So what happens if Gox misses their deadline in one week?

[CurbsideProphet]

What happens if Gox misses their deadline?  For me, nothing.  Left their ass months ago.

[arbitrage001]

Well. I think people can still buy bitcoin and move it elsewhere.

This implies having problems with authority rather than solvency issue. I would be worry if they stop bitcoin movement.

[joesmoe2012]

Similar to what happened on bit floor as it became illiquid.

[arbitrage001]

http://www.reddit.com/r/Bitcoin/comments/1hb3vp/new_corporation_filing_in_deleware_usa_mt_gox_inc/


This implies they are complying with the rules of the US.

[Nagle]

I'm puzzled by the big spread between Mt. Gox and the other exchanges. For the last week, Mt. Gox has been running about 5 USD above the other exchanges, even though you can't get USD out of Mt. Gox.  That seems backwards.

Mt. Gox has now used up 9 of their 14 days of their 2-week delay, and we're in the middle of a weekend. If they were actually going to fix the problem, they probably would have announced their new banking relationship by now. Didn't happen. That's a strong indication it won't happen.

The 2 weeks run out on July 3. So we can expect that they'll blame the holiday when they don't resume USD transfers. Then they'll let a few transfers through so that they get some favorable comments, and the fanboys will say everything is now all right. It's worked for Mt. Gox before.

They don't have to totally stop outbound transfers to keep the thing going. They just have to slow them down to the level of inbound transfers. Bernie Madoff made that work for 20 years.

[bshanks]

> I'm puzzled by the big spread between Mt. Gox and the other exchanges. For the last week, Mt. Gox has been running about 5 USD above the other exchanges, even though you can't get USD out of Mt. Gox.

Imo it's because traders can't complete an arbitrage trade to bring the prices back into line.

The abstract idea is that, in order to bring the price of BTC relative to USD down, there must be at least the potential for a flow of trades that exchange BTC for USD, and continue on from there to do other things elsewhere in the economy. This flow is blocked at gox, however, because with USD withdrawals on hiatus, there is nowhere for that USD to go. In the other direction there is no block, because you can withdraw BTC. So, because of the uncompensated USD->BTC flow potential, there is an uncompensated upward pressure on price of BTC at gox.

More concretely, let's say that you are a trader with an account on both Mtgox and on Campbx. On each exchange, let's say your account value is half US dollars and half bitcoin.

Normally if you see the BTC/USD price on gox much higher than campbx, you would exchange BTC for dollars on gox and simultaneously exchange dollars for BTC on campbx. This trade has the effect of bringing the price of BTC/USD down on gox and up on Campbx, thereby reducing the price spread between them.

But after you do this, your account on gox is all in dollars, and your account in campbx is all in BTC. To complete the circle (that is, to return you to your starting point, plus profit), you need to transfer most of your newly acquired dollars from gox to campbx, and transfer most of your newly acquired bitcoin from campbx to gox. After you do that, if the prices are still out of line, you can repeat the arbitrage trade.

If USD withdrawals are on hiatus from gox, you can't complete the circle, and so you can only do this trade once. Assuming there is a fixed population of arbitrageurs on gox each with a fixed amount of money, eventually all of the arbitrageurs will run out of ammo and there won't be anyone still trying to bring the prices back into line in this fashion.

In addition, with USD withdrawals but not BTC withdrawals on hiatus, people who want to withdraw USD from gox immediately are forced to convert it to BTC, withdraw that to another exchange, convert that back to dollars, and withdraw from there. This exerts additional upwards pressure on the BTC/USD price on gox, and additional downwards pressure on the BTC/USD price on other exchanges.

If i were Mtgox, i would consider prioritizing the completion of the LARGEST outgoing wire transfers, in an attempt to bring the prices back into line (and to retain the business of large traders).

If gox gets their act together and starts processing wire transfers promptly, it will be interesting to see if this situation briefly reverses, due to a brief, massive flow of dollars out of gox.

[bshanks]

People reading this thread might be interested to know that Mtgox has just now registered as a money transmitter with U.S. government agency FinCen (thanks Nagle for noticing that).

Since one possibility is that the difficulty with USD withdrawals is due to Mtgox not being properly registered in the U.S., it seems to me that this increases the chances that Gox will successfully fix the problem with the wires (and possibly someday even add back Dwolla).

[Cyberdyne]

I'm puzzled by the big spread between Mt. Gox and the other exchanges. For the last week, Mt. Gox has been running about 5 USD above the other exchanges, even though you can't get USD out of Mt. Gox.  That seems backwards.

Doesn't seem backwards to me. If the only way you can withdraw from Mt Gox is via bitcoins, then it makes total sense that it would drive the price of bitcoins up (higher than they would be otherwise).

[prophetx]

The spread with gox has always existed, this is not a new phenomenon.   

[gabbynot]

In the second statement, they say USDs withdraws are not suspended, but that they are being processed slowly.

Have there been any confirmations of USD withdrawals in the last week?

Anyone?

[Pangia]

http://www.pcworld.com/article/2043360/bitcoin-exchange-files-with-us-treasury-regulatory-agency.html


Jeremy Kirk, IDG News Service
Jul 1, 2013 5:57 AMprint
The largest Bitcoin exchange has filed key paperwork with the US Treasury's anti-money laundering agency, but it may have come too late.

Mt. Gox, based in Tokyo, registered on Thursday with the Financial Crimes Enforcement Network (FinCEN) as a money services business (MSB), according to FinCEN's website.

The adoption of Bitcoin, a virtual currency that can be transferred worldwide for free using peer-to-peer software, has been stymied by concerns over compliance with different countries' anti-money laundering and financial regulations.

Mt. Gox's registration comes just six weeks after one of its U.S. bank accounts was seized. The order alleged Mt. Gox failed to register as a money transmitting business, which is required by many states and the federal government.

The account was linked to Dwolla, a payments provider, and used by Mt. Gox to transmit funds to its exchange in Japan used to buy and sell bitcoins. Dwolla was not a target of order, issued on May 14 by the U.S. District Court in Maryland and didn't have any funds seized.


One of FinCEN's missions is to combat money laundering. Bitcoin's semi-anonymous transaction system has led to concerns that it could be used to hide money and avoid taxes.

Mt. Gox's registration may have come too late. According to FinCEN's website, those running money services businesses are required to register with the agency within 180 days of when the business was established. Businesses must renew their registration every two years.

The seizure order from the federal court stated that Mt. Gox has used its U.S. account to distribute funds to Dwolla since at least December 2011.

Mt. Gox officials could not be immediately reached for comment. On June 21, the exchange stopped U.S. dollar international wire transfers. The exchange said the halt was due to its bank, which was struggling to cope with the volume of transfers over the last two months. Mt. Gox said it planned to resume transfers within a couple of weeks.

The decentralized nature of the Bitcoin system, managed by a small community of software developers, poses interesting issues for government regulators in how to apply laws and regulation, wrote Ed Felten, a professor of computer science and public affairs at Princeton University.

"The people who govern Bitcoin are an obvious point of leverage for regulators," Felten wrote. "In principle, a regulator might try to compel the developers who govern the Bitcoin software to deploy certain rule changes, by compelling them to push software changes that implement the modified rules."

Bitcoin will likely prove "to be more regulable than its initial advocates thought," Felten wrote. The transition could be awkward due to Bitcoin's complexity.

"Also like the Internet, Bitcoin will flummox some of the less savvy people in government, leading to some series-of-tubes moments," he wrote.

[Pangia]

Now what happens if their registration is denied?

Also, in their June 20th, 2013 statement regarding the 2 week USD hiatus they stated the following:

Please be reassured that USD deposits and transfers to Mt. Gox will remain unaffected, as will deposits and withdrawals in other currencies, and we will be resuming USD withdrawals once the process is completed.

Unfortunately however, we're seeing that withdrawal requests for other currencies (specifically Euro for me) are going unanswered by Gox. All that I've had on my request is "confirmed" and nothing has been happening for the past 8 days. When Gox processes your request it should say "processed", but that's not happening.

I'm a bit concerned that Gox may be doing a Bernie Madoff on us.

I don't think that we'll see any positive improvements in terms of withdrawals come the 2 week deadline. Instead we'll see more excuses and then the fun will start regarding BTC price.

[biggie]

http://www.pcworld.com/article/2043360/bitcoin-exchange-files-with-us-treasury-regulatory-agency.html


Jeremy Kirk, IDG News Service
Jul 1, 2013 5:57 AMprint
The largest Bitcoin exchange has filed key paperwork with the US Treasury's anti-money laundering agency, but it may have come too late.

Mt. Gox, based in Tokyo, registered on Thursday with the Financial Crimes Enforcement Network (FinCEN) as a money services business (MSB), according to FinCEN's website.

The adoption of Bitcoin, a virtual currency that can be transferred worldwide for free using peer-to-peer software, has been stymied by concerns over compliance with different countries' anti-money laundering and financial regulations.

Mt. Gox's registration comes just six weeks after one of its U.S. bank accounts was seized. The order alleged Mt. Gox failed to register as a money transmitting business, which is required by many states and the federal government.

The account was linked to Dwolla, a payments provider, and used by Mt. Gox to transmit funds to its exchange in Japan used to buy and sell bitcoins. Dwolla was not a target of order, issued on May 14 by the U.S. District Court in Maryland and didn't have any funds seized.


One of FinCEN's missions is to combat money laundering. Bitcoin's semi-anonymous transaction system has led to concerns that it could be used to hide money and avoid taxes.

Mt. Gox's registration may have come too late. According to FinCEN's website, those running money services businesses are required to register with the agency within 180 days of when the business was established. Businesses must renew their registration every two years.

The seizure order from the federal court stated that Mt. Gox has used its U.S. account to distribute funds to Dwolla since at least December 2011.

Mt. Gox officials could not be immediately reached for comment. On June 21, the exchange stopped U.S. dollar international wire transfers. The exchange said the halt was due to its bank, which was struggling to cope with the volume of transfers over the last two months. Mt. Gox said it planned to resume transfers within a couple of weeks.

The decentralized nature of the Bitcoin system, managed by a small community of software developers, poses interesting issues for government regulators in how to apply laws and regulation, wrote Ed Felten, a professor of computer science and public affairs at Princeton University.

"The people who govern Bitcoin are an obvious point of leverage for regulators," Felten wrote. "In principle, a regulator might try to compel the developers who govern the Bitcoin software to deploy certain rule changes, by compelling them to push software changes that implement the modified rules."

Bitcoin will likely prove "to be more regulable than its initial advocates thought," Felten wrote. The transition could be awkward due to Bitcoin's complexity.

"Also like the Internet, Bitcoin will flummox some of the less savvy people in government, leading to some series-of-tubes moments," he wrote.

This part is very interesting:


The decentralized nature of the Bitcoin system, managed by a small community of software developers, poses interesting issues for government regulators in how to apply laws and regulation, wrote Ed Felten, a professor of computer science and public affairs at Princeton University.

"The people who govern Bitcoin are an obvious point of leverage for regulators," Felten wrote. "In principle, a regulator might try to compel the developers who govern the Bitcoin software to deploy certain rule changes, by compelling them to push software changes that implement the modified rules."

Bitcoin will likely prove "to be more regulable than its initial advocates thought," Felten wrote. The transition could be awkward due to Bitcoin's complexity.

"Also like the Internet, Bitcoin will flummox some of the less savvy people in government, leading to some series-of-tubes moments," he wrote.



And that is why we need a p2p exchange system and/or bitcoin is not needed to be converted to fiat anymore because of worldwide adaption.

[solex]

In the second statement, they say USDs withdraws are not suspended, but that they are being processed slowly.

Have there been any confirmations of USD withdrawals in the last week?

Anyone?

In any currency, not just USD??

[TheBanker]

DO NOT GET EXCITED ABOUT GOX REGISTERING WITH FINCEN!!!

This posting might deserve it's own topic but since I'm also the OP on this post, WTF, I can do whatever I want

I, for one, am NOT feeling any better about Gox since their FinCen announcement. I do enough BTC trading where I'm also in the process of registering as an MSB. You have to understand that there are TWO registrations, one federal and one with the state. So I'm not excited about Gox because (1) FinCen registration is actually quite simple. If you already have a business incorporated and a business bank account, FinCen registration literally takes a few minutes, it's just one form and its very straightforward. Its not even something you would need a lawyer for. You simply need to give FinCen the name of your bank and bank account (for monitoring, I presume) and you have to acknowledge/promise that you have KYC policies in place and that  you will comply with all reporting requirements (CTR, SAR, etc). And thats it, it literally takes less than 30 minutes to fill out. But for Gox, its GREAT publicity, sounds proactive, makes your feel like things are happening . . . but FinCen registration is really not complex.

The hard part REALLY comes in with state registration. (1) because of the young nature of BTC its still unclear whether you need to register in all 50 states or just your primary state. (2) very, very few states have created a policy on MSBs and virtual currencies. So even the state Gox is registered in may ask them to wait for a policy paper BEFORE allowing MSB operations in that state (and thats assuming that they dont need to register in ALL 50 states!). and (3) state registration is where the real fees come in. At that point you will have to post a bond. Depending on the state, this can be into the millions of dollars. You wouldnt have to come up with the entire amount, I'm sure there's bond brokers for that, but its not a small expense if you decide to do a few states - do all 50 and it can cost you quite a bit.

I will only feel better about Gox when they resume USD withdrawals THIS THURSDAY AS PROMISED. Until then, this FinCen registration is nothing but a red herring designed to make you feel better, nothing more.

[biggie]

DO NOT GET EXCITED ABOUT GOX REGISTERING WITH FINCEN!!!

This posting might deserve it's own topic but since I'm also the OP on this post, WTF, I can do whatever I want

I, for one, am NOT feeling any better about Gox since their FinCen announcement. I do enough BTC trading where I'm also in the process of registering as an MSB. You have to understand that there are TWO registrations, one federal and one with the state. So I'm not excited about Gox because (1) FinCen registration is actually quite simple. If you already have a business incorporated and a business bank account, FinCen registration literally takes a few minutes, it's just one form and its very straightforward. Its not even something you would need a lawyer for. You simply need to give FinCen the name of your bank and bank account (for monitoring, I presume) and you have to acknowledge/promise that you have KYC policies in place and that  you will comply with all reporting requirements (CTR, SAR, etc). And thats it, it literally takes less than 30 minutes to fill out. But for Gox, its GREAT publicity, sounds proactive, makes your feel like things are happening . . . but FinCen registration is really not complex.

The hard part REALLY comes in with state registration. (1) because of the young nature of BTC its still unclear whether you need to register in all 50 states or just your primary state. (2) very, very few states have created a policy on MSBs and virtual currencies. So even the state Gox is registered in may ask them to wait for a policy paper BEFORE allowing MSB operations in that state (and thats assuming that they dont need to register in ALL 50 states!). and (3) state registration is where the real fees come in. At that point you will have to post a bond. Depending on the state, this can be into the millions of dollars. You wouldnt have to come up with the entire amount, I'm sure there's bond brokers for that, but its not a small expense if you decide to do a few states - do all 50 and it can cost you quite a bit.

I will only feel better about Gox when they resume USD withdrawals THIS THURSDAY AS PROMISED. Until then, this FinCen registration is nothing but a red herring designed to make you feel better, nothing more.

Gox is probably dealing with authorities. Don't think this has to do with any technical issue. Rather authorities and/or banks. Take for example the Swiss, several of their banks were forced to submit everything they got on U.S citizens or else ... I wouldn't be surprised if they either will announce to stop dealing with people from the land of the "free" or if they continue they will handover all U.S citizen data they have to stay in business as they are now. And remember, it's Japan, best buddy of the U.S ;-)

[prophetx]

DO NOT GET EXCITED ABOUT GOX REGISTERING WITH FINCEN!!!

This posting might deserve it's own topic but since I'm also the OP on this post, WTF, I can do whatever I want

I, for one, am NOT feeling any better about Gox since their FinCen announcement. I do enough BTC trading where I'm also in the process of registering as an MSB. You have to understand that there are TWO registrations, one federal and one with the state. So I'm not excited about Gox because (1) FinCen registration is actually quite simple. If you already have a business incorporated and a business bank account, FinCen registration literally takes a few minutes, it's just one form and its very straightforward. Its not even something you would need a lawyer for. You simply need to give FinCen the name of your bank and bank account (for monitoring, I presume) and you have to acknowledge/promise that you have KYC policies in place and that  you will comply with all reporting requirements (CTR, SAR, etc). And thats it, it literally takes less than 30 minutes to fill out. But for Gox, its GREAT publicity, sounds proactive, makes your feel like things are happening . . . but FinCen registration is really not complex.

The hard part REALLY comes in with state registration. (1) because of the young nature of BTC its still unclear whether you need to register in all 50 states or just your primary state. (2) very, very few states have created a policy on MSBs and virtual currencies. So even the state Gox is registered in may ask them to wait for a policy paper BEFORE allowing MSB operations in that state (and thats assuming that they dont need to register in ALL 50 states!). and (3) state registration is where the real fees come in. At that point you will have to post a bond. Depending on the state, this can be into the millions of dollars. You wouldnt have to come up with the entire amount, I'm sure there's bond brokers for that, but its not a small expense if you decide to do a few states - do all 50 and it can cost you quite a bit.

I will only feel better about Gox when they resume USD withdrawals THIS THURSDAY AS PROMISED. Until then, this FinCen registration is nothing but a red herring designed to make you feel better, nothing more.

You are over analyzing this.  

1st of all bitinstant is already registered in 30+ states as of a May interview from what I recall, so if what you propose is even remotely true how did they accomplish such a feat?

2nd, Gox of all the exchanges is capable enough to handle the fees...

And as far as the 180 day thing goes, the company that is registering is likely a new US corporation owned by the corporate parent,where ever they may be located from, thus there is no 180 day issue...

The regulators ultimately want the compliance info...

stop spreading FUD, well unless you think it might drive the price down so I can get some cheap BTC }:)

[solex]

Mt Gox could register with Delaware, where the frozen account is located. That would be a good start.

[TheBanker]

Mt Gox could register with Delaware, where the frozen account is located. That would be a good start.

I read the gov seizure notice. If memory serves, they are a Delaware corporation (no surprise there) but the account is actually based in Iowa at the same bank (credit union?) that Dwolla uses. So that's at least two registrations *assuming* they don't go after all 50 states.

[TheBanker]

stop spreading FUD, well unless you think it might drive the price down so I can get some cheap BTC }:)

If you really believe that one person posting on a forum is going to drive the price down, then your faith in BTC is even less than mine . . . let that sink in a little 

Relax, I'm merely posting my analysis of the situation.