Liberty Reserve shutdown is a boost for Bitcoin?

[bitcoinbear]

If you have not heard the news yet, Liberty Reserve has been shut down http://www.bbc.co.uk/news/technology-22680297

This is bullish news for Bitcoins. Not only is there now one less competitor to bitcoins, but this shows one more time why a decentralized payment network is much more resilient than a centralized one. This also shows how aggressive governments can be, so it is even more important to have your money in a place you control, one which will not get shut down by police.

Is this as big as the Cyprus thing? No, because it affects fewer people, but it is just one more thing in a long line of acts which the government is doing which will ultimately push people into using Bitcoins.

[1715186945]

1715186945

[escrow.ms]

If you have not heard the news yet, Liberty Reserve has been shut down http://www.bbc.co.uk/news/technology-22680297

This is bullish news for Bitcoins. Not only is there now one less competitor to bitcoins, but this shows one more time why a decentralized payment network is much more resilient than a centralized one. This also shows how aggressive governments can be, so it is even more important to have your money in a place you control, one which will not get shut down by police.

Is this as big as the Cyprus thing? No, because it affects fewer people, but it is just one more thing in a long line of acts which the government is doing which will ultimately push people into using Bitcoins.

Not fewer people dude, too many. Total 6 billion dollars got seized and yes people will move to bitcoin for sure.

http://www.justice.gov/usao/nys/pressreleases/May13/LibertyReserveetalDocuments.php

[NewLiberty]

If you have not heard the news yet, Liberty Reserve has been shut down http://www.bbc.co.uk/news/technology-22680297

This is bullish news for Bitcoins. Not only is there now one less competitor to bitcoins, but this shows one more time why a decentralized payment network is much more resilient than a centralized one. This also shows how aggressive governments can be, so it is even more important to have your money in a place you control, one which will not get shut down by police.

Is this as big as the Cyprus thing? No, because it affects fewer people, but it is just one more thing in a long line of acts which the government is doing which will ultimately push people into using Bitcoins.

Not fewer people dude, too many. Total 6 billion dollars got seized and yes people will move to bitcoin for sure.

http://www.justice.gov/usao/nys/pressreleases/May13/LibertyReserveetalDocuments.php

Not sure if it is a plus or a minus.  There is a lot of room for competition, but if they are guilty of something bad enough, maybe it is good that they are stopped?  Bitcoin and all the other alternative currencies put together are still a very very small fraction of the marketplace.

[bitcoinbear]

Not fewer people dude, too many. Total 6 billion dollars got seized and yes people will move to bitcoin for sure.

You are trying to say that more people used Liberty Reserve than live in Cyprus? A country with over a million people and an economy of over 20 billion dollars?

[bitcoinbear]

Not sure if it is a plus or a minus.  There is a lot of room for competition, but if they are guilty of something bad enough, maybe it is good that they are stopped?  Bitcoin and all the other alternative currencies put together are still a very very small fraction of the marketplace.

But even if they are being stopped for cause, there are innocent people whose funds are now frozen. Should I be punished just because my neighbor does something bad?

[MAbtc]

Not sure if it is a plus or a minus.  There is a lot of room for competition, but if they are guilty of something bad enough, maybe it is good that they are stopped?  Bitcoin and all the other alternative currencies put together are still a very very small fraction of the marketplace.

But even if they are being stopped for cause, there are innocent people whose funds are now frozen. Should I be punished just because my neighbor does something bad?

Liberty reserve was always the shadiest of the shady. The VERY shadiest. INCREDIBLY EASY to move money anonymously and frankly, prime pickings for this. At some point, I become less able to sympathize with people who trust their money to those they don't research. If one stopped to look at how money moves through LR, it was clear to see that it was built for laundering money. If one is cool with that -- fine -- if not... probably should have done some sniffing around.

[NewLiberty]

Not sure if it is a plus or a minus.  There is a lot of room for competition, but if they are guilty of something bad enough, maybe it is good that they are stopped?  Bitcoin and all the other alternative currencies put together are still a very very small fraction of the marketplace.

But even if they are being stopped for cause, there are innocent people whose funds are now frozen. Should I be punished just because my neighbor does something bad?

Right, that was basically my point, you shouldn't.  But it is a part of the counter-party risk of using any institution.  Closing the shop peremptorily strikes me as a misplay of the interests of justice, unless the authority was being stonewalled and had no other choice.
Once the authority gets evidence, they can either go for the selective fire, or the carpet bombing, but the selective fire typically will take the compliance of the leadership of the organization.
Once they get stonewalled, they have fewer choices.

This is complicated by the forfeiture laws, which can give seized wealth to the prosecuting authorities organization and lead to big career advancements for the government employees who capture it.  The forfeiture laws lead to much sloppy law enforcement.

[escrow.ms]

Not fewer people dude, too many. Total 6 billion dollars got seized and yes people will move to bitcoin for sure.

You are trying to say that more people used Liberty Reserve than live in Cyprus? A country with over a million people and an economy of over 20 billion dollars?

I didn't compared it with cryprus  

[bitcoinbear]

I didn't compared it with cryprus  

Is this as big as the Cyprus thing? No, because it affects fewer people, but it is just one more thing in a long line of acts which the government is doing which will ultimately push people into using Bitcoins.

Not fewer people dude, too many. Total 6 billion dollars got seized and yes people will move to bitcoin for sure.

Maybe I misunderstood what you were saying? I said it affects fewer people than Cyprus, you said "not fewer", which implies "larger", so to me you are saying that this is larger than Cyprus?

[escrow.ms]

Maybe I misunderstood what you were saying? I said it affects fewer people than Cyprus, you said "not fewer", which implies "larger", so to me you are saying that this is larger than Cyprus?

Ah sorry actually i didn't knew what cyprus thing is that time.  .

[Coinbuck @ BTCLot]

Bitcoin used to be funded with a lot of funds from LR

It's a shame how the whole business was seized without any warning from the authorities.

[mgio]

This is bad for bitcoin. Very bad.

It shows that the US goverment is fed up with virtual currencies that can be used for money laundering. And bitcoin is even MORE anonymous than LR was.

I think this is a bad sign and bitcoin is in trouble.

Look at the trend:

- US govt freezes dwolla account of MtGox
- LR shut down by US govt
- OKPay announces it will stop working with bitcoin (US govt involved??)

That's three less ways you can exchange US dollars for bitcoin.

What comes next?

- US stops international bank wires to bitcoin exchanges
- US shuts down campbx and bitinstant
- US cracks down on local bitcoin sales through localbitcoins
- US companies are banned from accepting bitcoin as payment

Bitcoin crashes and goes away.

[becoin]

Bitcoin crashes and goes away.

The more US government is trying to crackdown on bitcoin related services the more bitcoin will flourish. They know that very well.

[mgio]

Bitcoin crashes and goes away.

The more US government is trying to crackdown on bitcoin related services the more bitcoin will flourish. They know that very well.

I wish I could agree with this, but as long as bitcoin stays underground it will be used for silk road and nothing else.

We need to be accepted by the mainstream, by large companies like amazon.com in order to succeed. That is just beginning to happen now but if bitcoin is made "illegal", those companies are going to run, far, far away and bitcoin won't be used by anyone but the techies, the libertarians, and the crazies on this forum .

[WackyWilly]

This is bad for bitcoin. Very bad.

It shows that the US goverment is fed up with virtual currencies that can be used for money laundering. And bitcoin is even MORE anonymous than LR was.

I think this is a bad sign and bitcoin is in trouble.

Look at the trend:

- US govt freezes dwolla account of MtGox
- LR shut down by US govt
- OKPay announces it will stop working with bitcoin (US govt involved??)

That's three less ways you can exchange US dollars for bitcoin.

What comes next?

- US stops international bank wires to bitcoin exchanges
- US shuts down campbx and bitinstant
- US cracks down on local bitcoin sales through localbitcoins
- US companies are banned from accepting bitcoin as payment

Bitcoin crashes and goes away.

I see what you are doing, want cheap coins right?

I wouldn't say so. The remarks mgio makes are genuine concerns for the future of Bitcoin. (Well, i.e. a future in which it might be widely used by the general public, instead of being used by just the geeky early adopters. A very dim future is also a future, you might say, but I think we'd all prefer a really bright future for BTC).

Should recent developments be all part of a bigger scheme, then you'd better not be "stuck" with your bitcoins. [Yeah, start bashing me now ]  Worst case I'm afraid one day we'll wake up, noticing that the Japanese have shut down MtGox's bank accounts alltogether - this being just a "friendly gesture" towards their US counterparts in Government. They simply wouldn't care a bit.

Not seeing the risks that are mounting indeed, is not being wise IMHO.

[mgio]

This is bad for bitcoin. Very bad.

It shows that the US goverment is fed up with virtual currencies that can be used for money laundering. And bitcoin is even MORE anonymous than LR was.

I think this is a bad sign and bitcoin is in trouble.

Look at the trend:

- US govt freezes dwolla account of MtGox
- LR shut down by US govt
- OKPay announces it will stop working with bitcoin (US govt involved??)

That's three less ways you can exchange US dollars for bitcoin.

What comes next?

- US stops international bank wires to bitcoin exchanges
- US shuts down campbx and bitinstant
- US cracks down on local bitcoin sales through localbitcoins
- US companies are banned from accepting bitcoin as payment

Bitcoin crashes and goes away.

I see what you are doing, want cheap coins right?

No, I bought most of my coins at about $10 and I have plenty. I'd love for it to go back above $200 and higher, but I am seriously considering selling earlier if I see more bad news on the horizon from the US govt.

Like WackWilly said, yes, it's just concern for the future of bitcion. What bitcoin needs now is acceptance more than it needs fewer competitors.

[escrow.ms]

This is bad for bitcoin. Very bad.

It shows that the US goverment is fed up with virtual currencies that can be used for money laundering. And bitcoin is even MORE anonymous than LR was.

I think this is a bad sign and bitcoin is in trouble.

Look at the trend:

- US govt freezes dwolla account of MtGox
- LR shut down by US govt
- OKPay announces it will stop working with bitcoin (US govt involved??)

That's three less ways you can exchange US dollars for bitcoin.

What comes next?

- US stops international bank wires to bitcoin exchanges
- US shuts down campbx and bitinstant
- US cracks down on local bitcoin sales through localbitcoins
- US companies are banned from accepting bitcoin as payment

Bitcoin crashes and goes away.

I see what you are doing, want cheap coins right?

No, I bought most of my coins at about $10 and I have plenty. I'd love for it to go back above $200 and higher, but I am seriously considering selling earlier if I see more bad news on the horizon from the US govt.

Like WackWilly said, yes, it's just concern for the future of bitcion. What bitcoin needs now is acceptance more than it needs fewer competitors.

Agree with you mate, They closed LR because cyber criminals were using it, they all know that bitcoins are getting used in deepweb and they have a eye on it.

[crazy_rabbit]

This is bad for bitcoin. Very bad.

It shows that the US goverment is fed up with virtual currencies that can be used for money laundering. And bitcoin is even MORE anonymous than LR was.

I think this is a bad sign and bitcoin is in trouble.

Look at the trend:

- US govt freezes dwolla account of MtGox
- LR shut down by US govt
- OKPay announces it will stop working with bitcoin (US govt involved??)

That's three less ways you can exchange US dollars for bitcoin.

What comes next?

- US stops international bank wires to bitcoin exchanges
- US shuts down campbx and bitinstant
- US cracks down on local bitcoin sales through localbitcoins
- US companies are banned from accepting bitcoin as payment

Bitcoin crashes and goes away.

I see what you are doing, want cheap coins right?

No, I bought most of my coins at about $10 and I have plenty. I'd love for it to go back above $200 and higher, but I am seriously considering selling earlier if I see more bad news on the horizon from the US govt.

Like WackWilly said, yes, it's just concern for the future of bitcion. What bitcoin needs now is acceptance more than it needs fewer competitors.

Agree with you mate, They closed LR because cyber criminals were using it, they all know that bitcoins are getting used in deepweb and they have a eye on it.

Well it's important for Exchanges and Bitcoin companies to comply with regulation and we will be fine. it will be a struggle but we will come out on top.

The more of these shady exchange businesses get closed down the better. The government can't shut down bitcoin, and they can't stop some people from doing shady business with it (just like cash) but they can make the legitimate business act in a legal manner and this is a good thing.

[rtt]

...if they are guilty of something bad enough, maybe it is good that they are stopped?

They are guilty of NOT being Obedient Snitches.
A grave sin in the eyes of the Government and some commenters on this thread...

[old_engineer]

We need to be accepted by the mainstream, by large companies like amazon.com in order to succeed. That is just beginning to happen now but if bitcoin is made "illegal", those companies are going to run, far, far away and bitcoin won't be used by anyone but the techies, the libertarians, and the crazies on this forum .

Right now, Bitcoin is accepted at Amazon through Gyft.  I bought a large gift card today, cashing out a few coins around $129, mostly because I'm bearish on the LR news, and it was time to cash out 10% anyways.  (side note: Bitpay gives a reasonable exchange rate, apparently at the point where enough btc are available on the bid side at MtGox to cover the sale of the card's btc).

The LR news may push the former LR users into bitcoin with whatever money that wasn't seized, but as you correctly pointed out, businesses are less likely to send money to an online currency exchange with front-page NYTimes headlines like "A case against Liberty Reserve, an online currency exchange, is believed to be the largest global money laundering prosecution ever, the authorities said." link

Already, the LR news has had a chilling effect with the voluntary cutting off of OKPay to bitcoin exchanges. Also, because of the recent FinCen action against MtGox, Bitfinex voluntarily stopped using MtGox citing the risk of a MtGox seizure, which is why Bitstamp and MtGox exchange prices have diverged.  The feds are taking action, and are having a measurable effect on bitcoin already.

The feds have shown that they
1) have very long arms that can reach even into Costa Rica and grab a former American that had renounced citizenship, and start extradition proceedings.  Japan isn't too far.
2) are willing endure the collateral damage of hundreds to thousands of legitimate users of LR

The Feds may not be able to shut down bitcoin, but they know the mantra "follow the money", and I think they might start coming down on exchanges. The justification won't be that bitcoin itself is illegal.  What they'll do is say that the exchanges are not stopping money laundering, online drug sales, weapon sales, or child porn.  At least, that's what the headline will read, regardless of factual accuracy.

Best case scenario for Bitcoin is that MtGox is working with US feds to identify SR vendors, and announce a mass bust of them.  This would mean that the feds are working _with_ the exchanges to identify lawbreakers, rather than trying to shut down the whole damn thing like they did with SR.  No one likes the strict MtGox AML rules, but that might be the difference between the exchanges getting shut down LR style, and being allowed to exist by the Feds.