Liberty Reserve is now dead (Good News For Bitcoin ?)

[franky1]

OMG no this is bad news for alternate e-currencies in general, I would say.

I was implementing the LR API for my future BTC business, now I think I wasted my time... Is OKPAY next? Is this why BTC exchanges have problem with OKPAY now (thinking BTC-e)?

No, this is definitely not good news, even if BTC is unaffected, they are going to put the pressure on exchanges and money intermediaries now.

maybe pressure needs to be put onto them.. after all

before now, bitcoin started up as zit faced inexperienced 'teentrepeuners' thinking the law didnt apply to them and they were kings of the world. atleast now we should start seeing experienced and well invested people doing a proper job, instead of trusting millions of dollars/coins in some 17yo kid that cries "i been hacked" purely to run off with the cash.

having people who invest their own money to get licences, are much more likely to stick with the project and secure it. and make sure it succeeds to get profit out of their investment.

we do NOT need any more teenagers buying a domain name for $10 and saying they can be trusted with millions of other peoples money.

you tell me honestly who would you trust more to look after your funds when you deposit in the morning and before you withdraw at night.... a well invested businessman with a team of employee's or some kid that just bought a domain name and done a bit of glossy looking coding

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[Melbustus]

As someone else said, this is bad for businesses exchanging fiat for something else while operating without valid federal and state Money Transmitting licenses. The Dwolla/Gox action was the same thing.

The FinCEN guidelines basically told everyone that the period of doing this stuff without full regulatory compliance is over. It specifically noted the licenses that needed to be obtained and what sorts of businesses needed them, and now the gov is, *very predictably*, cracking down on those who ignored this reasonably explicit guidance.

Whatever you think of regulation (I think it's mostly ridiculous, personally), it's naive and stupid to ignore it if you fall under the definition of a money services/transmitting business.

So this is bad for the adolescent businesses operators who don't take this stuff seriously. There's no assault specifically on bitcoin. ... Yet.

[cheesylard]

First they came for the communists,
and I didn't speak out move to a safer country because I wasn't a communist...

Just say you don't hold any bitcoins. It's not like they can be seized or anything.

[Melbustus]

It's good for Bitcoin's image as that shows why one should choose Bitcoin for its decentralized feature.

Though I'm wondering what would happen to Bitcoin when the time comes when China privately manufactures fucktons of ASICs to do a 51% attack on the network to destabilize Bitcoin.

Next day they will need to manufacture another set of fucktons of ASICs to continue 51% attack with another hashing algo.

Yeah, hard fork is a solution and bitcoin would survive, but a lot of honest ASIC operators would lose a lot of investment. It'd be an ugly blow to the ecosystem. We need orders of magnitude more hashing power on the network as soon as possible.

[matt4054]

...but a lot of honest ASIC operators would lose a lot of investment.

Smart ASIC owners keep their GPU farm around the corner (actually my GPUs are still mining BTC), instead of reselling them. They might have a longer life cycle than expected, especially if scrypt and/or new hashing algorithms are used for successful altcoins and/or Bitcoin replacement, in your worst case scenario of a strong, evil entity taking over BTC.

That said, yes, they would lose their investment. Bitcoin is still VC, anything involving them is risky at this stage.

[movellan]

OMG no this is bad news for alternate e-currencies in general, I would say.

I was implementing the LR API for my future BTC business, now I think I wasted my time... Is OKPAY next? Is this why BTC exchanges have problem with OKPAY now (thinking BTC-e)?

No, this is definitely not good news, even if BTC is unaffected, they are going to put the pressure on exchanges and money intermediaries now.

Noticed this morning that the LR button is missing from the OKPay 'Add Funds' page. BTC is back after being unavailable for near a month but the max fee is up to 6%. Think I'll wait till BTC goes up further before funding OKPay again.


PS:  More bad news.  As of this morning, 5-28, BTC deposits are gone again from the OKPay 'Add Funds' page.

[Its About Sharing]

OMG no this is bad news for alternate e-currencies in general, I would say.

I was implementing the LR API for my future BTC business, now I think I wasted my time... Is OKPAY next? Is this why BTC exchanges have problem with OKPAY now (thinking BTC-e)?

No, this is definitely not good news, even if BTC is unaffected, they are going to put the pressure on exchanges and money intermediaries now.

I see the Liberty Reserve closer as a good omen for BTC. It brings us that much closer to a decentralized exchange.

Remember, it took taking Napster down in order for Bit-torrent to surface. As these central points of failure are removed, decentralized (like) replacements will have to come. (Unless of course
we take the regulatory route, but I just don't see us doing that 100%. It is better for us to apply pressure on the regulators and for them to meet us half way than us meeting their demands.)

[countryfree]

The BBC writes about it:

http://www.bbc.co.uk/news/technology-22680297

But we still don't know what's going on, and that's bad. The less we know, the more people will be scared of alt currencies and online banking.

[Brushan]

Liberty Reserve is nothing like Bitcoin. Bitcoin can't be stopped by governments and as long as exchanges pay for the proper licenses and behave according to them, then they won't raid those either. Everybody knew what LR was used for but they thought they couldn't be stopped because of being in Costa Rica. This shouldn't scare any bitcoiners.

[matt4054]

Everybody knew what LR was used for but they thought they couldn't be stopped because of being in Costa Rica. This shouldn't scare any bitcoiners.

I have used LR for legitimate purpose. However, I never felt like my money was safe over there. So I lost about 0.65$ in the process, I can deal with that loss... Still, I think it sucks because LR was a good option to move money between exchanges for instance.

[TheKoziTwo]

Well, in a sense it's good for bitcoin, because people will start realizing that what happened to e-gold and liberty reserve can, and most likely will, happen to PM, EP, STP and so on, whatever payment processor takes the throne after LR will become a target of the US government.

This could make more people interested in and accepting bitcoin for their business, but there is a bootstrap problem here, in those industries where LR was king: hyip, autosurf & other grey areas. It would probably require some of the biggest actors to start using it and promoting bitcoin for it to really win this market. It needs a majority using bitcoin. In order to accomplish that it must be integrated with the infrastructure so that it's easy to setup etc, but for now I think the volatility may prevent it from happen. If I where to guess, these people will jump on to the second best e-currency after LR, which may be PM or STP now.

[FoBoT]

this is how the government/establishment is going to come after ALL of US
we are all money launderers and criminals for using/mining bitcoin and other crypto currency

there used to be laws against just using high levels of encryption, they'll bring all that back also
Export Administration Act (EAA) and the Arms Export Control Act (AECA) will be sending us letters to cease and desist, just like they did to the 3D printable gun guys, defcad.org/liberator
 

[EndTheFed321]

Indeed we are DOOMED!!

[mgio]

It is very bad for bitcoin.

It shows that the US government is cracking down on anonymous virtual currencies that can be used for money laundering.

It is harder for them to shut down bitcoin but not impossible.

Let's say they shut down all the exchanges that exchanged dollars for bitcoin? Or at least froze the accounts of them. What do you think would happen to bitcoins price? And then it's utility?

It would be a big step back for bitcoin, and I fear that it is coming. soon.

[jdbtracker]

it's good news,

We are in the clear, they are regulating us for security, They caught and arrested the guy that made LR.
They have not done the same thing to the guys running MtGox... That is my assesment.
They want compliance, besides they can't stop bitcoin, one person with a copy of the BlockChain can rebuild the whole thing again, the laws are territorial so if it is blacked out in one place it can only be done in one sector of a global community.

A previous poster had some really good ideas on how to spread into the space that LR was inhabiting quickly. providing produce, shipping centers, etc.

Paypal does not cater to 60 countries!? Bonus! Bitcoin can go there.

But it is going to be bad news for us for a little while, most people will just say, hah! Bitcoins next, not realizing how resilient the system is, you'd have to knock out the power grid to take it down.
  We are unfortunately limited, we can only propagate our knowledge to people who bring up the argument about LR and only to our close circle, limited for large sectors of society.

To spread we have to find a sector of society to work on that current businesses that accept Bitcoin can help.. I don't think offering them food with foodler or electronics from the Bitcoin store are useful, we need manufacturers on board, shipping services, farmers, something and only the people with a lot of Bitcoins can help with that... or if the community began funding startups to begin constructing these alternate businesses then we can accelerate this.

WE need to bypass the gatekeepers to our success.

[matt4054]

There is still a looooong way to go, but +1 to above post

[mgio]

It's bad. Bitcoin needs to go mainstream to really be successful. Cracking down on virtual currencies does not help them go mainstream.

The dwolla, okpay, liberty reserve news in the past couple weeks is more than a coincidence. It is a sign the US govt is attacking bitcoin anyway it can.

[bit777]

I believe someone needs to build a decentralized exchange for bitcoins before it is too late, as if DOJ shuts down MT. Gox this will be the end of current btc price and almost end of btc. There is no other reliable way to exchange your coins for cash in large amounts.

[escrow.ms]

It is very bad for bitcoin.

It shows that the US government is cracking down on anonymous virtual currencies that can be used for money laundering.

It is harder for them to shut down bitcoin but not impossible.

Let's say they shut down all the exchanges that exchanged dollars for bitcoin? Or at least froze the accounts of them. What do you think would happen to bitcoins price? And then it's utility?

It would be a big step back for bitcoin, and I fear that it is coming. soon.

+1

Well everyone knows bitcoin is getting used on deepweb for illegal things and if one day US govt decide to block bitcoin from america, they can do it easily. Although they won't be able to STOP bitcoin but they can bring bitcoin prices on it's knees anytime.

[superduh]

the articles floating around mainstream sites paint LR as an evil money laundering operation. though i've never used LR or any egold like services it's pretty harsh statements.