U.S. Authorities Seize Accounts of Major Bitcoin Operator

CommanderFrank

CommanderFrank

Cat Can't Scratch It
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Two accounts associated with the Bitcoin exchange, Mt. Gox, have been seized by US authorities for violations of federal law as an unlicensed money transmitter. What effect the two seizures will have on the Bitcoin market is still uncertain at this point.

Treasury's anti-money laundering unit, the Financial Crimes Enforcement Network (FinCEN), in March issued guidance that dubbed digital currency exchanges money transmitters, a finding that obliged such businesses to register with FinCEN and obtain any mandated state licenses.
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It doesn't have to be a threat to enforce existing laws if they were breaking them.

Anyone who pretends that a (fake) commodity that fluctuates so wildly in perceived value (value that is only perceived by a small fraction of the population by the way) can actually function as a currency is delusional. Frankly, it's a big pyramid scheme and was from the beginning. Get in early, get a disproportionately large share of the pie, and eventually cash it in for *real* money.
 
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Glad I never kept any actual money in MtGox or Dwolla -- anytime I cashed out a chunk of bitcoins they dollars were instantly sent to Dwolla and then Instantly sent to my bank account.

For a completely new idea of a distributed crytographic currency -- Bitcoin is doing pretty good. The argument that the fluctuations won't make it a "real" currency are invalid. We have seen multiple times in history "real" currencies of real countries go into almost overnight hyper inflation and become worthless.

Fact is people are exchanging bitcoins for goods and services - it's just like any other market, be it dollars, fish, gold, or hookers. The value fluctuates every day there is no getting around it.

I haven't invested a single penny of "real" money into bitcoin/litecoin and I've profited a good 1500 dollars so far. This was coming late into the game too. All with two 7970's that were already bought for gaming purposes.

I'd view this as a setback because either 1) the guy setting up the business and the accounts was just stupid or lazy or 2) he really was trying to be sneaky and thought he wouldn't get caught.

Either way -- if GOX got shut down or hit hard, there are other exchanges that would pop up and hopefully learn from Gox's mistakes.

Personally I don't mine bitcoins anymore because honestly what's two 7970's going to do with difficulty at record levels. I mine litecoins as they are (for now) more profitable in terms of time and energy. Sad thing? I remember my two cards could mine 2000 LTC per month before the price took off, I didn't mine them at the time because I wanted to milk BTC before any ASIC's started hitting the scene. If I'd only known, I could have had an extra beefy down payment on a house with the addition of an extra 20K+ of profit after the price shot up.
 
ferzerp said:
It doesn't have to be a threat to enforce existing laws if they were breaking them.

Anyone who pretends that a (fake) commodity that fluctuates so wildly in perceived value (value that is only perceived by a small fraction of the population by the way) can actually function as a currency is delusional. Frankly, it's a big pyramid scheme and was from the beginning. Get in early, get a disproportionately large share of the pie, and eventually cash it in for *real* money.
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real money...you funny.
 
ferzerp said:
It doesn't have to be a threat to enforce existing laws if they were breaking them.

Anyone who pretends that a (fake) commodity that fluctuates so wildly in perceived value (value that is only perceived by a small fraction of the population by the way) can actually function as a currency is delusional. Frankly, it's a big pyramid scheme and was from the beginning. Get in early, get a disproportionately large share of the pie, and eventually cash it in for *real* money.
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AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!! "REAL MONEY" he says!!!!!!!!!!!!!!!!!!!!!!!!!

You know nothing of our "real" money. Bitcoin is backed by the same thing as our "real" money- NOTHING. ABSOLUTELY NOTHING.

Watch this entertaining and yet educational video before calling our money "real" - http://www.youtube.com/watch?v=tGk5ioEXlIM
 
I know exactly what I am calling real money is backed with. It is backed with relatively stable confidence, with a tiny, tiny fraction of its users being speculators.

This fake money is the exact opposite, with the only people who have any confidence in it being the speculators trading.

However, keep on with your deluded dreams I suppose.
 
first they ignore you

then they laugh at you

then they arrest you

then you win
 
ferzerp said:
I know exactly what I am calling real money is backed with. It is backed with relatively stable confidence, with a tiny, tiny fraction of its users being speculators.

This fake money is the exact opposite, with the only people who have any confidence in it being the speculators trading.

However, keep on with your deluded dreams I suppose.
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No $.00

Backed by relatively stable confidence? This fake money is the exact opposite? Yes, deluded dreams!
Damn, learn economics.
 
Serpent said:
So.... it's finally becoming a threat.
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BTC is not a threat to USD.

BTC Markets operating in the United States are subject to the same regulations at other cash exchange markets.
Mt. Gox is clearly an unstable exchange at this point. They need to meet the same reserve requirements as other exchanges operating in the US.
 
I think they are thinking it's a threat. That makes it more "real" as well, imo. And an attack on it will push more people to it I suspect.

That said, it's backed up by nothing but words of some guy on the internet (afaik, I don't really look into Bitcoin). USD is backed by something, don't delude yourself that it isn't. It's backed by a great number of guns.
 
ferzerp said:
I know exactly what I am calling real money is backed with. It is backed with relatively stable confidence, with a tiny, tiny fraction of its users being speculators.

This fake money is the exact opposite, with the only people who have any confidence in it being the speculators trading.

However, keep on with your deluded dreams I suppose.
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Confidence in any form of "Money" means nothing when the institution that creates it keeps the printing presses running 24/7. You can tie the value of a bitcoin to the value of anything, it's dependent on what the user feels it's worth. Bitcoin's attractive feature is the fact it can't be diluted on a whim by a government, it can't be tracked, controlled, it's a medium with far fewer rules than the dollar. And that right there is worth something.

In the old days we used to be on the gold/silver standard -- if you want to talk about "real" here is your chance. You can't destroy gold or silver... at least not very easily. Tying our paper money to a solid physical medium kept inflation somewhat in check.

With bitcoin -- inflation checks are built into the system itself. In terms of max quantity, generation rate, difficulty, etc etc.

Bitcoin may have its ups and downs - but at least some corrupt group of politicians can't manipulate that system for their own personal gains simply by creating more dollars out of thin air.

Want to talk stable currency? Look at the hell that broke loose after the gold standard was officially eliminated. Inflation of this magnitude and this level are NOT good, people just seem to shrug and accept that prices will always go up and think everything will be fine forever. When your kids are paying $50 dollars for a bottle of water and $2000 dollars to fill up their car... they will say the same thing "meh that's just normal" as they go to work for minimum wage job that pays $800/hour

What do I know though -- I only have a degree in Economcs from A&M.

InflationHistory1800-2003.gif
 
collegeboy69us said:
Confidence in any form of "Money" means nothing when the institution that creates it keeps the printing presses running 24/7.

(snip)

What do I know though -- I only have a degree in Economcs from A&M.

InflationHistory1800-2003.gif
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Clearly, nothing! /sarcasm. Good post.
 
colinstu said:
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This.

plus

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collegeboy69us: how many depressions have we had since we went off the gold standard, compared to before? How many times did the US go *off* the gold standard in times of war? Pretty easy questions for an econ major. ;)

I need to get one more in for Domo's post:
Bvtrsq9.gif
 
collegeboy69us said:
Confidence in any form of "Money" means nothing when the institution that creates it keeps the printing presses running 24/7. You can tie the value of a bitcoin to the value of anything, it's dependent on what the user feels it's worth. Bitcoin's attractive feature is the fact it can't be diluted on a whim by a government, it can't be tracked, controlled, it's a medium with far fewer rules than the dollar. And that right there is worth something.
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Inflation isn't a result of the number of hours a printing operation runs daily. It's a symptom of other economic problems that are larger than just the government responsible for administration of the money. By stating that, you're boiling down a large number of complex interactions into a single factor so you can point an accusing finger at something that "everyone" is scared of (government) in order to boost an argument in favor of bitcoins.

In the old days we used to be on the gold/silver standard -- if you want to talk about "real" here is your chance. You can't destroy gold or silver... at least not very easily. Tying our paper money to a solid physical medium kept inflation somewhat in check.

With bitcoin -- inflation checks are built into the system itself. In terms of max quantity, generation rate, difficulty, etc etc.
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I'm pretty sure that mining for precious metals is a lot more labor and energy intensive than running encryption operations on a processor. After all, money isn't representative of the thing backing it, but a measure of a unit of labor, energy, or effort. Inflation exists...so what? That just means that a unit of effort is represented by a higer numeric value of currency. It doesn't change the amount of effort or energy required. Bitcoins, on the other hand, do change the amount of effort and are a fairly flawed way of approching currency.

Bitcoin may have its ups and downs - but at least some corrupt group of politicians can't manipulate that system for their own personal gains simply by creating more dollars out of thin air.
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But the system can still be manipulated to someone's advantage and someone else's disadvantage. Just because it's not a politician doing it, it suddenly becomes socially acceptable?

Want to talk stable currency? Look at the hell that broke loose after the gold standard was officially eliminated. Inflation of this magnitude and this level are NOT good, people just seem to shrug and accept that prices will always go up and think everything will be fine forever. When your kids are paying $50 dollars for a bottle of water and $2000 dollars to fill up their car... they will say the same thing "meh that's just normal" as they go to work for minimum wage job that pays $800/hour
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They'll also be earning a salary or wage with a higher number of dollars to compensate for the cost of goods or services so it won't matter aside from during temporary imbalances that are self-correcting in the system. If your bottle of water costs $50 then you'll find its impossible to pay $8 an hour for someone to exist. The system will cope with it and compensate. Getting wrapped up in a numeric amount is short-sighted.

What do I know though -- I only have a degree in Economcs from A&M.
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Since you don't seem to understand currency or inflation, I'm not sure answering your question honestly would be a very nice thing to do. :D
 
I have a feeling this is going ot back fire on DHS. Reason: they changed the regulations to state that digital currency exchanges must register, however they have also stated that bitcoin is not legal currency.

What this means, is they will have to go after every gaming site that uses digital ingame currency, that can be purchases. They are exchanging US dollers for in game currency.. Blizzard comes to mind for Diablo III. they have real currency auction houses, etc. I doublt Blizzard is registered as a money transmitter.

If you also look at the "probable cause" part of the court order, they describe what nearly every adult does in the United states when it comes to paying bills, recieving money into their bank account, selling 1 item on Ebay, etc.

What could very well could happen is the US will have to declare bitcoin legal currency before this can be enforced. On one hand they say bitcoin is not legal currency, meaning in the government's eyes, it is worthless.

As the new regulations state, if you mine bitcoin/litecoin or any other digital currency, the minute you exchange those coins for US currency you are supposed to register with FinCen as a money transmitter.


to be honest, the money transmitter is Dwolla, just as paypal is to ebay. if that is not the case, that means every Paypal user (me, you, etc) are money transmitters because we use paypal to transfer money from our accounts to other companies, people's, etc accounts...

I guess what I am trying say is MT. Gox is not doing anything different then nearly eveyr business/private citizen does on a daily basis, and they are not required to be registered as money transmitters...
 
CreepyUncleGoogle said:
Since you don't seem to understand currency or inflation, I'm not sure answering your question honestly would be a very nice thing to do. :D
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[sarcasm]But a "currency" designed to deflate is wonderful![/sarcasm]

Not really a glowing advertisement for that particular educational institution, huh?
 
What the feds have done is commit armed robbery.

The US government realizes that things like BitCoin are a threat to the funny money fiat currency known as the US dollar and therefore will use whatever force and violence is necessary in order to eliminate the competition. If people start using alternative currencies, they will no longer be able to simply print more money to finance large corporations and overseas empire building. The thugs did the same thing with Liberty dollars.
 
damicatz said:
What the feds have done is commit armed robbery.

The US government realizes that things like BitCoin are a threat to the funny money fiat currency known as the US dollar and therefore will use whatever force and violence is necessary in order to eliminate the competition. If people start using alternative currencies, they will no longer be able to simply print more money to finance large corporations and overseas empire building. The thugs did the same thing with Liberty dollars.
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Not this again!

So if this currency is so valueless and "funny" as you put it, how to you obtain goods and services? What do you earn at work for your effort? If you use USD, obviously you value it as much as everyone else even though you like to rant about how it's worthless and awful. Hypocrisy in the extreme...you're demonstrating it.
 
If you use USD, obviously you value it as much as everyone else even though you like to rant about how it's worthless and awful.
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You act as if I have a choice. Anyone that attempts to use a competing currency finds themselves shut down by the feds. The US government uses force to ensure that everyone has no choice but to use the USD. For example, they have shut down people before for paying their employees in gold. They shut down the Liberty dollar. And now, they are going after BitCoin.

A dollar is nothing but a piece of paper. It is not backed by anything rare, valuable or tangible; rather, the scarcity is artificially controlled by manipulating the printing presses that print the bills. If people were free to use their own currencies, the dollar would become meaningless.
 
CreepyUncleGoogle said:
Not this again!

So if this currency is so valueless and "funny" as you put it, how to you obtain goods and services? What do you earn at work for your effort? If you use USD, obviously you value it as much as everyone else even though you like to rant about how it's worthless and awful. Hypocrisy in the extreme...you're demonstrating it.
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That right there is just the problem with this whole thing... we the people of the world have declared bitcoin valuable since you can use it to purchase goods and services along with trade it, but the US government has declared it not legal currency, meaing it has no value, and that is where they are going to have to either back away, or declare bitcoin legal tender. When they finally do declare it legal currency, they will then have the means to collect sales tax, etc on merchants that accept it.

In the end, this is all going to make bitcoin legal currency, and accepted in more place, and bring the value up in time.
 
damicatz said:
You act as if I have a choice. Anyone that attempts to use a competing currency finds themselves shut down by the feds. The US government uses force to ensure that everyone has no choice but to use the USD. For example, they have shut down people before for paying their employees in gold. They shut down the Liberty dollar. And now, they are going after BitCoin.

A dollar is nothing but a piece of paper. It is not backed by anything rare, valuable or tangible; rather, the scarcity is artificially controlled by manipulating the printing presses that print the bills. If people were free to use their own currencies, the dollar would become meaningless.
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So you use and value US currency just like the rest of us. ^^ Its okay to despise it, but at least recognize that even you, someone who doesn't like the idea of having a standardized means of exchange (and who might prefer, I dunno, using scales to compare metal weights to add complexity to the purchase of a good or service) assigns it a level of value.

As for having a choice, of course you do. You can move somewhere else and use a different form or currency or you can start trading and bartering for everything you need. Didn't some kid start trading a watch on Craigslist and ended up with a car recently? There's your ticket out of the oppression of having a standard monetary system! Blue team go!
 
CreepyUncleGoogle said:
Not this again!
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smh...

So if this currency is so valueless and "funny" as you put it, how to you obtain goods and services?
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If you trade in enough bottles and cans you can also obtain good and services however to most of us.. it's for most purposes not worth it (worthless). Simple devaluation and if you're arguing the American dollar is not being devalued then crazy! The paper currency isn't necessarily the problem, it's the fact that very few control it and by doing so take away from everyone else using it (the dollar). This is the EXACT reason why country after country have cried and cried for a new reserve currency. The US is using it the fact they control the reserve currency to fuck with the world and they back it up with the US military (by force).

What do you earn at work for your effort?
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Ummm, what the GOV allows me to earn.

If you use USD, obviously you value it as much as everyone else even though you like to rant about how it's worthless and awful.
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What? Are you crazy? What can I ask my boss to pay me in? Exactly.

Hypocrisy in the extreme...you're demonstrating it.
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So is crazy.
As for having a choice, of course you do. You can move somewhere else and use a different form or currency or you can start trading and bartering for everything you need.
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Wow, yup, crazy! I should have to move out of the country I was born in to get a fair deal (not get robbed by inflation). FFS.
 
NWRMidnight said:
That right there is just the problem with this whole thing... we the people of the world have declared bitcoin valuable since you can use it to purchase goods and services along with trade it, but the US government has declared it not legal currency, meaing it has no value, and that is where they are going to have to either back away, or declare bitcoin legal tender. When they finally do declare it legal currency, they will then have the means to collect sales tax, etc on merchants that accept it.

In the end, this is all going to make bitcoin legal currency, and accepted in more place, and bring the value up in time.
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I'd like to see a globally standardized currency, but I think Bitcoins are a defective way of getting there. It's limited totally to people who are first world elitists that have electrical power, computer technology, and Internet connectivity at their disposal. That isolates huge chunks of the world including most of South America, Africa, the Southern United States, island nations in the Pacific, and northern Canada. Bitcoins are a bad way of going about it.

But you are right. If the US is acting to shut down an exchange in the way they're doing it now, they're dejure (or whatever) recognizing the fact that bitcoins can be used to purchase things which takes them closer to being an accepted currency. I'm not sure what's going to happen with them, but I'd like to see a more universal system that allows the entire world participate instead of cutting off anyone without a PC. :(
 
As for having a choice, of course you do. You can move somewhere else and use a different form or currency or you can start trading and bartering for everything you need. Didn't some kid start trading a watch on Craigslist and ended up with a car recently? There's your ticket out of the oppression of having a standard monetary system! Blue team go!
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It is illegal to pay employees in anything other than US dollars.

Moving somewhere else is not a valid choice because I have every right to be here and to live my life in peace. That is like saying if you don't like the mafia breaking your legs with a baseball bat, you can move somewhere else.
 
MasonD said:
smh...

If you trade in enough bottles and cans you can also obtain good and services however to most of us.. it's for most purposes not worth it (worthless). Simple devaluation and if you're arguing the American dollar is not being devalued then crazy! The paper currency isn't necessarily the problem, it's the fact that very few control it and by doing so take away from everyone else using it (the dollar). This is the EXACT reason why country after country have cried and cried for a new reserve currency. The US is using it the fact they control the reserve currency to fuck with the world and they back it up with the US military (by force).



Ummm, what the GOV allows me to earn.



What? Are you crazy? What can I ask my boss to pay me in? Exactly.



So is crazy.


Wow, yup, crazy! I should have to move out of the country I was born in to get a fair deal (not get robbed by inflation). FFS.
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*sigh* You clearly don't understand how inflation works if you're this afraid of it.
 
CreepyUncleGoogle said:
So you use and value US currency just like the rest of us. ^^ Its okay to despise it, but at least recognize that even you, someone who doesn't like the idea of having a standardized means of exchange (and who might prefer, I dunno, using scales to compare metal weights to add complexity to the purchase of a good or service) assigns it a level of value.
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OR how about just keeping it simple and having the people in control of their own countries currency and not private banks! Simple...when you actually think about it.

As for having a choice, of course you do. You can move somewhere else and use a different form or currency or you can start trading and bartering for everything you need. Didn't some kid start trading a watch on Craigslist and ended up with a car recently? There's your ticket out of the oppression of having a standard monetary system! Blue team go!
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Quote again for a second LOL.
 
damicatz said:
It is illegal to pay employees in anything other than US dollars.

Moving somewhere else is not a valid choice because I have every right to be here and to live my life in peace. That is like saying if you don't like the mafia breaking your legs with a baseball bat, you can move somewhere else.
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So you're saying you can't leave and you're being held where you are against your will?
 
MasonD said:
OR how about just keeping it simple and having the people in control of their own countries currency and not private banks! Simple...when you actually think about it.



Quote again for a second LOL.
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You do know that people who own private banks are people that live in countries right? So, your desires are already being met.
 
MasonD said:
LOL...crazy. Forget I even spoke to you.

(Wonders if you were Stiletto before the obvious ban!) ;)
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There's very little reason to start an argument if, once you sense you've no way of winning it, you drop one last insult and then run away. :D
 
CreepyUncleGoogle said:
There's very little reason to start an argument if, once you sense you've no way of winning it, you drop one last insult and then run away. :D
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I thought there was reason here, I quickly sensed it's crazy on the other side, I realized it's better late than never to just "who cares" and move on. Also, not an argument, I stated facts, you stated crazy things like move out of a country for a fair deal and if you use something you value it as much as everyone else. That shit is crazy talk and if you don't think so, exactly! So like I said...lets just stop talking now, we both spoke, time to move on IMO (stiletto).


(Runs away because you can't argue with crazy no matter how right you are)
 
So have all these people who collected 'bitcoin' reported it on their income tax forms?
 
sfsuphysics said:
So have all these people who collected 'bitcoin' reported it on their income tax forms?
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Probably not but then most of them are outside the US and aren't required to do so.

MtGox is also not a US entity.

This is nothing more than bullying and theft by the US government.
 
sfsuphysics said:
So have all these people who collected 'bitcoin' reported it on their income tax forms?
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If they were full blooded americans, you know they didnt put it on thier taxes, if they are immigrants filing for the first time, they did...we all make that mistake once.... and never again....lol
 
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