I feel it is my duty to warn you all.

[Nomen nescio]

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.

[1713863639]

1713863639

[1713863639]

1713863639

[1713863639]

1713863639

[Vladimir]

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.

[raf]

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  

[Opsamk]

Miners dont have to worry if they have a resaleable computer.

[Maasu]

Terrible troll, 4/10 for effort.

[Vladimir]

Terrible troll, 4/10 for effort.

May be, but his post sounds plausible.

[Opsamk]

I forgot to mention that OP is the kind of person that leads to market crashes.

[caveden]

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?

[Nomen nescio]

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  

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.

[Vladimir]

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.

[caveden]

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.

[Vladimir]

caveden, very true

[realnowhereman]

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."

[Grant]

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.

[Nomen nescio]

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.

[Nomen nescio]

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]

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.  

[kerogre256]

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]

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.

[Nomen nescio]

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)

Years of gradual deregulation and malfeasance. The laws that would have prevented much of the US economic crisis were repealed. Not that there might not have been a different crisis in its place, bright minds can be very creative when finding ways to make money.

Really though, I'm off.

[deepceleron]

Good luck with that one. This is an organization that is run by English-speaking foreign nationals (or cyber-pseudonyms) who just happen to be in Japan and can leave on a whim, hosted through a Florida company specializing in DDOS mitigation with globally distributed servers, with bank accounts in several foreign countries receiving and sending Dollars (not Yen). They are connected to a worldwide unfettered payment system that is redundant with no central choke point and has more computing power than Japan's biggest supercomputer. They can receive dollars from Brazil that end up in Spain, and can exchange wire transfers from Thailand for a global virtual currency used for buying socks from halfway around the world. They are too global to regulate, and their profit is in a currency that government doesn't want 30% of.

Unfortunately, the level of trust they have earned to secure the interests of their users puts them somewhere between Citibank and Sony. They have not disclosed the purpose of a huge transfer of BTC out of their main wallet during a time when the site may have been compromised but still running, the biggest single transfer of BTC ever, and it remains to be seen if it was insurance or a huge cybertheft.

Edit: I just noticed this huge transfer of 424,242 when exploring blocks: http://blockexplorer.com/tx/3a1b9e330d32fef1ee42f8e86420d2be978bbe0dc5862f17da9027cf9e11f8c4

It looks like mtgox decided to transfer about 6.4% of all bitcoins in existence again just to show they still have them:
http://forum.bitcoin.org/index.php?topic=21436.0

[BitMofo]

Yeahhh... I think the main risk of bitcoin is governments deeming it illegal. Yes it would still be able to operate (like bittorrent etc) but it would not take off like it should

[lame.duck]

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.

Oh well, thats true, especially for nuclear power plants, air lines, medical services and so on i guess. In fact there are regulations made just for keeping out newcomers, but a far bigger problem seems to me that the existing and 'good' regulations will not be controlled and enforced by the rasponsible entities.

[Hawker]

I'm not sure OP has understood the nature of bitcoin.  Having one exchange subject to investigation is a global decentralised system doesn't matter at all.  Provided they repay their debts when they re-open, mgtox will be fine. 

[dizznizzle]

You aren't required to use the exchange services.

[memvola]

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.

What would be avoided exactly? Hacking of accounts?

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.

This can only help make the road more bumpy. If the problem were about their capital, sure, but I think in this case you are way off. Why would anyone try to make it harder for them to recover is beyond me. At least in this case, the problem is not what you think it is. I suggest that instead of trying to prevent crimes, which you can't by more regulation, maybe you could focus on what the crime is and who committed it.

Of course, in your line of thinking, we could regulate the Internet to prevent such attacks ever happening. That would solve all our problems, wouldn't it?

EDIT: And yes, they have locked my account with a considerable amount of dollars in it and unreasonably rejected my claim. Yes, I find it rather incompetent. No, I wouldn't prefer them not ever existing in the first place. Let me choose who to trust. Maybe if this "regulation" authority were an NGO and give a badge of sorts to complying exchanges, that would make some sense?

[BTC Economist]

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."

This is hilarious.  The market will regulate Mt. Gox??  Really?  You must really assume everyone is benevolent then.  Mt. Gox will surely be happy to steal all the bitcoins in the absence of regulation.  I suspect that will be the next bitcoin crisis.  No hacker next time.  Just the exchange running off with the money and bitcoins.

[BTC Economist]

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?

Go to school.  Youtube is not an education.

[BitcoinPorn]

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.

Recipe for laughter.   Read the above post IN THIS VOICE

[Clipse]

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.

Welcome and good bye.

Seems like another fear mongering out look, you seem to approach it solely from the situation you are in and in some sense fearfull.

MTGOX had a stuffup and its being fixed. Please inform me of their criminal negligence, they did not steal funds from their own users and if your site gets hacked its a criminal offense by the hackers.

You seem to suggest that regulated institutions do not get hacked and robbed(usually at the cost of clients) , and no when this happens its usually diverted to the clients to prove they didnt disclose their own banking details which is next to impossible to prove or disprove.

Funniest part of your comment is the suggestion that this could be prevented with regulation, hahahahaha you may apply for a comedic job within the financial sector, regulation do not prevent hacking situations.

I think you should go back to your NGO and fiat currency and let us deal with our situations cause I see the whole fiat/bitcoin as two opposite fronts and eventually it will class and true colours will be exposed.

Oh and stop promising that you are leaving, just do it.

[goodlord666]

+1
gotta love the troll posts

[indicasteve]

Mt. Gox != bitcoin

http://www.google.com/trends?q=bitcoin%2C+Mt+gox&ctab=0&geo=all&date=mtd&sort=0

Google trends shows Mt. Gox is only 4% of bitcoin news.  Yawn.

You will FAIL at stopping anything sir.

[realnowhereman]

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.

Oh well, thats true, especially for nuclear power plants, air lines, medical services and so on i guess. In fact there are regulations made just for keeping out newcomers, but a far bigger problem seems to me that the existing and 'good' regulations will not be controlled and enforced by the rasponsible entities.

The normal self-regulation framework of a market is that people vote with their feet.  It works fine.  The only time it doesn't is when a single failure is so catastrophic that there is noone left with feet.

Your examples are very special cases.  Personally, I wouldn't mind unregulated medical or air line companies.  Those that killed their customers wouldn't last long.  Depends how willing you are to risk other people's lives I suppose.  A nuclear power failure hurts more than just the customers of nuclear power though.

If I see a role for government it is this: it is their job to internalise economic externalities.  For nuclear power, it's obvious what the externality is: killing a bunch of people.  That needs to be made so economically painful that nuclear companies don't do it.

Banks, money exchanges, mop manufacturers, potato farmers on the other hand... they should all just be left to it.  Contract law and a populace that hasn't been trained to be children will sort those problems out.

[realnowhereman]

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.

This is hilarious.  The market will regulate Mt. Gox??  Really?  You must really assume everyone is benevolent then.  Mt. Gox will surely be happy to steal all the bitcoins in the absence of regulation.  I suspect that will be the next bitcoin crisis.  No hacker next time.  Just the exchange running off with the money and bitcoins.

Yep.  People will decide Mt.Gox is useless (or not, their choice) and will go somewhere else.  That's pretty final as far as regulation goes.

You don't seem to get it: regulation by the market won't create a list of regulations that Mt.Gox must abide by; customers will simply stop using their service in favour of some other exchange that does provide what they want.

Mt.Gox stealing coins is not a regulatory issue; it's a criminal one.  No regulation would stop the theft you seem to worry about.

[0v3rki11]

I just wish people would stop trying to screw with my nerd money. >8|

[wamatt]

Mt. Gox != bitcoin

http://www.google.com/trends?q=bitcoin%2C+Mt+gox&ctab=0&geo=all&date=mtd&sort=0

Google trends shows Mt. Gox is only 4% of bitcoin news.  Yawn.

You will FAIL at stopping anything sir.

Actually it's more like 8% (mtgox versus mt gox). But still your point remains.

https://www.google.com/trends?q=bitcoin%2C+Mtgox&ctab=0&geo=all&date=mtd&sort=0

[jgraham]

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.

I always have a certain degree of skepticism with the label-heavy and fact-free style of posting.   Ok, currently Mt. Gox is sticking to their story:

It appears that someone who performs audits on our system and had read-only access to our database had their computer compromised. This allowed for someone to pull our database. The site was not compromised with a SQL injection as many are reporting, so in effect the site was not hacked.

Submitting to an audit is an act of regulation.  There's no small irony in the fact that what you suggest was the vector of attack.  It's not unreasonable that had all the regulation you expected would have had precisely the same effect.   Why?  It's unlikely that the auditor requested usernames and passwords to be visible.  It simply was the easiest way to provide the data they auditor wanted was to give them access to everything.
 
Assuming Mt. Gox's story is true.  What actually caused the problem is likely a simple lack of policy.  Passwords don't go to auditors.  The idea that somehow all the things you mention would create a strong security policy is adorable in it's naivete.  If Shostack had a single point in his book The New School of Information Security it would be that only a vanishingly small percentage of data breaches are disclosed.   Ergo, there is no possible way you could know - in general - if the kind of regulation you suggest would have had a protective effect.       

[makomk]

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

*snort* We've seen how well that works. Mt Gox has been massively, spectacularly negligent about security on multiple occasions, people appear to have lost money as a result, and look how much the market's actually punished them: it hasn't. Why not? Because no-one actually has access to the information required to tell for sure how secure Mt Gox actually is right now, so they end up making judgements based on gut feelings and justify them with arguments like "because Mt Gox has gotten hacked that means they're going to be more secure than exchanges that haven't been hacked repeatedly". This is actually a fairly well known problem with the free market and computer security issues.

[TheSpanishGuy]

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."

+1000000

[static]

I feel it is my duty to warn you all...

i just farted -

and it is strong enough to penetrate teh innanetz.

[Anonymous]

Regulations only benefit the existing players and dont do anything to actually signal the correct course of action.

[Anonymous]

I feel it is my duty to warn you all...

i just farted -

and it is strong enough to penetrate teh innanetz.

bitcoin forums = a public toilet.

congratulations on showing why the toilet is never meant to go near the front door.

[static]

sorry. just trolling the OP troll...

[realnowhereman]

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

*snort* We've seen how well that works. Mt Gox has been massively, spectacularly negligent about security on multiple occasions, people appear to have lost money as a result, and look how much the market's actually punished them: it hasn't. Why not? Because no-one actually has access to the information required to tell for sure how secure Mt Gox actually is right now, so they end up making judgements based on gut feelings and justify them with arguments like "because Mt Gox has gotten hacked that means they're going to be more secure than exchanges that haven't been hacked repeatedly". This is actually a fairly well known problem with the free market and computer security issues.

What are you talking about?  If people want to use the argument "they'll be more secure now they've been hacked" that is their choice, not yours.  If you think Mt.Gox is insecure, excellent, move elsewhere.  Tradehill has seen a huge boost in volume since the Mt.Gox hack.  That is the market regulating exactly as I said it would.

I suspect there is still a market opening for an exchange that actively promotes its security.  When that appears, we'll see more self-regulation of the market going on.

You seem not to have read passed the sentence you quoted in my post.  Mt.Gox has suffered loss of business.  It has suffered in exact proportion to the number of customers who took their money and went somewhere else.  Mt.Gox will know this; and so will every other exchange.

What on earth makes you think that regulation creates better outcomes?  I grant you that regulators have much better PR.  They are just the people you want on hand just after a disaster.

http://money.cnn.com/2011/06/27/technology/citi_credit_card/index.htm?hpt=hp_t2

[makomk]

What are you talking about?  If people want to use the argument "they'll be more secure now they've been hacked" that is their choice, not yours.  If you think Mt.Gox is insecure, excellent, move elsewhere.  Tradehill has seen a huge boost in volume since the Mt.Gox hack.  That is the market regulating exactly as I said it would.

And their choice provides no incentive for sites to actually care about security. Worse, nearly all of the loss of business seems to be a result of them failing to bring the site back up again promptly; it's punishment for caring too much about security.

I suspect there is still a market opening for an exchange that actively promotes its security.  When that appears, we'll see more self-regulation of the market going on.

We won't, because there's no way for users to verify these marketing claims are true. Most likely everyone will assume that they're lying and continue using Mt Gox, with a few widely-read conspiracy theories claiming they're the ones that hacked Mt Gox in the first place. (I came to this conclusion because in a way this has already happened with Tradehill.)

[Elwar]

If bad things happen at MtGox...then people stop using it and move to something more stable. No regulation required here. Move along.

QED

[d3wo]

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.

Bring it ON OP!    don't just trollin, give real action!
I'd love to see how you tackle this system 
Apperently you forgets this system is made to liberate people from trollz ?
Let us see how many bullets you have 

[Yatta99]

I hear that the Japanese government is assigning the Strike Witches to take care of this problem   

[twobits]

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.

So you personally have no skin in the game, no one asked you for your 'help', and yet you felt the need to bring them more trouble?   Your own life so boring you have the need to be a busy body?   Wonder what personality disorder creates that type of need in a person, and what they feel they gain  from it.  If we could figure that out, maybe we could figure out a way to divert and channel these types of people into more useful activities.

[twobits]

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  

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.

An exchange is an exchange,  it has nothing to do directly with investment,  how can you assume that someone that wants to buy a bitcoin or sell a bitcoin is doing it for investment purposes and not transactional?

[iambean]

I notice that people get extremely defensive when someone makes a valid point such as the OP. I'm curious as to why? I'm not taking a stand here, or saying I agree/disagree with the OP, but why all the hostility?  

How much money does Mt. Gox have? I see people posting about long delays in getting their cash out. Could this be a liquidity flag? Are they using up the cash that comes in to operate in hopes of paying off the orders?

Let's forget about the hack, that could have happened to anyone, but honestly what system is in place to ensure that any exchange doesn't just rack up the coins/cash and shut down over night?

Has it been agreed by the community that we simply have to trust an exchange in the name of bitcoin?

Again, these are just questions that I've had and every thread that starts to talk about it gets bogged down by people crying foul, etc. Why?

[twobits]

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.

Sony deals in a number of virtual currencies, and operates a market and exchange for digital goods.  

You are one of the more dangerous types of people.  Ignorant of the field,  yet not even aware of such.  Also, already admitted to being close minded, and yet a busy body.

[twobits]

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.

Lol,  again admit no skin in the game.  Busy bodied, pompus and no time to even discuss and learn.

[twobits]

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)

Years of gradual deregulation and malfeasance. The laws that would have prevented much of the US economic crisis were repealed. Not that there might not have been a different crisis in its place, bright minds can be very creative when finding ways to make money.

Really though, I'm off.

Wrong again,   but no point in trying to educate you since you are off.

[twobits]

Go to school.  Youtube is not an education.

Nor is schooling, especially these days.

[royalecraig]

Govt's and their Central Banker Puppet Masters are the Biggest Crooks, regulation isn't about public financial security it's about them maintaining control over the money supply.
I'm not saying you're wrong, but the entire western financial model is a massive Ponzi scheme, and you're right, what is there to stop MtGox running off with people's money, so maybe people need to think about that but suggesting the Govt ( Ben Bernanke ) 'regulate' the Bitcoin economy, there has to be a better way or we will end up with the same system we are trying to escape.
No Govt run regulating authority will ever let Bitcoin run as a truly free market monetary system,

[Colargol]

Worth thinking about... 
hmm...
okay I'm done...   


Money is the root of all evil
and the leaves of kindness
so why not relieve yourself
and kindly leave some to me

 

[vectorvictor]

 ... this bitcoin saga ... relative to that of other illicit financial activities ...

This is a world with laws ... cannot be allowed to continue ... Regulation ... reporting ... disclosure ... capital requirements ... structure and organization ... market manipulation, and so on ...

i, for one, welcome our new financial overlords.

[Tulkas]

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.

Totally agree. Those compliance costs seems more like a barrier to entry than anything else.

[lame.duck]

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.

Totally agree. Those compliance costs seems more like a barrier to entry than anything else.

And why not to rent a postbox in Japan or the cayman islands and start business there?

[btcvc]

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.

This is pretty funny, considering how much market manipulation goes on in the "regulated" markets you hold so dear. Take a look at CCME and SPNG for an example of how well regulation works in the United States. Your fear mongering is not really necessary. Even after the enormous mtGox "hack" (which is a pretty loose definition by the word), the value of Bitcoins never went below $10.

Any similar scandal would've turned any normal company into a pink sheet stock!

Bitcoin is backed by faith in cryptography and solid networking principles and not by faith in a bunch of guys that can't tie their shoes without litigation and can't keep their pricks in their pants to save their lives.

[TheGer]

And Regulation has worked out so well.  First World Nations are having their Economies regulated right out of existence...

"Regulation, no matter what some of you seem to think of it, exists for a reason"

[Agozyen]

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.

 Thanks for letting us know that the government isn't interested in Bitcoin beyond it's money-laundering capabilities.  I feel SOOOOOoo much safer now that I have your word on this.  It was very kind of you to take the time to follow and research Bitcoin all this time to step in and calm all our fears.  It's truly soul-soothing.  I can sleep now.  It's actually good that I now know this because I haven't been sleeping well, and I blame Bitcoin!  But thanks to you and your MASSIVE breadth of knowledge on Bitcoin, I feel safe.  Your total of 5 posts as of this writing surely qualify you as an expert on the subject of Bitcoin, even though it's been around for two years and you registered your Bitcoin forum account on June 24 2011.  Again, thank you for reporting MtGox, a company you have no interactions with, to the appropriate authorities.  That certainly makes me feel better, knowing that there are people like you, willing to stick your noses in other peoples business for no reason at all.  Three cheers for Nomen nescio!  Let's all cheer for this brave individual who was willing to stand out from the crowd and be identified!  Oh wait...

 Nomen nescio = anonymous. Do you really think we are that stupid?  Do you really think of yourself as some kind of anonymous super hero?  GTFO Troll.

 How would regulation have prevented the hack?  Laws already exist against hacking.  And unauthorized use and so on.  What we have here is another 'Wall-Street' type that can't wrap his head around Bitcoin.

[bonker]

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.

Good point buddy. Innovation not regulation.

[helmetedwarrior]

I have one thing to say about this fear mongering about bitcoin...Blah Blah Blah Blah Blah...like anyone really cares.

[indio007]

So your a snitch , so what? I can prove bitcoins are backed by a valuable consideration. I'd really like to see you do the same with USD. The are supposed to be redeemable in lawful money on demand as per US Code Title 12 -Section 411. Have you ever actually done so? Has anyone in the last 20 years redeemed a federal reserve note for lawful money? Don't talk about rules and regs when the Kleptocracy you support ignores them. Shit FRN's don't even claim to be payable on their face.

You might be able to trick the dregs but some of us know about money  starting with Lord Holt making inland bills of exchange akin to foreign bills of exchange... which is what an FRN theoretically is.

[ryannathans]

Can I hold a bit coin? No.
Can I touch a bit coin? No.
Is it illegal? No.
Is it traceable? No.

Whacha gonna do?

Prove that I have X amount of bit coins.

Oh wait, you can't? That's tragic.

[Hunterbunter]

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.

Nonsense. Regulation is inherent to all human interaction. It is not possible to conduct any transaction at all, ever, without a form of regulation applied on the transaction by one or both parties, with established consequences of failing. The rules of engagement (regulation) specifically describe the common transaction, so to even consider regulation's necessity is irrelevant. Regulation can be established by any group, or person, and others can choose to follow, or not. Government regulation only has meaning because there is a police force to enforce it, but there is no difference to the regulation customers apply when they pressure MtGox to not be so fail. This is the nature of human hive dynamics, or group psychology.

What is at quest here is who knows how to regulate a market better; politicians, self-interested bankers, or self-interested plebs. Bitcoins are giving the power to the plebs to regulate their own wealth. Of course governments won't like that, because money manipulation is how they make people pay for stupid wars, and may have regulations to stop plebs having these crazy ideas of grandeur and self empowerment. I personally believe the plebs are the better ones to back, because they act just as efficiently as bankers or politicians (probably more stably), but don't have the super greed of power bankers, nor the power inebriation of politicians.

[kgutteridge]

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.

Very true, the amount of regulation in doing business is considerable, lets not even get started in companies having to charge each other VAT

[Rage]

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.

Regulation in the financial markets are not to 'protect people' anymore than the USA PATRIOT act is to 'stop terrorists'. Financial regulations exist because those in the industry want to make the bar to entry as high as they can in order to discourage competition. It has nothing to do with protecting people.

The Mt. Gox hack was unfortunate and it's something I think the site could have prevented with better security procedures. However, regulating them isn't the answer. What is the answer is to allow the free market to work. Gox users largely gave them a pass this time. Next time, they won't be so lucky. In a market where there is competition, irresponsible parties don't last very long. The market takes care of them without the need for any regulation.

Personally, I cringe every time I see the discussion of Bitcoin market regulation. This is an excellent opportunity to demonstrate the unbridled power of the free market. Regulation won't help the market, it will only extend governmental power into yet another area of peoples lives where it doesn't need to be.

Rage

[Sovereign]

Man what I love about this is that, when statists argue for more regulation here, we don't even need to explain why it's wrong to regulate. Any regulation is simply un-enforceable 

[Rage]

Man what I love about this is that, when statists argue for more regulation here, we don't even need to explain why it's wrong to regulate. Any regulation is simply un-enforceable 

The 'regulation is unenforceable' belief is common and it's largely true with person to person transactions. But what is possible is forced regulation of the exchanges which would have a chilling effect on the market, I believe.

I heard one of the guys from the project do an interview with CBS News and he said that Bitcoin (I presume he was talking about the exchanges) is working with regulators on things like the 'Know your Customer' regulations, etc. Bad, bad, bad idea.

[lame.duck]

The 'regulation is unenforceable' belief is common and it's largely true with person to person transactions. But what is possible is forced regulation of the exchanges which would have a chilling effect on the market, I believe.

I heard one of the guys from the project do an interview with CBS News and he said that Bitcoin (I presume he was talking about the exchanges) is working with regulators on things like the 'Know your Customer' regulations, etc. Bad, bad, bad idea.

Isn't the law that forbids unauthorized use of someones computer etc. some sort of 'Bad, bad, bad' regulation? Real man can protect their PC or should stay away from the internet

By the way, can you tell me one big bank that doesn't pay pro-deregulation lobbyists?

[Rage]

Isn't the law that forbids unauthorized use of someones computer etc. some sort of 'Bad, bad, bad' regulation? Real man can protect their PC or should stay away from the internet

By the way, can you tell me one big bank that doesn't pay pro-deregulation lobbyists?

Yes, the law that forbids unauthorized use of someone's computer a bad law. The government is not responsible for protecting your computer, you are. Protecting your computer from intrusion is not rocket science. I'd argue that if you cannot protect your computer adequately and it was invaded and used against someone else, it should be your responsibility to offer redress to the person harmed.

As to your question about banks, I can't really answer it since I don't understand your point. Sure, banks *want* to be deregulated but they won't be. Regulation of the banking industry is part of what makes sure it's hard to open a bank and it helps prop up the smoke and mirror game of fractional reserve banking.

[Title12USC§411]

Sadly the problem for Mt.Gox is they are infected with Federal Reserve Notes (a virus called "USD" for which there is NO legal definition) which are HEAVILY regulated.  And this infection will prove to be one hundred times worse for Mt.Gox than correcting the recent compromise.

BTC will perform exceptionally well when folks EXCLUSIVELY trade BTC directly for products/services etc where NO exchange to a fiat currency is needed/required.  

Until BTC are weened from the necessity of converting back and forth to such phony fiat currencies the usual trolls - IRS/Treasury/US Attorney/State Attorney Generals/CompTROLLER of the US fiat Currency - will be a trollin' for fun and profit.

[NghtRppr]

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 can also be avoided by competition. Companies that are incompetent will eventually be out-competed by others. The companies left standing are better than the ones that failed. The fact people are still using Mt Gox tells us that it wasn't that big of a concern. Stop thinking that you know what's best for other people and let them make their own choices, their own mistakes even.

[lame.duck]

Yes, the law that forbids unauthorized use of someone's computer a bad law. The government is not responsible for protecting your computer, you are. Protecting your computer from intrusion is not rocket science. I'd argue that if you cannot protect your computer adequately and it was invaded and used against someone else, it should be your responsibility to offer redress to the person harmed.

Do you really think that MTGox has enought assets so compensate for the total loss on all bitcoins in their wallet? As i read some days ago it sems that there were enough security holes to get arount the 1000$/day limit? Is copying someones wallet.dat illegal at all? Maybe the DCMA (fair use clause) applies and the copyist is only allowed to spend 10% of the bitcoins.

As to your question about banks, I can't really answer it since I don't understand your point. Sure, banks *want* to be deregulated but they won't be. Regulation of the banking industry is part of what makes sure it's hard to open a bank and it helps prop up the smoke and mirror game of fractional reserve banking.

At least in europe there were severe regulations that were taken down in the past 'to develop the markets'. Will you tell me someone that can't affort half a million $ to pay for a banking license is thrustworth to put his money there? And even without, paypal did operate in Europe several years without a banking license.

[lijji]

It is possible.  Start moving around too much money and the tax collector is sure to show up for their share.   

[Bamalam]

Regulations on btc and other alt.currencies are said to be implemented in 2018

anyone knows / can guess what effective ways to regulate cryptomarkets can arise?

and, obviously, how to workaround?

[kingzpro]

bitcoin is not scam, it is a new technology called blockchain technology and soon you will see more and more businesses and services benefitting from this technology.

[Digital Mutant]

This thread is about 7 years old...

If you want to know more about mtgox and what happened just google it!

[Odemsi]

I'm new