As was pointed out, currency trading isn't exactly regulated to begin with. So your first point is completely irrelevant.
But why does a lack of regulation scare you? Do you need the government to protect you from the monsters under your bed?
Yep, I agree, I should probably not be that scared, personally. Though I am trying to make a point for those that probably should be exercising a bit fear insofar as their exposure.
Firstly, though, Forex is a bit murkier than equities but it is regulated, insofar as legal compliance, licences, KYC practices, minimal capital requirements, this list goes on. They have rules to follow and Audits to perform, licences to keep valid and
generally bound to the bylaws of some or all of the below:
The NFA – the National Futures Association: self-regulatory organization for the US futures industry. Its purpose is to safeguard market integrity and protect investors by implementing Forex regulations. Membership in NFA is mandatory for any futures or FX broker operating in the US. It is an independent regulatory body with no ties to any specific marketplace.
The CFTC – the Commodity Futures Trading Committee, Created by congress, the Commodity Futures Trading Commission (CFTC) was formed in 1974 as an independent agency with the mandate to issue Forex regulations for financial markets in the United States. The CFTC's regulations assure the economic utility of the markets by encouraging their competitiveness and efficiency, and protecting market participants against and abusive Forex trading practices.
The FSA - The Financial Services Authority, a UK based independent body given statutory powers by the Financial Services and Markets Act 2000. The FSA regulates the financial services industry in the UK, which is made possible by the FSA's regulation making, investigatory and enforcement powers. The FSA is obliged to have regard to the Principles of Good Regulation.
Various National Authorities (Japan should have one), Each country has its own national body for regulating its financial service industry. These are the bodies that decide on Forex regulations; you must therefore make sure that your broker is licensed in the country from which they operate. This ensures that they are obliged to operate in accordance to that country's trading regulations.
BUT THIS IS NOT WHAT SHOULD SCARE. You are right, politicians, bla bla, the government IS out to fuck us all up in the long run. i am not debating this at all, I am with you on that. BUT..
I have been following the legal cases of these brokerages(exchangers) that have recently been shut down. It seems the United States has a methodology to who gets busted next.
From what I can assertain, the country you are in matters. Mainly because it takes time to build a
prima facia case against an operator. Then of course they have to present it to a judge. So, if the country is small, easy to convince a judge, if it's the likes of Japan probably going to need more evidence and more effort building a case before the country engages.
Second factor. Level of Regulation. Those Operators(exchangors) that have less regulatory alliances are much more vulnurable, as it is easy to build a case against bad practice. i.e. operators that allow old timers to trade with their retirements, operators that facilitating money laundering practises by not subjecting clients to the BIC(SWIFT)/FINTRAC Anti Money Laundering System. Of which bitcoin is not a part of. sure sure, mtgox wants ID now (that they got a visit from the relevant authorities)
Third Factor, notional taxational loss and volume. The Bigger the fish, the better the funding to prosecute.
I am pretty sure, at the end of the calendar year these exchanger are not proving, the respective governments with each users tax liabilty calculations. As do Forex/Commoditiy brokers etc. It may seem like a lot of fun that BTC is anonymous(ish) and not traced, but all transactions, be it trading or buy goods and services are actually taxable. Don't get me started on this subject, you know something ain't right here and you don't need me pointing out what it is. But I kid you not, the US/UK/JAPAN all want their tax revenues, and the bigger Bitcoin gets, the bigger the tax liability and thus the tax evasion.
So, i would be scared shitless, because ONE LITTLE DISRUPTION and an exchanger goes down, whether or not evidence was compiled to attach criminal liability to the directors of the particular exchange.
When an exchanger goes down, you are going to have a little trouble wiring the BTC back to your home bank account. Unless of course you got good warning that something was going down.
This really is a case of the Emperors Clothes. The US can't just send the military and shut this all down, they have to go through legal and diplomatic channels, and this takes time. So its first come first serve.
Remember one thing. The creator did realise he wanted to remain anonymous for a reason. i think maybe he saw the potential legal liability if BTC would actually take off.
And the reality is, nobody gives a crap if you sell some dope online. But when BTC started getting really expensive, it put itself in the limelite and all the NON TAX PAYING activities
So should you be worried? All I can say, is that I WOULDN'T be entrusting my BTC to ANY WALLET that is not in your control. Cuz you might wake up one morning to find everything blocked and gone or worse!
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