Bitcoin News
Daily diary of what's happening with Bitcoin.
Forbes contributor and Bitcoin Foundation (@BTCFoundation) board member Jon Matonis (@JonMatonis) considers the impact a government ban on Bitcoin would have on the fledgling currency. Excerpts:
“The demand for an item, in this case digital cash with user-defined levels of privacy, does not simply evaporate in the face of a jurisdictional ban.”
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“Ironically, the ban would create something like the Streisand effect for Bitcoin generating an awareness for entire new demographic groups and new classes of society.”
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“[Bitcoin is] a bet that career mobility and independent contractor businesses will eventually outstrip the growth of the corporate wage-slave population.”
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“[The government’s] best response to Bitcoin is irrelevancy, or failing that, extreme gold-like market manipulation for as long as possible. The end game for the State is perpetuating the fiat myth — their fiat myth not the populace’s cryptographic Bitcoin myth. They have always known that faith in money is a mass illusion, however they never considered that they wouldn’t be in charge of the illusion.”
- http://onforb.es/112nF0u
- http://bitcointalk.org/index.php?topic=139516.0 (Further discussion of this article)
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Rohan Pearce (@rohan_p) wrote a piece in Computer World Australia describing ways Bitcoin was flagged as a “potential vulnerability” as part of a July 2012 report on money luaundering by Australian watchdog AUSTRAC. Excerpts:
“‘AUSTRAC is aware that digital currencies, such as those offered by Bitcoin, may become more attractive to criminal groups, particularly in response to tighter regulation and monitoring of established or traditional financial channels by both government and the traditional financial service providers themselves,’ [AUSTRAC CEO] Schmidt says.”
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“‘By not being able to easily trace either the criminal or the placement of money, and coupled with the issue of which country should criminal proceedings be brought in, it is appealing to criminals who want to quickly launder money,’ Chambers-Jones argues.”
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“‘By far the bulk of attempted money laundering activity continues to be undertaken through the mainstream financial system,’ Schmidt says.”
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“Chambers-Jones believes that while governments and law enforcement agencies are aware of the potential of virtual world money laundering, there needs to be political will to specifically regulate the area. ’You need to get all countries to agree on a policy and this is going to be incredible difficult to get a consensus on because of the societal difference which underpin legislation,’ she says.”
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“‘No one country or body regulates and monitors the internet, and therefore no-one can control in the most part what goes on within the internet,’ Chambers-Jones says.”
- http://bit.ly/RUbenj
- http://www.austrac.gov.au/files/typ_rprt12_full.pdf
- http://bitcointalk.org/index.php?topic=100764.0 (Forum discussion for this report)
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A post on Bitcoin Money blog (@BitcoinMoney) describes a session at an upcoming conference in which regulators, bankers and anti-money laundering specialists will be discussing our favorite digital currency. Excerpts:
“One of the conference sessions under the Trends in Technology track, titled New Trends in e-Payment Methods: Understanding the Virtual Customer, will let attendees: ‘Analyze financial crime trends and vulnerabilities in credit cards, Bitcoin and pre-paid cards, especially in developing countries’.
“Why might Bitcoin be getting addressed explicitly this year? There have been no laws passed addressing Bitcoin or digital currency in general even nor have regulators given any guidance for dealing with Bitcoins.”
“These delegates are the lieutenants for the old guard. They help assert control so that we have no choice but to continue suffering through price increases as currencies around the world are debased. They maintain the control which ensures that we are tied to a system that rewards its loyal customers with $30 overdraft fees, 30% interest rates and $3 million bonuses for the executives”.
A post on Bitcoin Money blog describes the latest development at Bitcoinica but also includes a cautionary note regarding the trading service’s current status. Excerpts:
“Bitcoinica has started paying interest to those holding balances in their accounts with the service and will start passing through interest rate differentials to those using leverage to hold BTC/USD positions”.
“A contributing factor to Bitcoinica’s growth has been that its margin accounts are trivially easy to open and leverage is granted automatically without restrictions”.
“Faced with a concern from a customer that withdrawal will require identification Tong responds ‘Currently we don’t have any KYC procedures. […] Just don’t worry about it’.”
“Even if Bitcoinica has a plan to get itself “in full compliance”, it may not have the “few more weeks” to do so”.
- http://www.bitcoinmoney.com/post/17566027429
- https://bitcointalk.org/index.php?topic=63694
A post on Bitcoin Money blog describes how FinCEN’s recently published Final Rule regarding prepaid access (stored value) may impact Bitcoin. Some excerpts:
“Sellers of prepaid access must collect personal information from customers, maintain transaction records, file suspicious activity reports and comply with other requirements of money service businesses (MSB)”.
“There is no way to limit where bitcoins can be spent and the value is easily transferred from one person to another so bitcoin will not likely be considered exempt from the AML regulations”.
“The bigger impact of following AML compliance may not necessarily be the cost of compliance itself but instead the likely result — to effectively de-anonymize Bitcoin”.
“Ironically, these new regulations may drive even faster Bitcoin adoption […]”.
- http://www.bitcoinmoney.com/post/8412471372
- http://www.gpo.gov/fdsys/pkg/FR-2011-07-29/pdf/2011-19116.pdf
