2013-05-18 ForeignPolicyJournal: Washington Signals Dollar Deep Concerns

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http://www.foreignpolicyjournal.com/2013/05/18/washington-signals-dollar-deep-concerns/

Washington is afraid of bitcoin....


"The threats to the dollar are alternative monies–currencies that are not being created in enormous quantities, gold and silver, and Bitcoins, a digital currency.

The Bitcoin threat was eliminated on May 17 when the Gestapo Department of Homeland Security seized Bitcoin’s accounts. The excuse was that Bitcoin had failed to register in keeping with the US Treasury’s anti-money laundering requirements.

Washington has stifled the threat from other currencies by convincing other large currencies to out-print the dollar. Japan has complied, and the European Central Bank, though somewhat constrained by Germany, has entered the printing mode in order to bail out the private banks endangered by the “sovereign debt crisis.”"

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[StarfishPrime]

The entire bitcoin market capitalization is approximately $1B - yet the DHS is seizing funds from a non-US based exchange for a possible non-compliance issue. This is indefensible over-reach, apparently to send a message: Why was non-compliance with (new) FinCEN guidelines suddenly a made a DHS issue? Remember, bitcoin wasn't even recognized as requiring compliance at the time the claimed "false statements" were made by MtGox.

... meanwhile HSBC launders USD 100's of billions - 100's of times more than the value of all bitcoins - for mexican drug cartels (obviously aware that these aren't just tortilla vendors) and is still doing business in the US like nothing ever happened: No fund seizures, no one is prosecuted and the bank is deemed "too big to prosecute" by the ever evasive Mr. Holder.

Unbelievable.

[cypherdoc]

The entire bitcoin market capitalization is approximately $1B - yet the DHS is seizing funds from a non-US based exchange for a possible non-compliance issue. This is indefensible over-reach, apparently to send a message: Why was non-compliance with (new) FinCEN guidelines suddenly a made a DHS issue? Remember, bitcoin wasn't even recognized as requiring compliance at the time the claimed "false statements" were made by MtGox.

... meanwhile HSBC launders USD 100's of billions - 100's of times more than the value of all bitcoins - for mexican drug cartels (obviously aware that these aren't just tortilla vendors) and is still doing business in the US like nothing ever happened: No fund seizures, no one is prosecuted and the bank is deemed "too big to prosecute" by the ever evasive Mr. Holder.

Unbelievable.

don't forget HSBC wasn't the only one.  there have been many, many more over many, many years.

[solex]

You just need to consider the FinCen and SEC guidance people like John Corzine and Angelo Mozilo have treated with as much disregard as a parking ticket with the wrong licence plate written on it.

[Dusty]

Unbelievable.

I't unbelievable only if you are one of those people still believing to tooth's fairies and other fairy tales like the one where a government is good for us.

[hathmill]

LoL, right on! I cant believe how super ignorant most people are. I guess people first get it when they noo longer have anything at all. When you mention financial repression or LIBOR or whatever, peoples eyes just glace over. Propaganda is not even needed, just give the crime a boring dry name and people simply stops thinking.

Unbelievable.

I't unbelievable only if you are one of those people still believing to tooth's fairies and other fairy tales like the one where a government is good for us.

[StarfishPrime]

Unbelievable.

I't unbelievable only if you are one of those people still believing to tooth's fairies and other fairy tales like the one where a government is good for us.

...not unbelievable as in "whaddaya mean there's no toothfairy mom?!" - but unbelievable as in where's the media coverage and public outrage when the government is clearly operating farther and farther out of bounds on an increasingly regular basis. In any democratic society a free press has an absolutely crucial role in constraining government. Is everybody asleep or just too distracted by TMZ etc to care? I think we're in trouble.

Bernanke is printing (counterfeiting?) at the rate of USD $1 trillion per year and nobody sees that the party is very close to being over?
 

[Dusty]

Bernanke is printing (counterfeiting?) at the rate of USD $1 trillion per year and nobody sees that the party is very close to being over?

Of course nobody does: economics is hard, and most of people does not get it (nor they try to).

They just delegate it to the "experts", like every important aspect of their lives.

[Bitcopia]

According to this article MtGox = Bitcoin. The author clearly knows very little about bitcoin.

And while I find it odd that DHS seized the account instead of FinCEN, the government did not over reach its self proclaimed boundaries. In 2011, FinCEN declared that any foreign money transmitter interacting with US customers must be in compliance with their regulations. MtGox is clearly a money transmitter interacting with US customers. I am not surprised that they took action, but I am surprised that it was carried out by DHS and that they only froze their Dwolla account and didn't suspend wire transfers.

[odolvlobo]

And while I find it odd that DHS seized the account instead of FinCEN

FinCen only makes guidelines. I has no enforcement capability.

[StarfishPrime]

And while I find it odd that DHS seized the account instead of FinCEN

FinCen only makes guidelines. I has no enforcement capability.

Good point, thanks for the clarification. Unless there's an actual threat to national security, however, it seems heavy-handed that DHS would be involved as opposed to the FBI or whichever agency typically executes federal seizure warrants.

Strangely, Mt.Gox has removed any reference to the seizure from the "News Feed" on their home page. There was a brief notice along the lines of "we're looking into it" there previously.
 

[jgarzik]

The Bitcoin threat was eliminated on May 17 when the Gestapo Department of Homeland Security seized Bitcoin’s abeeccounts. The excuse was that Bitcoin had failed to register in keeping with the US Treasury’s anti-money laundering requirements.

Yeah, it was a complete gestapo surprise.

Or not.  It's only been two years of pointing out that US bitcoin exchanges clearly fall within the bounds of FinCEN.

The USG is gonna regulate the USD, and it's within their rights to do so.

If you dislike this... don't use USD.