Topic: What if world's banks coordinate to close accounts of exchanges? (Read 1026 times)

I do think this could be a problem, but not because banks would collude to shut down accounts because they feel threatened by Bitcoin. I doubt most bank directors are currently aware of Bitcoin at all.
 
It could be a problem due to anti-fraud measurements though, which I witnessed first hand recently. When transferring money to Mt.Gox' account in Poland, my transaction (through internet banking) was immediately cancelled. Within a minute (quite spooky, actually) I was called by my bank with an employee apologizing for blocking my order. He could see I had transferred money to this particular account before so he would manually lift the blockade, which he indeed did. Apparently, all transactions to Mt.Gox are flagged by the banks internal systems.
 
I asked him why the transaction was blocked in the first place and he explained it was due to anti-fraud measurements. When people's bank accounts are hacked, thieves will usually transfer the money to a Bitcoin exchange so they are able to get away with the stolen money. Banks are aware of this and have a pretty good reason to shut down the accounts, because they'll have to cover all stolen money themselves.

This is probably what happened with Bitcoin-24's accounts as well and this is a serious problem. The best way to solve this seems to be that opening an account with an exchange would always require you to identify yourself, such as Mt.Gox is doing with their verified accounts. The Bitcoin exchanges would then have to work together with banks to prevent stolen money from entering Bitcoin. This does mean more regulation, which might be perceived as unwanted, but I believe this will protect Bitcoin in the long term.

Tl;dr: Bitcoin exchanges need to be proactive in combating fraud and screen their customers, otherwise banks have a very good reason to deny them their services.

Exactly. Banks are of nature criminal.

I don't see how any intelligent individual can claim otherwise. Perhaps you find a small bank that's honest, but once they get big, and opportunities arise and attempt their greed, you can be sure some will take advantage of it.

Now, there's no reason that banks should collude to shut down accounts of bitcoin exchanges.

this type of action could cause mass hysteria against the banks something they would probably like to avoid

There was a similar topic recently about the scenario where large world governments would want to shut down Bitcoin. See replies there (here's my take at it), they won't succeed and effectively nothing is gonna change.

You seem to be confused, Bitcoin is new money. And new bitcoins come from mining. And "get money out"? What do you mean, similar to people getting money out of the Euro or Dollar, or what?

Either way, I for one would be happy to accept BTC.

As if banks would care even the slightest bit about legal issues

Let me know if you wanna get rid of your bitcoins. I'll buy them.

i would also assume that in certain countries the exchanges could sue for anti-competitive behavior or something else

There are banks in outside countries who will gladly accept deposits regardless if its for human trafficking or bitcoin.

The food supply is the miners, not the exchanges. The exchanges are only temporarily needed now when there's a need to migrate from fiat to BTC. Their only function is to facilitate that migration. There's no real reason why the exchanges are strictly needed. And you can always just buy Bitcoins with cash locally.

It is probably true that governments would have a hard time killing BTC by going after transactions and, harder yet, the network due to its decentralization. What if they just decide to cut it off its food supply?

What if the banks decide that their profits may be at stake? What if the banks of the major countries decide to launch a coordinated attack and close all accounts of BTC exchanges. How then would new money come in to BTC and how would existing BTC holders get money out? Who would want to accept BTC at that point? Could the banks even do this without a legal reason?

Concerned...