Author

Topic: Gox operating illegally in the US (Read 640 times)

newbie
Activity: 14
Merit: 0
May 23, 2013, 08:10:54 AM
#10
The price seems relatively stable and its tracking with gold which is interesting. Technically we are getting a glimps of what the world would be like if bitcoin only traded with bitcoin and not with other currencies much. A glimps of a post dollar world. Bitcoin has not crashed! It can't if big trades to currency are not available.
There are now many more ways to get bitcoin for other money. but these are small transactions.
I don't object to the reporting rules as they stand; The terrorism threat is real and the drugs dangers are real. However the precedent is a problem. As Satoshi said Wikileaks and by inference Silk Road were bad calls. As they say in the Q continuum: "Dont provoke the Borg!" Build up step by step. Be ready when the Fiat currency monster stumbles. Its too big to push.

I was really surprised that there wasn't a crash when the news came out. As soon as I read it I was watching the price, getting ready to buy BTC. While I never got my dip in price I was looking for, I was encouraged by the stability of the currency through it all. Hopefully it is a good sign for the future of BTC.
newbie
Activity: 15
Merit: 0
May 23, 2013, 02:46:57 AM
#9
The real problem is one of changing policy and retrospectively. Mt Gox got the account when bitcoin was next to worthless. The government paper work has no provision to post an up date or write "this may become money at some time in the future."
There's a good chance FinCEN has blown a police sting or two. The system is pseudonymous and block chain is public. With the skills you could track your buy through silk road to the guy making the LSD.
http://www.reuters.com/article/2011/06/15/financial-bitcoin-idUSN1510930920110615

There is provision for additional data in a bitcoin transaction message. This means Satoshi even anticipated this problem. However the libertarians will have a fit if anyone implements it as anti-money laundering transaction tags.  Shocked
donator
Activity: 1218
Merit: 1015
May 17, 2013, 12:23:18 PM
#8
Does US has the power to close Mtgox?

Yes and no. The US does have the power to close MtGox, because the US is extremely powerful. But it does not have the sovereignty to do so (MtGox is Japan-based), nor does it have the inclination to do so. Let's be clear: the US isn't going after MtGox because it is a bitcoin exchange. The US is going after a subcompany of MtGox (i.e. the US branch of MtGox) because it failed to disclose that it was a MSB.

If MtGox were to fight this, I think they would have a good case to say that, before the FinCEN pronounciation on what is or is not a MSB regarding bitcoin, there was no way it could reasonably be expected of MtGox to know how to correctly register their bank account. But often logic does not apply when it comes to the actual US justice system, so who knows what'll happen.
With the LLC, the USG may also be going after Gox itself (rather, Mark) given the violation carries up to five years' prison time. Idunno what all requirements are needed for extradition, but I can't imagine why Japan would deny it.
newbie
Activity: 42
Merit: 0
May 17, 2013, 03:12:08 AM
#7
Does US has the power to close Mtgox?

Yes and no. The US does have the power to close MtGox, because the US is extremely powerful. But it does not have the sovereignty to do so (MtGox is Japan-based), nor does it have the inclination to do so. Let's be clear: the US isn't going after MtGox because it is a bitcoin exchange. The US is going after a subcompany of MtGox (i.e. the US branch of MtGox) because it failed to disclose that it was a MSB.

If MtGox were to fight this, I think they would have a good case to say that, before the FinCEN pronounciation on what is or is not a MSB regarding bitcoin, there was no way it could reasonably be expected of MtGox to know how to correctly register their bank account. But often logic does not apply when it comes to the actual US justice system, so who knows what'll happen.
full member
Activity: 135
Merit: 100
May 17, 2013, 02:56:36 AM
#6
Does US has the power to close Mtgox?
newbie
Activity: 15
Merit: 0
May 17, 2013, 02:52:03 AM
#5
The price seems relatively stable and its tracking with gold which is interesting. Technically we are getting a glimps of what the world would be like if bitcoin only traded with bitcoin and not with other currencies much. A glimps of a post dollar world. Bitcoin has not crashed! It can't if big trades to currency are not available.
There are now many more ways to get bitcoin for other money. but these are small transactions.
I don't object to the reporting rules as they stand; The terrorism threat is real and the drugs dangers are real. However the precedent is a problem. As Satoshi said Wikileaks and by inference Silk Road were bad calls. As they say in the Q continuum: "Dont provoke the Borg!" Build up step by step. Be ready when the Fiat currency monster stumbles. Its too big to push.
newbie
Activity: 34
Merit: 0
May 17, 2013, 01:53:08 AM
#4
Well for Canada, there is http://cavirtex.com/
They are a licensed MSB. So it all depends on where you try to setup.
sr. member
Activity: 728
Merit: 253
A Blockchain Mobile Operator With Token Rewards
May 16, 2013, 08:55:07 AM
#3
It would really reduce the amount of start up exchanges as the barrier to entry would go up by a lot.  It will take a lot of money to comply with US exchange regulations.
donator
Activity: 1218
Merit: 1015
May 16, 2013, 07:55:55 AM
#2
Mt. Gox has been operating illegally in the US, since it failed to disclose that it is an MSB and has not followed regulatory requirements. CoinLab is suing Gox for breach of contract. Yet the trading volume and price/USD are still high. Someone please allay my fear that Gox is being systematically destroyed.
Moreover, Bitcoin is now being treated as a currency by US LEOs, who are acting on it. AFAIK, no US-dealing exchange has the necessary state & federal MSB licensing (Coinbase might be an exception - I have no idea). If this goes unchallenged, and LEOs are obviously intent on setting a bad precedent, with wide-scale enforcement very possible after the precedent is set, US Bitcoin business will be a huge regulatory clusterfuck. Is Bitcoin still worth what it was before if US users cannot legally purchase or sell their coins anywhere (except in small p2p quantities)? If large miners' and merchants' treatment of Bitcoins as a commodity on taxes was all wrong? Is Bitcoin still worth at least what it was before if almost everyone in the US has to conduct business illegally underground and the US legal precedent is adopted by other countries?

- So forget Gox. How far-reaching will the consequences of this be if Gox's challenge (which I haven't heard about, yet - but it's early) fails and a precedent is set that Bitcoin needs to be treated as a currency, with exchanges requiring full state and federal MSB licensing?

Doom! Dooooooom!!
newbie
Activity: 9
Merit: 0
May 16, 2013, 07:38:22 AM
#1
Mt. Gox has been operating illegally in the US, since it failed to disclose that it is an MSB and has not followed regulatory requirements. CoinLab is suing Gox for breach of contract. Yet the trading volume and price/USD are still high. Someone please allay my fear that Gox is being systematically destroyed.
Jump to: