling many more users like me to start seeking out alternative exchanges.  I read the government's posturing to date as a clear signal - they said they'll regulate, and they will.  Finding an exchange willing to play by the rules is paramount to greater security.  I could see Gox retaining some market share - say 10-25% of the exchange, while other exchanges pop up. This is all healthy and good for Bitcoin.

[BitcoinAshley]

And meanwhile, I am partially positioning myself into Ripple as well (now don't laugh - it IS legitimate, and it is a BUSINESS, contrary to the fukcing-up by Mt.Gox)

LOL

Big difference there, buddy -
Mt. Gox isn't completely in control of Bitcoin.

OpenCoin, though, is control of Ripple. It's not open source OR decentralized, "yet" they say (lol)

I say: I'll believe it when I see it.

Asking me to believe that OpenCoin will turn Ripple into a truly decentralized, P2P platform with no central authority keeping a closed source protocol or holding 50% of the coins - well, that's like asking me to trust a screenshot of an offline, not-yet-broadcast tx from a random stranger on the internets.

[marcus_of_augustus]

Anti-fragile ...

... this will actually serve to make bitcoin more quickly stronger as the hostile elements in its environment reveal their tactics. It is learning right now, dissecting the legal rulings, watching the reactions, listening to talking-heads who wield influence, looking for weakness in their arguments, openings to exploit, ways to route around. This is how technology networks grow, it is somewhat incidental that it deals with value transfer and storage, but adds some serious oomph and incentivisation to innovate rapidly.

Innovate. Evaluate. Iterate.

The more they engage with it and show their hand, the faster Bitcoin can learn ... they are damned if they do and damned if they don't now.

[farlack]

Goes to jail for an oversight on a subsidiary's bank account regarding regulations that are a month old?

Get a grip man.

Dude, you don't get the significance of this AT ALL.  This is NOT a meaningless situation regarding FINCEN's statement.  This is a criminal investigation involving, as the article puts it:  "Karpeles, in other words, is in violation of some fairly serious banking laws."

What Mt Gox has done is blatantly illegal and violates American laws back to the 1930's 1960's.

... gox isn't located in America. Why would they care?

[myrkul]

... gox isn't located in America. Why would they care?

They do business with Americans. Plus, World police.

[viboracecata]

Sure we will find another way to keep the trades.

[bitsalame]

So they got a couple of the questions wrong on one of the thousand documents they had to fill out for compliance with the US government.  Big deal.  Anybody else would have to just resubmit the forms at worst and nothing would come of it.  Anyway, maybe ripple or some other decentralized, peer-to-peer based exchange can solve this problem.

Actually, technically Mark might have filled it out correctly.

If under US regulations Bitcoins are treated as commodities, it is not a money transmitting activity. It is simply a purchase of a digital good, just like buying mp3s.
So that's the first problem based on definition of what Bitcoins are.
So if they go ahead with this, it is an implicit acknowledgement that Bitcoins ARE money.

Even if that's so, Mutum Sigillum LLC in the US is a separate entity from MtGox in Japan.
Even if it is owned by the same person, the money transmitting is never happening. It is just a deposit of funds on a US company, period.
The exchange and transmitting is happening only in Japan.

The DHS should eat it.

[myrkul]

No, you see, here's how it works:
I send dollars to Dwolla, via my bank account.
They send dollars to Mutum Sigillum.
Mutum Sigillum sends those dollars to MtGox.
MtGox deposits those dollars in my account.

I've bolded where Mark fucked up. Mutum Sigillum sends dollars overseas per the request of it's customers (MtGox, and myself). Hey, guess what? That makes them a money transmitter.

[dandirk]

So they got a couple of the questions wrong on one of the thousand documents they had to fill out for compliance with the US government.  Big deal.  Anybody else would have to just resubmit the forms at worst and nothing would come of it.  Anyway, maybe ripple or some other decentralized, peer-to-peer based exchange can solve this problem.

Actually, technically Mark might have filled it out correctly.

If under US regulations Bitcoins are treated as commodities, it is not a money transmitting activity. It is simply a purchase of a digital good, just like buying mp3s.
So that's the first problem based on definition of what Bitcoins are.
So if they go ahead with this, it is an implicit acknowledgement that Bitcoins ARE money.

Even if that's so, Mutum Sigillum LLC in the US is a separate entity from MtGox in Japan.
Even if it is owned by the same person, the money transmitting is never happening. It is just a deposit of funds on a US company, period.
The exchange and transmitting is happening only in Japan.

The DHS should eat it.

As was states... This has almost nothing to do with BTC, so whether it is considered currency or commodity doesn't really matter.

The account was used purely to transmit customer funds from one account (dwolla) to another (MtGox) and vice versa.  The account was probably setup specifically to handle dwolla transfers and had to be stateside... thus the US regulation.

I would guess he set up the account quickly while they were smaller, either not knowing what he was doing or thinking the account would be too small to get attention.... Then he/gox just plum forgot.  Either that or they are idiots like everyone says... which wouldn't surprise me.

[bitsalame]

So they got a couple of the questions wrong on one of the thousand documents they had to fill out for compliance with the US government.  Big deal.  Anybody else would have to just resubmit the forms at worst and nothing would come of it.  Anyway, maybe ripple or some other decentralized, peer-to-peer based exchange can solve this problem.

Actually, technically Mark might have filled it out correctly.

If under US regulations Bitcoins are treated as commodities, it is not a money transmitting activity. It is simply a purchase of a digital good, just like buying mp3s.
So that's the first problem based on definition of what Bitcoins are.
So if they go ahead with this, it is an implicit acknowledgement that Bitcoins ARE money.

Even if that's so, Mutum Sigillum LLC in the US is a separate entity from MtGox in Japan.
Even if it is owned by the same person, the money transmitting is never happening. It is just a deposit of funds on a US company, period.
The exchange and transmitting is happening only in Japan.

The DHS should eat it.

As was states... This has almost nothing to do with BTC, so whether it is considered currency or commodity doesn't really matter.

The account was used purely to transmit customer funds from one account (dwolla) to another (MtGox) and vice versa.  The account was probably setup specifically to handle dwolla transfers and had to be stateside... thus the US regulation.

I would guess he set up the account quickly while they were smaller, either not knowing what he was doing or thinking the account would be too small to get attention.... Then he/gox just plum forgot.  Either that or they are idiots like everyone says... which wouldn't surprise me.

No, they don't send the money to MtGox, because Mutum Sigillum IS MtGox.
From Mutum Sigillum's account they didn't have to transfer it anywhere but to their bank account in Wells Fargo.
And it has everything to do with BTC, you fail to understand what's going on between the lines.

No, you see, here's how it works:
I send dollars to Dwolla, via my bank account.
They send dollars to Mutum Sigillum.
Mutum Sigillum sends those dollars to MtGox.
MtGox deposits those dollars in my account.

I've bolded where Mark fucked up. Mutum Sigillum sends dollars overseas per the request of it's customers (MtGox, and myself). Hey, guess what? That makes them a money transmitter.

That bolded step simply doesn't exist.
It is actually like this:
I send dollars to Dwolla, via my bank account.
They send dollars to Mutum Sigillum's Dwolla account.
MtGox uses Dwolla's API to automatically check the deposit and then it shows credited in your MtGox account.

You withdraw money from MtGox through Dwolla.
MtGox uses the API again to program a withdrawal from Mutum Sigillum to your Dwolla account.

There is no such thing as "sending money from mutum sigillum to mtgox", mutum sigillum IS mtgox.
All the actual fiat money ends up in Mutum Sigillum only and never leaves the US.

[myrkul]

No, they don't send the money to MtGox, because Mutum Sigillum IS MtGox.

Technically, no.
MtGox is Tibanne Ltd.
Mutum Sigillum is a US-based subsidiary.

[bitsalame]

No, they don't send the money to MtGox, because Mutum Sigillum IS MtGox.

Technically, no.
MtGox is Tibanne Ltd.
Mutum Sigillum is a US-based subsidiary.

Exactly, but you missed my point.
I was trying to explain what is going on in practice.
Mutum Sigillum was solely incorporated to have a legal presence in the US to process MtGox's Dwolla processing, and it fully belongs to Mark. And because it is a separate entity ON PAPER (as you pointed it out) it doesn't really fit DHS' accusations, and technically Mark didn't fill out the forms incorrectly.

Mutum Sigillum is not transmitting money, it is collecting payments only.
The money transmitter and exchange is Tibanne, and it is in Japan.

[Razick]

I would expect a large price crash, but the death of Bitcoin? No.

[myrkul]

Mutum Sigillum is not transmitting money, it is collecting payments only.

Nope, when it sends the money to Tibane LTD's Wells Fargo account, they are transmitting money. It doesn't matter if it's all Mark. The paper is all that matters.