Topic: U.S. regulators eye Bitcoin supervision (Read 954 times)

MtGox and Coinlab are both under the jurisdiction of U.S. financial regulations. Without MtGox there is no Bitcoin at this point. Both will and are currently complying with U.S. government regulations and if they want to stay in business they will continue to do so.

Sorry to burst your bubble of freedom and trust me I would like it to not be the truth.

This is a good thing, which actually would empower Bitcoin.

Bitcoin should have two sides, one in the light perfectly transparent side, and one more hidden less controllable side, just like cash and the dollar. Except of course Bitcoin has even more flexibility than cash.

the CFTC needs to regulate bitcoin futures so that they can get listed somewhere reputable

no big company is going to go hedge-less in bitcoins otherwise

This Financial Times article carries such a deceptive headline.  No one here is talking about regulating Bitcoin, or even Bitcoin trade with fiat, but rather Bitcoin derivatives.  Derivatives meaning futures options and other financial *derivative* products such as those offered by icbit.se (which is fortunately located outside of the US).

But writing about some arrogant regulator talking about *possibly* regulating financial products derived from Bitcoin, and not Bitcoin trade itself, wouldn't garner many link clicks.  So they fudge it.

LOL, Bitcoin is not related to the US in any way. So, no, your regulation or jurisdiction does not apply sir

Furthermore, they can decide whatever they want, but I'm pretty curious exactly how they plan to regulate Bitcoin, in case they decide to do so

Ironically, they were tipped about Trendon Shavers who already broke their *existing* laws and they have yet to do anything about that now have they.

Thanks for the "protection" guys!

Interesting right? That perhaps our own enthusiasm for dramatic price fluctuations might incurre government oversight?

They have a point though. While we tend to be a 'let stupid people lose their money' type of crowd as most of us aren't directly involved in taking money from people, in the alt-currency forum you see mini-bitcoin drama played out every day. A lot of people have lost a lot of money on ridiculous alt-coins. We might up here in the bitcoin levels laugh at their folly, but to outsiders Litecoin looks/feels much like bitcoin, as do many of these other coins. It's easy for people to get scammed. Of course the governments roll in preventing this is unclear.

http://gata.org/node/12549

By Tracy Alloway, Gregory Meyer, and Stephen Foley
Financial Times, London
Monday, May 6, 2013

http://www.ft.com/intl/cms/s/0/b810157c-b651-11e2-93ba-00144feabdc0.html

Senior officials at a top US financial regulator are discussing whether Bitcoin, the controversial cyber-currency, might fall under their regulatory remit.

Bitcoin "is for sure something we need to explore," Bart Chilton, one of the five commissioners at the Commodity Futures Trading Commission (CFTC), told the Financial Times. A person familiar with the CFTC's thinking said that the regulator is "seriously" examining the issue.

Said Mr Chilton: "It's not monopoly money we're talking about here -- real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be 'out there' transactions."

Four-year-old Bitcoin is attracting the interest of regulators amid volatile booms and busts in the value of the cyber-currency and fresh media interest. Intensified regulatory scrutiny could pose challenges for proponents of Bitcoin, who have praised the currency for its independence from traditional authorities.
In March, a branch of the US Treasury Department said that all firms that exchange or transfer the virtual currency will be considered "money services businesses."

That means they must provide information to the government and introduce policies to prevent money laundering. It could also make it risky for other financial institutions to do business with firms that are not in compliance.

Since the ruling, at least three companies in North America have reported having their business accounts closed by their banks. Bitfloor, a New York-based Bitcoin exchange, said it was shutting down entirely, and it has not yet been able to return funds to customers.

Roger Ver, founder of Bitcoinstore.com and an angel investor in Bitcoin start-ups, said that he knew of some entrepreneurs who had moved to Panama to explore setting up operations outside of the US.

"Even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn't mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency," he said.

The CFTC regulates derivatives contracts and, under Dodd-Frank financial reform, has sweeping authority to oversee retail foreign exchange dealers.

CFTC jurisdiction generally does not extend to cash markets unless exchanges list derivatives contracts based on them. For example, the agency monitors physical oil transactions insofar as they influence crude futures traded on the New York Mercantile Exchange.

One person familiar with the discussions said Bitcoin would not become subject to CFTC jurisdiction unless it becomes the basis for a derivatives contract. The use of Bitcoin to pay for ordinary goods is outside the commission's bailiwick.

Leveraged Bitcoin transactions that settled in more than two days -- so-called "rolling spot" transactions -- would also fall under CFTC jurisdiction, the person said.

Said Mr Chilton, the commissioner: "In essence, we're talking about a type of shadow currency, and there is more than a colourable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction."