Topic: The SEC Shows Why Bitcoin is Doomed. - page 4. (Read 9186 times)

You say all this and you cannot smell the deep stench of CARTEL?!!!

The money business in the USA is a racket from top to bottom, Federal Reserve is the racketeer in chief ...  how else do you think was the whole sector able to extort hundreds of billions from the taxpayer in 2008 and get away with it?

Crawling to the racketeers asking for permission to run you own shop inside their protection network and expecting it to end well is the height of naivete, or just plain insane.

It's a racket, refuse to see that, deny the reality and you get what you deserve.

Yes, I understand why it would be beneficial for Bitcoin to have the support of a nationwide bank. Hell, I used to work for one of the authors of H.R. 3841 Interstate Banking and Branching Efficiency Act. Banks need to run as profitable businesses and comply with major truckloads of legislation that far outweighs just money transmitter licensure. The public derives some of its trust in banking establishments from the visibility of "brick and mortar" branches. Online only banks like USAA are increasing in popularity but they are themselves a fringe business type that also failed in mass during the 2008 recession. Using a difficult to successfully operate business as the saving grace for Bitcoin seems like a fools errand.

I believe this is true. Think of the poker world. The small islands around the world received a huge influx of money. Isle of Man, Antigua, several Indians reservations in Canada, etc. If a country embraces a much larger entity than online poker, I think it could be very beneficial, especially if it's a smaller country.

My understanding is that banks need not register with the states.  Dwolla tried the registration route and as I understand it abandoned the effort when association with another was easier, cheaper, etc.  They focus on thier core business while the bank addresses compliance.

Now if I were to guess Milne is after market share at this point, so profit is a longer term proposition and I can't say the association with the bank fits the model, but the idea is pretty solid and money is willing to follow.....

And yes, BCB, I have chatted with Silicon Valley Bank and they are very aware of their position here......

The result is: The exchange rate many folded after that article was published  

The first country that give bitcoin green light will receive huge amount of wealth inflow from all over the world in a couple of years. And that country will become the financial center of bitcoin economy

QuestionAuthority,

Because "Money Transmitters" and therefore bitcoin businesses, have no Federal Regulator, FenCEN and the Department of Treasury has made BANKS the de facto regulator of "money transmitters."  FinCEN has also labeled "money transmitters" "HIGH RISK" so instead of banking money transmitters banks are just closing their accounts and thus putting bitcoin companies out of business.  See tradehill.com

A federally chartered bank that would assume the "risks" associated with virtual currency business would be a game changer.

Silicon Valley Bank (SVB) is banking coinbase.com and they are now a front runner in the new economy where the traditional backs may end up like classified advertising in newpapers after the advent of craigslist.com, potentially non-existent.

What would Bitcoin become in your newly purchased banking system? A replacement system for ACH/EFT? A separate service offered. Banks, more than ever, need to be profitable. Remember, 465 failed banks from 2008 to 2012.

Bob.
If you are serious about a federally charted bank PM me.

Anyone look at the idea of purchasing a bank seriously.  We thought finding a federal charter was interesting but have not pursued the practicality yet.  I also like what Milne did at Dwolla through their association with Veridian Credit Union.... you know of other examples that takes care of the register-in-every-state nightmare?  CA registration alone takes months and even for those out of state they want to personally visit.....

Ok, what was the outcome of this symposium? http://nmta.us/site/page.php?570

Death and Taxes

I hear you and certainly share your frustration.  But I really do think there is something very different about the peer to peer nature of individuals transacting with individuals that will make it VERY difficult to regulate it out of existence.  

QuestionAuthority, Absolute NOT.


Again i point to the Millybitcoin ruling and the other resent (non-public) ruling that show that individuals can make a difference and individuals united to achieve the same goal can have a HUGE impact regardless of the opposition.

If I'm reading this right, you are predicting the inevitable failure of Bitcoin as a mainstream financial tool. Start-ups can't afford the cost of entry and power-brokers with deep pockets will crush new legislation, yes?

There was an attempt to create a "Uniform Money Services Act"

http://www.uniformlaws.org/ActSummary.aspx?title=Money%20Services%20Act

But it is enacted in only five (5) states!! (Edit: and 2 territories).

http://www.uniformlaws.org/Act.aspx?title=Money%20Services%20Act

I agree to a certain extent.  I generally oppose new regulation but the current situation is just a nightmare of asinine proportions.  They are less than 100 companies in the world which have licenses in all fifty states.  There is some legal opinion that is is easier and cheaper today, to form a new bank (or buy an existing bank or credit union) and thus bypass the entire issue because banks and credit unions are not MSBs and their national charter makes them outside the regulatory scope of most state regulations.  When it is easier to form a bank then issue a prepaid card for example you know something is wrong.

Still this has been a problem for twenty years now.  Decades before Bitcoin was even born there have been attempts to create a single national license because the current system is broken but all attempts to date have been futile.  The states certainly don't want to give up that power and control.   The existing players who have already gone through that nightmare don't want it to go away.  PayPal LOVES the excessive, asinine regulation.  It all but guarantees there will never be a PayPal direct competitor because the burden on any startup is simply too high and without a startup the risk is too much to dump the tens of millions to jump right to the next stage of the game.   The current MSB/MT regulation is a massive economic boom for the GreenDots, PayPals, and Western Unions of the world.  They will move massive sums of money in lobbying to kill any attempt that opens the flood gates for competitors.

Maybe this time will be different, it certainly is needed.

DeathAndTaxes

You bring up a HUGE issue.  There is no Regulator at the Federal Level for "money transmitters" the "Money Service Business" category that FinCEN put the bitcoin industry in with the March 18th Guidance.

This is some thing the National Money Transmitter Assocaition is trying to address with upcoming "Industry Symposium for Legislative Action - (ISLA)" February 18, 2014 9:00 AM to 5:00 PM EST in Washington DC.


Carnegie Endowment for International Peace  
1779 Massachusetts Avenue NW
Washington, DC 20036-2103
  
This will be an all-day forum, hosted by the NMTA, that seeks to bring together everyone in the payments services industries to discuss what a National Payments Services Act might look like. Here is why we believe such an Act would be beneficial:
To make the regulation of payments services providers more economical, efficient and effective for both the government and private sectors.

To better protect the United States from financial crime and the funding of terrorism.

To better protect the rights of consumers and ensure a fair, transparent marketplace for payments services.

To provide a national insurance fund for the protection of money transmission consumers.

To provide regulators and law enforcement with a centralized, national database of all those companies licensed to do money transmission in the United States and their agents.

To provide regulators and law enforcement with timely, actionable information.

To establish minimum regulatory standards for all payments services providers serving the US public and to promote greater regulatory consistency across the states.

To allow better communication and coordinated action among the federal government and the various States, in the regulation of payments services providers.

To ensure regulation is consistent, continuous and appropriate across all types of money transmitting industries and all money transmitting business, no matter of what size.

To monitor the orderly banking of payments services providers and provide reasonable access to the banking system for licensed money transmitting companies that are essential to our economy.

To allow non-US providers of payments services with no physical location in the US, to serve the US market and to ensure they meet regulatory standards that are consistent and centrally-administered.

To promote competition and remove unnecessary barriers to interstate trade.

To encourage the healthy development and growth of money transmitting companies and support public confidence in those companies.
To encourage and promote technological innovation in financial services.

To ensure that any US consumer no matter where located, can patronize any licensed US provider of payments services, no matter where that company is located.

To provide a framework within which the payments services industries can regulate themselves to the greatest extent possible.

To ensure that US financial marketplaces remain competitive on the world stage.

To better provide for coordinated action among the US government and foreign governments in the prudential and anti-money laundering regulation of the various payments services industries.

This meeting is for the payment services industries, their trade associations, independent reviewers and legal advisers. This includes not only money transmitters of all kinds, but also money order issuers, check cashers, foreign exchange dealers, web-based transmitters, prepaid access providers, mobile money transfer operators, third party payment services providers and virtual currency dealers.  
 
Attendees are encouraged to address the group, and your written materials will be posted. If you are interested in attending ISLA, please click here to register. Registration is free, lunch is on your own.
 
Help us hammer out a regulatory framework that will let all US consumers use any licensed provider, and enable the normalized banking of these vital industries.
 
Regards,
 
- David Landsman

https://events.r20.constantcontact.com/register/eventReg?oeidk=a07e8ofjkaq22e8c4db&oseq=&c=&ch=

They do appear to be doing something right but how long will that last. Every new regulation enforced brings a new cost of doing business. My worry is that the cost of entry will eventually become too high. My favorite thing about Bitcoin is it's ability to enable unencumbered worldwide transfer of value. In my mind, this puts it in a league by itself with no competition. Pegging Bitcoin's value to fiat currency is drawing the bullseye on it in every country. Is there no reasonable method of barter that can happen quickly where Bitcoins can be bartered outside of a fiat system? Selling used or new items directly through an eBay type system works but isn't good enough. We need someone to sell a pound of bread flour for btc and have the flour mill pay it's workers in btc.

What is Coinbase and/or CampBX doing that BitInstant didn't?  You are implying those entities have state licensure as money transmitters are you?  If they did it would be pretty easy to verify yourself as that information is public record.

For example CA:  http://www.dbo.ca.gov/Licensees/money_transmitters/money_transmitters_directory.asp

The reality is that at the state level most of the regulation is simply a giant unknown at this point.   No two states have the same requirements, no two states even share the same definition of money, money transmitter, or even transmission.  Many states explicitly use the word "currency of the united states", some doesn't even include "foreign currency".   Some states limit their oversight to negotiable instruments (such as checks).   Does Bitcoin meet the regulatory definition of all states?  Maybe, doubtful but there has been no definitive statement by all state regulators ... yet.  However that cuts both ways, to my knowledge no state has said "exchanging Bitcoin isn't covered by statuatory definitions" either.

Bitcoin isn't just cutting edge technology, it is cutting edge in the legal space as well.  It probably will take decades, and countless court cases to resolve it all.   Most big (and no Bitcoin company is even close to "big" I am talking multi billion dollar company) simply get licensed everywhere it is possible to be licensed because despite the up front cost (eight figures easy) it is "cheaper" than the unknown.   Better to be licensed and not need to be then be not licensed and need to.  That simply isn't an option for ANY startup.

To my knowledge no Bitcoin related company US or foreign has a money transmitter license in all states that issue licenses to money transmitters.  I don't believe any Bitcoin startup even has a money transmitter license in a single state.  Someone correct me if I am wrong with cites from one or more state money transmitter registries.  Generally when seeking a license you are implicitly saying "yes I believe our activity is regulated and engaging in this activity without a license is criminal".  By definition that would imply you need to stop business to even attempt to seek the license.  Generally regulators don't issue licenses who are defacto breaking the law at the time they are seeking the license. 

+++++1

Every bitcoiner should just understand NOT to believe anything you read in the mass media (you should also take EVERYTHING you read posted by the Libertarian KOOKS here on bitcointalk.org with a grain of salt.)

Almost every single bitcoin new story includes factual errors that expose that fact that many of the experts they interview and the "journalists" themselves just don't understand the protocol.

Ya there's tons of articles for and against BTC. Reality is nobody is certain about what's going to happen to its value, but those whose position on BTC gets validated in the future will say they knew all along.

Jeez. I wonder if we will ever get past this phase of utter stupidity and lack of intellectual competence in journalism with respect to BTC.