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Author Topic: I feel it is my duty to warn you all.  (Read 4495 times)
Nomen nescio
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June 24, 2011, 09:17:41 AM
 #1

I cannot post outside this area, but perhaps some of you might benefit from what I have to say.

I work in finance for an international NGO and have been watching this bitcoin saga unfold with some academic curiosity and no small level of entertainment. I have no problems with bitcoin as a concept, and the agencies and governments I work with have little concern aside from its potential use as a medium for money laundering, though even in this respect it is still a very minor one given the tiny size of the bitcoin economy relative to that of other illicit financial activities. On the list of priorities, it isn't. So you all have no need for worry there from what I have heard.

However.

This is a world with laws. The frankly hilarious incompetence with which MtGox has been operating cannot be allowed to continue. Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this. Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided. It is for this reason that I contacted a colleague with the Japanese Financial Services Agency, who will be investigating MtGox for operating in violation of the Financial Instruments and Exchange Law. Their criminal negligence will end up costing many of you money; hopefully my warning here and swift action by the Japanese authorities will minimize that.

Enjoy.
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Vladimir
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June 24, 2011, 09:24:33 AM
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Fair enough. Why do you think I have not started an exchange in UK? Yep, could not afford or raise 200-500k£ required to get FSA license and cover compliance costs.

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raf
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June 24, 2011, 09:25:08 AM
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I just wonder how long a tip like that will take to trickle thru the Japanese system before anything would be done. likely there is no precedent for something like this either. as much as people call bitcoin a currency it is really not and is not subject to the same financial standards and laws. for instance could i get that same agency involved if someone stole all my wow gold it is effectively the same concept and is a "digital currency" as well.
there is a huge grey area here and it will likely be addressed in the coming months.  just my 2 cents  Wink

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Opsamk
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June 24, 2011, 09:26:00 AM
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Miners dont have to worry if they have a resaleable computer.

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Maasu
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June 24, 2011, 09:26:37 AM
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Terrible troll, 4/10 for effort.
Vladimir
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June 24, 2011, 09:27:51 AM
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Terrible troll, 4/10 for effort.

May be, but his post sounds plausible.

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Opsamk
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June 24, 2011, 09:31:08 AM
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I forgot to mention that OP is the kind of person that leads to market crashes.

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caveden
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June 24, 2011, 09:35:04 AM
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Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this.

Regulation, no matter what you naively believe, exists to get rid of annoying competition, concentrating market shares and income.

Learn about "public choice", the first 20 seconds of this video might enlighten you a bit: http://www.youtube.com/watch?v=6uR4lqa7IK4
Regulations cause that effect much more effectively and transparently ("disguisedly") than simple government spending.

Anyway, you probably won't care, I'm probably losing my time here.

Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided.

Yeah, pretty much like the much more serious hack of Sony was avoided, right?

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Nomen nescio
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June 24, 2011, 09:37:45 AM
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I just wonder how long a tip like that will take to trickle thru the Japanese system before anything would be done. likely there is no precedent for something like this either. as much as people call bitcoin a currency it is really not and is not subject to the same financial standards and laws. for instance could i get that same agency involved if someone stole all my wow gold it is effectively the same concept and is a "digital currency" as well.
there is a huge grey area here and it will likely be addressed in the coming months.  just my 2 cents  Wink

This was an area of some discussion. However, there are several sections that may apply. I'm sure that the lawyers will be sorting much of this out for years (in general, not specific to this case), but the "low hanging fruit" here seems to be dealing in deposits in a foreign currency for investment purposes that may lose value owing to fluctuations in traditional forex markets, even though in this case they were unlikely to be converted into yen.
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June 24, 2011, 09:37:59 AM
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I forgot to mention that OP is the kind of person that leads to market crashes.

Market crash would be good, it will probably slow down difficulty increase, an give us all more time to mine more coins before exchange rates hit stratosphere.

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caveden
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June 24, 2011, 09:39:50 AM
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Fair enough. Why do you think I have not started an exchange in UK? Yep, could not afford or raise 200-500k£ required to get FSA license and cover compliance costs.

Imagine how many business, in so many different sectors, fail to be created due to these kind of requirements?
These artificially created barriers to entry only serve to benefit those who are already established. It's sad to see so many people doesn't getting it and supporting more of these regulations, and at the same time they blaming free markets for income disparities.

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Vladimir
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June 24, 2011, 09:40:36 AM
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caveden, very true

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realnowhereman
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June 24, 2011, 09:42:34 AM
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Regulation is not needed.

Mt.Gox will be regulated by the market.  As we'll see when it eventually opens.

Some will leave, some will stay.  But it will be in exact proportion to the damage each individual feels, and the risk they are subsequently willing to take.

As we all learn lessons about risk in a bitcoin economy, those lessons will lead people to ask more difficult questions of their exchanges.  The poor performance of Mt.Gox has left a huge market opportunity for an exchange that posts incredibly strong security policies, detailed descriptions of internal operations, and even publication of exchange source code.

The market will sort the problem out.  Regulation would just destroy potential start ups.  Non-creation because of regulation is an opportunity cost that is impossible to measure; but it is almost certainly a huge loss to economies.

However, I suspect that the OP is just a troll, and missed out the obligatory, "so you should all sell your bitcoins as quickly as possible when Mt.Gox opens."

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June 24, 2011, 09:45:55 AM
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However, I suspect that the OP is just a troll, and missed out the obligatory, "so you should all sell your bitcoins as quickly as possible when Mt.Gox opens."

Yup, or another "reincarnation" of Kevin.

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June 24, 2011, 09:46:50 AM
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Yeah, pretty much like the much more serious hack of Sony was avoided, right?

Sony is not a financial exchange.

But yes, if you think you will convince me that regulation is unnecessary, you are wasting your time. It, even if imperfectly, does ensure a more or less level playing field, a single set of rules, and most importantly accountability when things go awry. Nothing against bitcoin, knock yourselves out. I honestly do believe it will survive, just with different markets.
Mosho
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June 24, 2011, 09:50:28 AM
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I cannot post outside this area, but perhaps some of you might benefit from what I have to say.

I work in finance for an international NGO and have been watching this bitcoin saga unfold with some academic curiosity and no small level of entertainment. I have no problems with bitcoin as a concept, and the agencies and governments I work with have little concern aside from its potential use as a medium for money laundering, though even in this respect it is still a very minor one given the tiny size of the bitcoin economy relative to that of other illicit financial activities. On the list of priorities, it isn't. So you all have no need for worry there from what I have heard.

However.

This is a world with laws. The frankly hilarious incompetence with which MtGox has been operating cannot be allowed to continue. Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this. Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided. It is for this reason that I contacted a colleague with the Japanese Financial Services Agency, who will be investigating MtGox for operating in violation of the Financial Instruments and Exchange Law. Their criminal negligence will end up costing many of you money; hopefully my warning here and swift action by the Japanese authorities will minimize that.

Enjoy.

Even with all the regulation, look what happened to the states just a few years back. You can be incompetent with or without regulation. The only difference is that only some incompetence is backed by the most powerful government in the world. (for now)
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June 24, 2011, 09:54:28 AM
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And really, yes, I did speak with the FSA. If Mark has complied with all applicable laws, then everything will be fine. But I assure you, they will be investigating.

I have no financial interest in this game. I just thought I'd let you all know.

Anyhow, nice speaking with you all, but I have things that need my attention.
raf
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June 24, 2011, 09:55:22 AM
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i agree that regulation is not needed. i have a feeling regulation and intervention by authorities will do nothing to stop bitcoin as a whole. sites may come and go exchanges may be brought down by their own incompetence or by local government intervention but another will pop up and take its place thats what so great about bitcoin anybody can get into it not just the people who currently control all the wealth . exchanges will just move to places where authorities have no jurisdiction.  I am for some regulation when it comes to user safety and fraud protection but cant stand the regulations that keep corrupt people and businesses in power.  

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kerogre256
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June 24, 2011, 09:55:38 AM
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Yeah, pretty much like the much more serious hack of Sony was avoided, right?

Sony is not a financial exchange.

But yes, if you think you will convince me that regulation is unnecessary, you are wasting your time. It, even if imperfectly, does ensure a more or less level playing field, a single set of rules, and most importantly accountability when things go awry. Nothing against bitcoin, knock yourselves out. I honestly do believe it will survive, just with different markets.
Yeh riiiiight what about flash crash 6.05.2010. fat fingers my ass regulation are here to protect ppl in power.
malditonuke
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June 24, 2011, 09:57:31 AM
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And really, yes, I did speak with the FSA. If Mark has complied with all applicable laws, then everything will be fine. But I assure you, they will be investigating.

I have no financial interest in this game. I just thought I'd let you all know.

Anyhow, nice speaking with you all, but I have things that need my attention.

Thanks, Mom.  See you in hell.
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