Topic: New York regulator plans 'regulated' Bitcoin exchanges (BBC NEWS) (Read 2501 times)

Maybe, but what with the gold market manipulation story is beginning to get more recognition, I wonder whether it will be quite so easy to come up with a good excuse to defer delivery or give out IOUs. Precious metal delivery is logistically complicated when you're dealing with the volumes traded on big markets, there's almost certainly a million and 1 excuses that can operate at multiple levels of responsibility. Bitcoin delivery is obviously too simple ("Hot wallet demand too high" is the best excuse that can possibly be used).

I think the community should be ready to scrutinise the ease of withdrawal, and publicly deride anything less than instant, direct access.


This I can thoroughly believe. Manipulating the bitcoin markets right now must be expensive, and a little emasculating. This should make that job cheaper. Of course, this is yet another place for dollar liquidity to be soaked into, but you can also look at it as yet another driver towards a limitless QE printing press. It's difficult to decide whether feeding this monster will either help surpress bitcoin to a comedy price, or aid the case for bitcoin further due to an increase in QE volumes to comedy quantities, or both. Either extreme is ultimately costly (if not expensive in a meaningful sense), so I'm thinking that it might be more valuable to just use the market capture in a more traditional way to manipulate the price cycle. Hong Kong and Singapore are getting into this game too, and bankrupting bitcoin exchanges isn't going to get blamed on bitcoin forever, especially if someone outside the direct influence of Wall Street can instead make it seem like Wall Street sucks at bitcoin.

What is hell is wrong with people welcoming this. Yeah like I want to be regulated by the same sources that have been destroying it and mocking it as a bubble. Yeah please regulate every transaction I make so I have to keep a record of them and pay taxes on them! Yes please....There are plants on this forum paid to say these things are great, don't trust 90% of them.

Call me a conspiracy nut job but it all fits too well. One month the biggest Bitcoin exchange is hacked and pushed heavily in the media and then comes along a big plan to have a regulated exchange.

NXT/NEMS plan for a decentralised exchange is looking better by the day.

You're ignoring the risks associated with this though. 

The main "restrictions" on the exchanges will be that they're required to monitor who is buying and selling, and ensure that criminal organizations or sanctioned countries are not using the exchange.  This could cause two major problems with BitCoin:

1. As of now, and for the foreseeable future, BitCoin is an inferior way of buying and selling legitimate goods compared to debit/credit cards.  The only area of the market where BitCoin holds an advantage is with places like Silk Road.  The problem this creates is that legitimate users will likely flock to the regulated exchanges, whereas criminal users will avoid regulated exchanges exchanges that are being monitored, and stick to unregulated exchanges. 

This will create a supply/demand pricing issue with the unregulated exchanges.  If I could buy 1 BTC from a regulated exchange at $600, or from an unregulated exchange at $600, a rational person would choose the regulated exchange every time.  So in order to remain in business, an unregulated exchange will have sell BTC at a price below $600.  This point will lead to one of two results.

1a. There are not enough people willing to purchase BTC from unregulated exchanges.  The price on the unregulated exchanges crashes, and BTC becomes a horribly inefficient way to purchase illegal goods, or to get around government controls.  As a result, any business relying on these unregulated exchanges will simply leave the BTC market.

1b. There are people willing to purchase BTC from unregulated exchanges, as they believe they can re-sell it to the regulated exchanges.  The price between the exchanges would remain close, and businesses would stay in the BTC market.  However, as a result, the government will almost certainly step in, and force the regulated exchanges to blacklist transactions coming from the other exchange, as investors between the two are merely acting as middlemen.  Also, any investors caught taking advantage of the arbitrage opportunities between the exchanges will be at risk of Uncle Sam walking in and freezing their assets.

2. A lot of people buying into BitCoin as an actual currency as opposed to just people trying to make a quick buck are of the Libertarian mindset.  They loved the idea of a currency that was outside of government control.  A regulated exchange damages this.  They would then consider both credit cards and BitCoin to be the same, and many would go back to using credit cards again.

Regulated exchanges bring safety and liquidity, but they also could cause the total market to shrink.

It'll be interesting to see how intrusive those regulations become, whether they do stop at the point that is related to fiat or if they insist on also knowing or having sight of all crypto-crypto exchanges on any exchange handling their fiat.

guys remember. if your exchange touches FIAT then submit formal proposals to get licenced. because you are using THEIR product (fiat). if your just an altcoin swapper, dont give them enough rope to hang bitcoin.

they only have jurisdiction over people using american dollars. a good example is that if you only trade euro's and your not based in the state of new york then you dont need to file proposals to the new york state. you have to though, file with the government of the FIAT you are using, (europe)

so remember this is just about dollar touching businesses. there is no need to file with any country if you are just a altcoin swapper

enter wallstreet


bitcoin to $10 000
litecoin to $2 000

I see this as very positive indeed, assuming licences are granted.

Liquidity will help with price stability.

NY = a rats den full of Howard Sterns, communists, psychopaths, and weirdos.

As already mentioned, of course they're going to try and steal your money.  You can always just deposit to do a transaction then instantly withdraw though.

YOu can't regulate bitcoins. Even with law against currency exchanges. YOu cannot stop bitcoin users from simply shipping and handling items themselves in exchange for raw bitcoins. Enough of us know what to do when this happens. I will open up my own store for bitcoin only trade. No exchanges. I suppose that's what most of us die hard BTC users will be doing.

Wall Street regulated Bitcoin exchanges are going to be run like the gold exchanges.

This means that bitcoins are going to go in and will never see the light of day again.

Your bitcoins will be rehypothecated.

You'll only be able to withdraw bitcoin IOUs, not actual bitcoins on the blockchain.

Market makers will be able to naked short as much as they want, and when they fail to deliver the bitcoins which they never actually had they'll be able to deliver dollars (which they can borrow into existence from the Fed for 0%) instead.

Regulation means that Wall Street wants to enshrine their preferred forms of corruption and fraud into the system while keeping competitors out of the game.

ok! i will try to use my brain
thanks for the answer anyway

Try to use your tiny brain to follow ok?


Because it increases liquidity .....

wow

People have faith in putting their money in banks because they are sure they can get it out again.

That's why banks were not 'allowed' to fail.

If the general public lost faith that they could ever get their money out then this would trigger bank runs and capital flight.

We even saw in the UK people queuing up trying to withdraw every penny the had from banks like northern rock when it looked like they might collapse.

People are wary about buying bitcoins because there is no protection via regulation of exchanges or other places were bitcoins are held.

Also they are hearing news about this bitcoin exchange collapsing and the CEO of another exchange committing suicide etc.

If that fear is removed and not only were exchanges regulated like casinos in vegas are regulated and checked (casinos have to hold onsite enough dollars to cover every single chip in play) and insurance companies could then insure regulated exchanges the floodgates to mass acceptance will open.

Let me guess.... you havent mined or bought enough btc yet...

How typical 

Why would that necessarily happen? could you make a more brief explanation?

Thanks!

This is potentially great news as long as my understanding is clear.

It is the EXCHANGES that will be regulated not bitcoin itself.

Bitcoin by its nature is a decentralised and open protocol, it can only be regulated by the bitcoin community.

If the exchanges are more solid and can be regulated to prevent another mtgox from every happening that will spark a flood of interest and adoption.

Or decline, you don't know what the rules will be.

BBC News story here.

http://www.bbc.com/news/technology-26538378

Price should rocket if this actually happens.