I'm From The Government And I'm Here To Help You!: New York To Control Bitcoin

[Beliathon]

It sounds more like they are "controlling" centralized fiat exchanges instead of Bitcoin, but don't let that stop a sensationalist title.

Sorry, Charlie, we accept only the finest tuna and your post is not it!

New York regulations would cover all exchanges, no matter where they are located because if the exchanges wanted to do any business at all in New York, including sending or receiveing fiat or crypto, the exchanges would have to conform to New York law.

My $.02.

Again, you are still talking about centralized fiat exchanges, not Bitcoin.

"The lack of any regulatory control or oversight of Bitcoins has triggered concerns on various fronts."

I may be misunderstanding that sentence from the article, so perhaps you could better explain to me just what it means.

My $.02.

It means they are concerned. That's a far cry from "NewYork to control Bitcoin".

They are probably concerned because they realize that they can't control it, so they will go after what they can control, centralized fiat exchanges.

http://www.youtube.com/watch?v=b3_lVSrPB6w

New York has no power over anything. Cannabis is illegal here in New York City, but guess what I'm smoking as I type this? They can pass all the laws they want, good luck enforcing them.

Cryptocurrency in the near future will begin moving away from centralized exchanges anyway, as they are a weakness.

[TheFootMan]

New York has no power over anything. Cannabis is illegal here in New York City, but guess what I'm smoking as I type this? They can pass all the laws they want, good luck enforcing them.

You're right in that as long as you're not caught - any law does in fact not have any effect. But there are people being caught doing exactly what you do, so the law do have a consequence for somebody somewhere. It's nice and dandy to ignore the law, but there are enforcement of it, although this is quite arbitrarily.

[repentance]

People can always trade person to person, localbitcoins, etc. so they can regulate exchanges all they want. They regulate it too much and people will start trading person to person.

Trading person to person isn't going to protect you if the authorities suspect you're doing something wrong.

http://www.virtualcurrencyreport.com/2014/02/two-florida-users-of-localbitcoins-com-arrested-for-money-laundering-and-unlicensed-money-transmission/

These arrests illustrate that under some state money transmitter laws, the direct sale of bitcoin can constitute money transmission—and that selling bitcoin without a money transmitter license can result in criminal charges.

[Beliathon]

People can always trade person to person, localbitcoins, etc. so they can regulate exchanges all they want. They regulate it too much and people will start trading person to person.

Trading person to person isn't going to protect you if the authorities suspect you're doing something wrong.

http://www.virtualcurrencyreport.com/2014/02/two-florida-users-of-localbitcoins-com-arrested-for-money-laundering-and-unlicensed-money-transmission/

These arrests illustrate that under some state money transmitter laws, the direct sale of bitcoin can constitute money transmission—and that selling bitcoin without a money transmitter license can result in criminal charges.

Uhh, yes it does protect you. If you trade using localbitcoin and cash, it is anonymous and therefore you are protected 100%.

"unenforceable law", just like copyright law.

[repentance]

People can always trade person to person, localbitcoins, etc. so they can regulate exchanges all they want. They regulate it too much and people will start trading person to person.

Trading person to person isn't going to protect you if the authorities suspect you're doing something wrong.

http://www.virtualcurrencyreport.com/2014/02/two-florida-users-of-localbitcoins-com-arrested-for-money-laundering-and-unlicensed-money-transmission/

These arrests illustrate that under some state money transmitter laws, the direct sale of bitcoin can constitute money transmission—and that selling bitcoin without a money transmitter license can result in criminal charges.

Uhh, yes it does protect you. If you trade using localbitcoin and cash, it is anonymous and therefore you are protected 100%.

"unenforceable law", just like copyright law.

They're already targeting high volume sellers on localbitcoins (just as high volume e-Bay sellers and high volume PayPal users have been targeted in the past).  It's not "anonymous" if you're meeting someone to sell them BTC for cash and that person has the authority to charge you with being an unlicensed money transmitter on the basis of a single transaction (and localbitcoins sales at a distance have been fraught with scams and fraud).

Everyone needs to stop thinking that there's some perfect solution which will last forever.  Regardless of what methods you try to use to stay under the radar, the authorities will eventually catch on to them and target them (just as they do with people trying to hide conventional financial transactions or game the system).  localbitcoins ads themselves are a trail (just like SR ads are a trail).

[p2pbucks]

btc can't be controlled 

My 1000bucks

[LostDutchman]

btc can't be controlled  

My 1000bucks

Watch'em try!

They'll fuck it up for a lot of people.

My $.02.

[subSTRATA]

"I'm From The Government And I'm Here To Help You!"  

[LostDutchman]

"I'm From The Government And I'm Here To Help You!" 

They just don't get it, do they?

My $.02.

[subSTRATA]

btc can't be controlled  

My 1000bucks

Watch'em try!

They'll fuck it up for a lot of people.

My $.02.

They can affect price negatively which is fine for me, drop it to 10 USD so I can buy a thousand more BTC! Other than that ... see BitTorrent.  

They're already targeting high volume sellers on localbitcoins (just as high volume e-Bay sellers and high volume PayPal users have been targeted in the past).  It's not "anonymous" if you're meeting someone to sell them BTC for cash and that person has the authority to charge you with being an unlicensed money transmitter on the basis of a single transaction (and localbitcoins sales at a distance have been fraught with scams and fraud).

One gotta be really dumb to deal with Bitcoin and reveal his or her identity to total strangers. Need fiat? Work for it, don't exchange BTC for it, tard!

[cgriswold]

Control is moving forward; Please read this note from Vault of Satoshi:

Mar 06/2014 21:12 - Important announcement for US customers
It is with great regret to inform you that we will be ceasing our US operations effective today. If you reside outside the United States this does not affect you.

We’ve made this decision not because of any specific legal challenge or threat, but because we feel the regulatory environment in the US is becoming increasingly hostile toward Bitcoin, and more specifically toward exchanges trading in digital currencies. We’re heeding the warnings of Bitcoin Foundation and BitInstant founder, Charlie Shrem, who recently conducted a troubling interview with “Let’s Talk Bitcoin.” If you want to hear more about the situation exchanges face operating in the US, we recommend you listen to episode 87 of “Let’s Talk Bitcoin” here: http://letstalkbitcoin.com/e87-the-captive-and-the-mountain

We’ve made repeated attempts to comply with FinCEN regulations, but their online form submission process will not allow us to post reports from our headquarters in Ontario, Canada. They refuse to accept printed paper reports, and their drop-downs don’t include Canadian options, making it impossible to the file the required documentation properly in order to comply. Despite repeated inquiries into how to properly file reports from Canada, we have yet to receive a satisfactory response. They’ve literally made it impossible for us to run our business in compliance with their regulations.

This was best option for me to purchase btc.  I assume other sites will most likely follow this with similar actions.

[Beliathon]

It's not "anonymous" if you're meeting someone to sell them BTC for cash and that person has the authority to charge you with being an unlicensed money transmitter on the basis of a single transaction

Which is exactly why localbitcoins has a feedback score system, just like eBay. Only do business with trusted members. Problem solved.

and localbitcoins sales at a distance have been fraught with scams and fraud

See above.

Regardless of what methods you try to use to stay under the radar, the authorities will eventually catch on to them and target them

Yeah, that strategy sure worked out great in the war on drugs. Sure worked out great in the war on piracy, too.



I'm not saying dipshit terrified governments aren't going to use every evil tool in their evil toolbox to try and stop this financial revolution from happening.

I'm just saying they're going to lose.

http://www.youtube.com/watch?v=kIbEj1CIpuU

[Bit_Happy]

This was bound to happen anyway.

[jubalix]

the more I think about because of the nature of BTC / Crypto's, I think the harder a govt tries to regulate they will only force evolution faster and drive price up....

the nature of BTC is that it can't be manipulated at the whim of a single entity, and even if it could a crytpo that is more robust will arise.

Its hard to think of an endgame where cryptos don't take 99~100% over from fiat.

[IrishFutbol]

the more I think about because of the nature of BTC / Crypto's, I think the harder a govt tries to regulate they will only force evolution faster and drive price up....

the nature of BTC is that it can't be manipulated at the whim of a single entity, and even if it could a crytpo that is more robust will arise.

Its hard to think of an endgame where cryptos don't take 99~100% over from fiat.

1. Why can't BTC be manipulated?  The Fed manipulates the dollar by either selling bonds (and pulling dollars out of the system), or by buying bonds (and putting dollars into the system).  What's to stop the major governments from buying and selling BTC to affect the supply/demand, and therefore, the price?

2. Actually it's very simple to think of a world like that.  A currency that can't be manipulated isn't a great thing for large economies.  Like them or not, we would be in a great depression right now had the major central banks of the world not done what they did back in 2007/2008.  Read up on economies in the 1800s.  Many people, especially farmers, we're utterly devastated by unstable currency prices.  And a great depression in today's world would be far far worse than the 1930s.

[yelloyello]

I think its good news. NYC cannot control the btc protocol, but it should be a good thing to have controlled exchanges.
So people have a choice. Trade person to person or trade by a controlled exchange. Especially when you want to trade a big amount of btc to buy a house or a nice speedboat or so. Its safer to do that at a kind of post office, secured and controlled.

Other good point: at least NYC accept the btc as a currency. That's good.

[Beliathon]

Its hard to think of an endgame where cryptos don't take 99~100% over from fiat.

Without revealing too much about my personal identity, I will tell you that I am extremely well-versed in game theory and mathematically "gifted".

There is no possible endgame that involves the survival of fiat. It's already dead, the world just hasn't realized it yet.

We need automated governments, where people can voluntary subscribe.

You're looking at 15-20 years on the outside.

[TheFootMan]

I think its good news. NYC cannot control the btc protocol, but it should be a good thing to have controlled exchanges.
So people have a choice. Trade person to person or trade by a controlled exchange. Especially when you want to trade a big amount of btc to buy a house or a nice speedboat or so. Its safer to do that at a kind of post office, secured and controlled.

Other good point: at least NYC accept the btc as a currency. That's good.

Regulated exchanges. How would it be a good thing?

Would fiat deposits be insured or guaranteed, would btc deposits be the same? What when it eventually came to a breach, and the insurer/state would have to cough up the money, would they follow through, or would an insurance company/state fight like hell in court not to pay out. I guess we will not see until it does happen.

What about current collapses in New York in the existing financial industry, has customers been made whole, or have they been left alone to rot? If the latter, what guarantees will we have that anything will be different with bitcoin?

What about identity theft, what can prevent a single employee from coping identity data, and misusing or selling it ?

Interesting times ahead.

[amspir]

Regulated exchanges. How would it be a good thing?

If past history is an indicator of future history, the implication is that US exchanges would be socialized.   Right or wrong, the US government socialized the losses of the US financial system in 2008,  and if bitcoin is a significant part of the economy, then the losses from a failed bitcoin exchange would be distributed to US taxpayers.  Right or wrong, an exchange with this kind of insurance would increase consumer confidence.

[IrishFutbol]

I think its good news. NYC cannot control the btc protocol, but it should be a good thing to have controlled exchanges.
So people have a choice. Trade person to person or trade by a controlled exchange. Especially when you want to trade a big amount of btc to buy a house or a nice speedboat or so. Its safer to do that at a kind of post office, secured and controlled.

Other good point: at least NYC accept the btc as a currency. That's good.

It could be good, but there's three big points you're missing. 

The first is the users of BTC.  As of now, it's pretty much 3 groups:
1. Libertarians / people who want a non-government currency.  To them, this could be a downside.  They'll see BTC flowing through US regulated exchanges as a down side, and many will simply go back to dollars, as they'll take the convenient system vs. the inconvenient system if both are regulated.  Not to mention that regulation = people will pay taxes on earnings.
2. People trying to get rich.  To them, it will initially be a good side, as the chance of a Mt. Gox will drastically decrease.  However, taxation may keep some people out of the regulated exchanges.
3. People using BTC for illegal purposes.  These people will likely be forced to continue to use 3rd party exchanges that are not protected.
Basically, 2 of the 3 groups of users (though, likely the two smaller groups), will not be pleased by this.

The second issue is that there will still be a need for non-regulated markets.  Many BTC users are not going to go through regulated exchanges, so there will necessarily be the need for unregulated exchanges.  However, as normal BTC users will prefer to trade on regulated exchanges, there will be a price gap between the two exchanges (with the non-regulated exchanges buying and selling below the ask/bid of the regulated exchanges).  This will cause one of the two to happen:
1. There will be plenty of investors willing to take on arbitrage risk between the two exchanges (i.e. buying lower at an unregulated exchange and selling higher on the regulated one), and the price difference between the exchanges will be small or non-existent.  The risk with this is that the government may get involved if it sees that criminal elements (Silk Road, tax evaders, other criminal groups/sanctioned nations looking to transfer money) can easily dispose of BTC.  Basically, they'll act to prohibit the transfer of BTC from the two exchanges, and potentially will start freezing assets of anyone who deals with the non-regulated exchange.
2. Investors will be afraid of the risk, and will not buy from non-regulated exchanges.  If this happens, then the sole markets where BTC is more effective than cash/credit will move away from BTC.

The last issue is a combination of the above two.  If you run out the people who actually want/need to use BTC as a currency, you're essentially left with just speculators...which would make BTC a very dangerous investment.