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US Government Begins BitCoin Crackdown

Tyler Durden's picture




 

As we first noted here (regulation) and here (supervision), the US government has been gradually encroaching on the independence and freedom of the virtual currency. This week, as The Washington Post reports, the government escalated. The feds took action against Mt. Gox, the world’s leading Bitcoin exchange. Many people use Dwolla, a PayPal-like payment network, to send dollars to their Mt. Gox accounts. They then use those dollars to buy Bitcoins. On Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at the request of federal investigators.

It’s the first federal action against the currency. CNet has confirmed that the asset seizure was initiated by Homeland Security Investigations (which among other things is responsible for enforcing the laws associated with money laundering and drug smuggling).

As this crackdown begins, many argue that "you can’t put the genie back into the bottle," as far as shutting down the 'network' of open source transactions; but as one Bitcoin enthusiast added (sadly), "I hate to say it, but the Bitcoin community needs to start lobbying, it needs to start educating policymakers, lobbyists and influencers about the pros of Bitcoin and the impossibility or the difficulty in getting rid of all the bad uses."

Considering the great antipathy the central planners have toward such legacy money as gold and silver, is it any surprise that they would move aggressively and rapidly to halt the emergence of yet another alternative to fiat, especially one which the ECB made it very clear will not be tolerated in an insolvent world. Because all is fair in preserving the FIATH...

Via The Washington Post:

...

 

Sen. Chuck Schumer (D-N.Y.) described Bitcoin as an “online form of money laundering” and called for the authorities to shutter the Bitcoin-based drug market Silk Road. Yet until recently, the feds have taken a relatively hands-off posture.

 

...

 

That hands-off stance may have started to change this week when the feds took action against Mt. Gox, the world’s leading Bitcoin exchange. Many people use Dwolla, a PayPal-like payment network, to send dollars to their Mt. Gox accounts. They then use those dollars to buy Bitcoins. On Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at the request of federal investigators. It’s the first federal action against the currency.

CNet has confirmed that the asset seizure was initiated by Homeland Security Investigations, a division of Immigration and Customs Enforcement. Among other things, that agency has the power to enforce laws against money laundering and drug smuggling.

...

Jerry Brito, a scholar at the libertarian Mercatus Center at George Mason University, urges federal regulators to tread lightly. “Bitcoin has the potential to be a boon to the economy and a boon to merchants,” he argues.

 

...

 

Moreover, he says, “You can’t put the genie back into the bottle.” In his view, the federal government would have as much difficulty shutting down the Bitcoin network as major content companies have had shutting down peer-to-peer file sharing. A major crackdown would merely drive the network underground, where it would continue to be used for illicit transactions but would be off-limit to ordinary consumers.

...

 

“I hate to say it, but the Bitcoin community needs to start lobbying,” he says. “It needs to start educating policymakers, lobbyists and influencers about the pros of Bitcoin and the impossibility or the difficulty in getting rid of all the bad uses.”

 

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Wed, 05/15/2013 - 14:04 | 3565592 vmromk
vmromk's picture

Uh oh.....

Perhaps all those momo's buying BitCoin instead of something you can hold in your hand will get Cypus'd.

By the way.....SUCK MY COCK BERNANKE.

Wed, 05/15/2013 - 14:07 | 3565611 Pladizow
Pladizow's picture

The us gov will have as much success with this as the music industry had with shuting down napster!

Wed, 05/15/2013 - 14:08 | 3565615 James_Cole
James_Cole's picture

A major crackdown would merely drive the network underground

Possibly the whole point??

Wed, 05/15/2013 - 14:13 | 3565635 Pure Evil
Pure Evil's picture

 

 

"On Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at the request of federal investigators."

 

And, with that breath of fresh air, I think Mt. Gox just got Corzined.

Wed, 05/15/2013 - 14:16 | 3565647 Stackers
Stackers's picture

"Bitcoin community needs to start lobbying,” he says.

 

and exactly how does an open source decenteralized collective group of individuals "lobby" congress ?

Wed, 05/15/2013 - 14:19 | 3565656 Cognitive Dissonance
Cognitive Dissonance's picture

E-mail? Tweets? Malware?

Come on..........help me here. Can I get a clue? :)

Wed, 05/15/2013 - 14:21 | 3565669 Rubicon
Rubicon's picture

I think he means the FED

Wed, 05/15/2013 - 14:26 | 3565688 redpill
redpill's picture

 

Well we talked in circles on this one for a long time on ZH.  There's a contingent of folks (me included) that thought this government boot was coming and would massively limit BTCs.  There's another contingent that think their efforts will fail and BTC will thrive.  I guess we don't have to talk anymore, we can watch and see what happens.  Sad part is most folks around here like the idea of a decentralized anonymous currency.  We were just worried that the feds would never put up with it.  And it looks like they won't.

Wed, 05/15/2013 - 14:37 | 3565715 James_Cole
James_Cole's picture

We were just worried that the feds would never put up with it.  And it looks like they won't.

 

This goes without saying, feds are actively (+ successfully) fighting freedom of the press and freedom of dissent through political activity (tea party). 

Freedom of currency is the ultimate middle finger to the empire, they weren't going to just lay down and let it happen. That said, if enough people get behind it there'll be a real fight. 

Here's a slogan: buy bitcoin, crash .gov!

 

Wed, 05/15/2013 - 14:50 | 3565782 McMolotov
McMolotov's picture

Folks, they're in the process of closing all the exits. That's what this is all about. This country is going to hell, and if the events of the past few months don't scream that to you, you must be deaf. And don't think for a minute they won't find a way to go after PMs, too. They will. You might keep your metal, but they'll make it a nightmare to transact with it.

In their vain attempt to save the dollar, they'll end up driving the entire economy underground and making us all criminals. I suppose in some ways that could give us a "free market," but I seriously doubt it'll be much fun for anybody.

More and more, it seems the government is flailing about in desperation, something which is always dangerous.

Wed, 05/15/2013 - 15:00 | 3565867 Citxmech
Citxmech's picture

As long as real property can be deeded for "one dollar and other valuable consideration," transactions in gold will do just fine - regardless of what the govt says.

Wed, 05/15/2013 - 15:08 | 3565912 12ToothAssassin
12ToothAssassin's picture

Online money laundering is inexcusable... because it cuts into HSBC's operation?

Wed, 05/15/2013 - 15:29 | 3566033 SilverIsKing
SilverIsKing's picture

If this doesn't work, they'll next make BitCoin illegal and send out webcrawlers to check each and every PC on the internet and if you're found to be hiding BitCoin's under your virtual matress, you'll get awoken at 3am by some armed men in UAVs.

I don't have an issue with the concept but the Feds will stop at nothing to stop BitCoin and they will ultimately win that battle.

That's why I coined the term, ShitCoinTM, pun intended.

Wed, 05/15/2013 - 15:53 | 3566151 macholatte
macholatte's picture

 

"Virtual Currency" the new standard of cool.

 

Introducing Amazon Coins: A New Virtual Currency for Kindle Fire

 

Wed, 05/15/2013 - 16:38 | 3566361 francis_sawyer
francis_sawyer's picture

"Chicken in the [FLASH IN THE PAN] PICKIN OUT DOUGH"

~~~

http://www.youtube.com/watch?v=Ht-6Ez8rSlE

Wed, 05/15/2013 - 22:08 | 3567603 SamAdams
SamAdams's picture

Astonished the money creators would send an Israeli citizen as congressional bully!. Must protect master's money creation monopoly. Surprised Blumenthal and Feinstein are not proclaiming their support. 

Thu, 05/16/2013 - 04:38 | 3568107 gold-is-not-dead
gold-is-not-dead's picture

it's silly, and somehow it's poetic justice, US citizens will be the only left out of the new paradigm....

Wed, 05/15/2013 - 17:58 | 3566629 thisandthat
thisandthat's picture

They don't need to, they just need to look at the transaction logs - remember one of the major sales point for bitcoin was that transactions are absolutely traceable - yep, talk about suicide by design...

Thu, 05/16/2013 - 16:13 | 3570596 MeelionDollerBogus
MeelionDollerBogus's picture

it’s not a log, it’s a hash code. It can’t be reversed to actual transaction items but it can’t be faked using alternate transactions unless a large network decides they all agree on a series of transactions – a divergent time-line – which leads to 0, 1 or 2 valid bitcoin peer networks (my intuition would say zero if the competing network is large enough).

Fri, 05/17/2013 - 23:50 | 3575201 thisandthat
Wed, 05/15/2013 - 15:03 | 3565882 Joe Davola
Joe Davola's picture

I don't see how people think it's truly anonymous if one has to go online to access it?  USofA isn't building those anonymous looking buildings with large data pipes for no reason.

Wed, 05/15/2013 - 15:09 | 3565908 McMolotov
McMolotov's picture

Haven't you heard? USofA is building those anonymous looking buildings with large data pipes "for the children."

Wed, 05/15/2013 - 15:11 | 3565931 12ToothAssassin
12ToothAssassin's picture

Correction: For your safety and protection of the childrens.

Wed, 05/15/2013 - 15:53 | 3566153 LeisureSmith
LeisureSmith's picture

Operation Protect the children: http://www.youtube.com/watch?v=VS6PnVMdViQ&feature=player_embedded

Mission accomplished.

Wed, 05/15/2013 - 18:01 | 3566639 thisandthat
thisandthat's picture

That's what steroids do to you

Thu, 05/16/2013 - 16:15 | 3570606 MeelionDollerBogus
MeelionDollerBogus's picture

dunno, steroids or evil. They don’t actually work precisely the same.

Wed, 05/15/2013 - 20:56 | 3566640 thisandthat
thisandthat's picture

dup

Wed, 05/15/2013 - 15:38 | 3566065 akak
akak's picture

Those are not data pipes, according to the late senator Ted Stevens :

 

It's a Series of Tubes!

Wed, 05/15/2013 - 15:47 | 3566116 Urban Redneck
Urban Redneck's picture

That was probably the "truthiest" disclosure of a classified truth by a US government official in the last quarter century. Not only was it funny, but the intellectual snobs who laughed at his statement (for the most part) didn't understand that it was far more functionally correct than their own perceived technical understanding of the internet functionality.

Wed, 05/15/2013 - 18:09 | 3566676 thisandthat
thisandthat's picture

Don't know if you know it, but researchers just created hollow optical fiber to transmit data at near light speed - the internet will literally be a series of tubes.

Wed, 05/15/2013 - 18:43 | 3566877 Urban Redneck
Urban Redneck's picture

The microwave link between NYC & Chicago is faster than the fiber optic tubes, so it's not about speed. The internet in general isn't about You-Tube & Amazon as much as it's about the MIC and 1984.  Back in 1984- the methodology, costs, and capture rate of incremental signal intercepts was a bitch, now the average American taxpayer fully underwrites an entire lifetime of their own Orwellian data nightmare with a year's tax bill.

Wed, 05/15/2013 - 21:33 | 3567505 thisandthat
thisandthat's picture

Like I said, hollow optical fiber can do near (vacuum) speed of light data transmission (light travels through air, not glass); fiber is also more flexible (literally and figuratively) and not as prone to eavesdropping/interference/attenuation as (mostly line of sight) MW links.

Thu, 05/16/2013 - 00:48 | 3567947 Urban Redneck
Urban Redneck's picture

I didn't realize they'd reached a practical price for any distance, since 170 miles at .5Tbps is the current champ in the field, but that's only 1/4 the distance of NY-CHI run much less the 2000 miles needed to join the two halves of skynet.  As to interception and interferance, it's easier and cheaper for them to eavesdrop on, and it's easier for someone else to interfere with (since all they need is a fire axe).

Thu, 05/16/2013 - 02:37 | 3568036 thisandthat
thisandthat's picture

MW exists for longer than the internet, yet, for a reason, it's fiber it's built on.

And funny because, unlike fiber, mw eavesdropping is not only trivial, it's also untraceable and even has an history behind it, and you'd still need to dig up the cables, which generally are also bundled together (and hopefully not from the bottom of the ocean...), whereas with a mw link all you'd need is a single shot and the whole link goes down... but since when is this a pissing contest between technologies?

Thu, 05/16/2013 - 15:49 | 3570516 MeelionDollerBogus
MeelionDollerBogus's picture

sorry, but with microwave that’s easily disrupted by atmospheric conditions and line of sight conditions. Bottom line is fibre-optics bend and if your line of reasoning was right then ALL internet would be microwave towers.

Wed, 05/15/2013 - 21:28 | 3567498 Clycntct
Clycntct's picture

Ya but howd he do picking flights.

Thu, 05/16/2013 - 00:41 | 3567956 Urban Redneck
Urban Redneck's picture

Tech fights tend to leave something to be desired, throw in the words "bitcoin" or "mac" and some people's blood starts to boil and they loose sight of objectivity, but I think (internet) "tubes" are a bit esoteric.

Wed, 05/15/2013 - 15:51 | 3566141 Hobbleknee
Hobbleknee's picture

It even says right on the official BC site that it's not anonymous.

Wed, 05/15/2013 - 19:22 | 3567077 overbet
overbet's picture

very simple to be anon online. buy a laptop with cash. buy btc with cash locally. walk to local starbucks, leave your smartphone at home and dont be on security camera. might be inconvenient but thats how its done.

Wed, 05/15/2013 - 15:24 | 3565995 lakecity55
lakecity55's picture

The way things are going, there is gonna be a hell of a lot of dead people in this country, and not too long, either.

This shit starts snowballing downhill. With Bath House an unstable, mentally ill freak surrounded by incompetent revolutionaries, things r gonna head south.

Find a cave, pull the brush back over the entrance.

Wed, 05/15/2013 - 19:19 | 3567065 ersatzteil
ersatzteil's picture

That's the Qu'ran's answer, too! Hide in a cave to get away from Gog and Magog's influence on society as they prepare the way for the False Messiah, or Anti-Christ.

"The Cave" Surah is worth the read and scores you cultural points at your local hookah bar.

Wed, 05/15/2013 - 16:30 | 3566325 Banjo
Banjo's picture

Another reason why not to have all your eggs in one basket. You just don't know what they are going to do.

Honestly the talk of lobbying for BitCoin is laughable. Ummm yeah we have this alternate currency thing that will make the USD redundant...

 

We are only going to see this fully play out when

- Things start getting priced in BitCoins or Silver or Gold NOT in currency. Which is why in the PM community often the talk is not nominal dollars but ounces and many theories on purchasing power of those ounces in times past and possibly in the future.

 

If there is a collapse it will be bad for all of us.

 

 

Wed, 05/15/2013 - 19:49 | 3567175 GOSPLAN HERO
GOSPLAN HERO's picture

At least we'll have true price discovery in a black market.

 

 

Wed, 05/15/2013 - 19:50 | 3567190 jimmytorpedo
jimmytorpedo's picture

Stand clear of thrashing dinosaurs my grandpappy used to aways say.

Wed, 05/15/2013 - 21:50 | 3567554 YHC-FTSE
YHC-FTSE's picture

I don't do schadenfreude,  so I am not happy about folks losing out with BTC. 

Here's a quick lesson on how the world really works: If BTC was owned by GOLDMAN fucking SACHS, we wouldn't be having a discussion. We blame the government, and rightly so, but it's the banks that pull the strings. 

The dollar hegemony is the illusion of value in nothing, and the ability to supply it to the world for real assets and power. Whole populations covet it, worship it, kill for it, and work for it. Would you give up that fiat monopoly? Anything that represents competition is either going to be bought or destroyed. Sometimes both. That's the way multinationals do their business and that model has a finite life cycle. 

 

I don't "trade" PMs. I have repeatedly posted that I couldn't care less about price fluctuations and the cheaper it is the happier I am to buy more - it is my long term, hail mary, store of my earnings. I am not trying to "talk prices up". I really believe there is a massive crash in the markets around the corner, especially now that the msm are selling the fantasy of a healthy economy. The banks are going to collapse and we can all look forward to taking haircuts if we're lucky, and if we're not, then we can look forward to living in a war torn 3rd world country without the charm or the freedom. I know some are sick and tired of the doomers and preppers, but you can console yourselves that at least you are reading an honest opinion even if I turn out to be wrong three years in a row on this matter.  :)

Wed, 05/15/2013 - 14:33 | 3565717 sitenine
sitenine's picture

+1 redpill, thus the lack of "I told you so"s. Why lament the obvious?

Wed, 05/15/2013 - 15:47 | 3566120 Bendromeda Strain
Bendromeda Strain's picture

Can I do just one "Where's Beeks?? Turn those machines back on!!"

Wed, 05/15/2013 - 17:13 | 3566470 chumbawamba
chumbawamba's picture

Yep.  Look, as a nerd, particularly one who enjoys engaging himself in the development and analysis of systems, I love bitcoin.  It is a beautiful system.  Nearly perfect and in total harmony with natural law as far as I can tell.  It is a tour de force of systems engineering; a masterpiece.

But, the biggest problem (aside from government intervention, which is also an unfortunate risk of precious metals ownership) is one that no one has yet been able to answer: what happens when the internet gets turned off?  Or the power?

I am Chumbawamba.

Wed, 05/15/2013 - 20:07 | 3567126 GoinFawr
GoinFawr's picture

deleted

Wed, 05/15/2013 - 20:53 | 3567386 dark pools of soros
dark pools of soros's picture

So the entire world turns off the Internet? If the country you are in shuts off access you may want to leave anyway. And you will easily use your bitcoins in your new country of residence.

Bitcoin has many fronts, and as overbet described above, you can use it purely anon.

But linking a bank account to an exchange or say coin base is fine too since you can then easily buy them at low fees and avoid credit card and PayPal high transaction fees on more and more items online and point of sale

The price of bitcoin will probably swoon for the next 6 months as old money and large miners cash out for gains but as it switches into the hands of more people with smaller piles the price will climb to new highs again...

I recently bought some more bitcoins at 95 and the bought silver coins when they were at 118. Have all the traders left this web site?

Thu, 05/16/2013 - 15:36 | 3570444 MeelionDollerBogus
MeelionDollerBogus's picture

YES, the entire world shuts off the internet, region by region, expunging bitcoin.

You may think no, but then nuclear weapons and bombings of electrical grids will ensue and you'll find out it's going to happen.

We need money that works with NO GRID, especially to repair grids or make new ones where none have been OR to live off-grid for good, which some of us WILL need to do. Guaranteed. This is why smart people who are forced to use cash use PAPER cash not electrons.

Thu, 05/16/2013 - 05:41 | 3568131 Zolko
Zolko's picture

We were just worried that the feds would never put up with it.  And it looks like they won't.

As Ghandi said: "First they ignore you, then they laugh at you, then they fight you, then you win". Loks like BitCoin reached level 3.Gold is at level 2 (that was probably the point of the april break-down). Soon - you know it will come - they'll try to regulate or forbid gold as money.

The end of fiat money is not far away. And they now it. Smaks of desperation.

 

Wed, 05/15/2013 - 14:26 | 3565689 King_of_simpletons
King_of_simpletons's picture

"Bitcoin community needs to start lobbying,” he says.

Bribe and bribe good.... the economy is booming.

Slip some gold bars under the table if you know what I mean.

Wed, 05/15/2013 - 15:18 | 3565962 TerminalDebt
TerminalDebt's picture

send them some untraceable bitcoins

Wed, 05/15/2013 - 14:26 | 3565690 BLOTTO
BLOTTO's picture

Faith: not wanting to know what is true.

.

-F.W. Nietzsche

Wed, 05/15/2013 - 14:29 | 3565707 Beam Me Up Scotty
Beam Me Up Scotty's picture

MtGox website down. 

Wed, 05/15/2013 - 14:54 | 3565825 Jumbotron
Jumbotron's picture

Let me once again re-post what I said back in early May when the story first broke about the Liberator 3D printed gun on ZeroHedge.....

 

"The 3D printing innovation along with other seemingly freedom enhanicng innovations such as BitCoin will actually have the perverse and paradoxical effect of increasing the tyranny in our lives.  The Global Elite both in the halls of political power and financial power have as their 24/7 modus operandi the need for total control so as to effect and perfect their seperate and shaired goals of a global utopia.

Disrupting technologies and the mindset that is bred and nurtured by such innovations is totally the opposite of what the Global Elite want....namely...control of freedom in THEIR collective hands.....not ours.

So....you will see a rush to condemn such innovations, if poo-poo-ing them and/or ignoring them won't work...particularly if a "terrorist" event is blamed on such innovations. 

This kind of thing....particularly dealing with firearms....will accelerate their plans to control not only this technology and innovation....but the idea of freedom around it.  They will not....they CAN NOT...allow freedom to reign amongst what they consider their subjects.

The floodgates are about to open.....watch and see."

 

Let me also repeat to the one person who down-voted me when I reposted what I said after the news broke a couple of weeks later that the Feds were stepping in to put the kabosh on the Liberator......and now it seems on Bitcoin as well......

"Fuck you...I told you so !"

Wed, 05/15/2013 - 17:01 | 3566436 francis_sawyer
francis_sawyer's picture

Let me... once again... post what I've posted for 3 years now...

~~~

There are TWO broad categories of francis_sawyer 'HATERS' out there...

Ummm ~ Now that 'ShooooooMER' has weighed in upon ONE of those categories... What say ye now?...

~~~

as always... as is always the case with these things... ALL HILARITY ENSUES...

Wed, 05/15/2013 - 18:51 | 3566908 thisandthat
thisandthat's picture

Freedom means nothing if you can't use it.

Thu, 05/16/2013 - 15:32 | 3570415 MeelionDollerBogus
MeelionDollerBogus's picture

Your hollow argument sounds like this: angry elites who already enslave you will just keep enslaving you if you refuse to comply with their unlawful orders to steal your property or your life, therefore to ensure your safety you should welcome the boot heel upon your neck. I don’t think so. And bitcoin WON’T get you out of that either. Gold will, and various defenses & evasion tactics INCLUDING moving between countries… perhaps frequently.

Wed, 05/15/2013 - 16:44 | 3566381 A Nanny Moose
A Nanny Moose's picture

Malware. You could be onto something. However, I wouldn't want a digital currency when that creature returns to the village.

Wed, 05/15/2013 - 14:23 | 3565681 Againstthelie
Againstthelie's picture

They don't need to lobby, they need a brain.

How can any sane person be that stupid to believe, that an electronic currency that depends on a working infrastructure, will not be shut down by the globalists, as soon as it fits?

 

There is only ONE asset, that allows to escape from the system: GOLD.

Wed, 05/15/2013 - 14:32 | 3565720 James_Cole
James_Cole's picture

There is only ONE asset, that allows to escape from the system: GOLD.

* laughter *

Wed, 05/15/2013 - 14:51 | 3565811 Againstthelie
Againstthelie's picture

laughter != argument

 

But it says a lot about the bitcoin pumpers...

Wed, 05/15/2013 - 14:54 | 3565838 dizzzave
dizzzave's picture

1933 - Executive Order 6102

Wed, 05/15/2013 - 15:45 | 3566114 toys for tits
toys for tits's picture

Good thing we're not under that order anymore.

Additionally, court challenges established the precedent that it was unconstitutional to incarcerate anyone that failed to turn over gold.

All that is irrelevant though, since now court's can 'persuade' anyone to do anything, including paying debts, by incarcerating a person through the contempt powers that have been established.

Wed, 05/15/2013 - 16:47 | 3566395 A Nanny Moose
A Nanny Moose's picture

Boating Accidents 101

Wed, 05/15/2013 - 15:03 | 3565883 Saro
Saro's picture

Luckily, there is no method for and no history of the government confiscating gold, or your belief would be totally undermined.

Wed, 05/15/2013 - 15:17 | 3565921 James_Cole
James_Cole's picture

Luckily, there is no method for and no history of the government confiscating gold, or your belief would be totally undermined.

Even that is a minor point, what goldbugs never reconcile is where gold comes from, what controls the price & who produces it. Not to mention what its history has been. 

If, let's say for example, every gold mine on earth was funded by banks and recieved permits from .gov it might take away from the idea that gold exists in a magical place 'outside the system.' 

Wed, 05/15/2013 - 18:57 | 3566943 thisandthat
thisandthat's picture

You just need every ".gov" in every producing country to be in agreement for that to happen - "luckily" that's an easy feat, right?

Wed, 05/15/2013 - 17:55 | 3566616 Ident 7777 economy
Ident 7777 economy's picture

 

 

 

Saro:

 

" Luckily, there is no method for and no history of the government confiscating gold, or your belief would be totally undermined. "

 

As if this needs to be added: /sarc

 

Thu, 05/16/2013 - 15:26 | 3570390 MeelionDollerBogus
MeelionDollerBogus's picture

-1 : there’s no history of world confiscation. Merely escape any nation that has a history of taking your property (not just gold). That means America should be abandoned.

Wed, 05/15/2013 - 14:24 | 3565684 malikai
malikai's picture

I find the fact that fatherland security is shaking down gox most unsurprising.

Anyway, if you ever needed a sign that something actually stands for freedom, that's it.

Wed, 05/15/2013 - 14:41 | 3565762 insanelysane
insanelysane's picture

Bitcoin et al will be made legal when there is a transaction tax in place.  The TBTF bankstas will pay no transaction tax on their HFT manipulation of the market though.

Wed, 05/15/2013 - 16:25 | 3566298 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Lots of misinformation swirling around. Bitcoin trades are already taxable as barter. "Legal tender" laws apply only to the payment of debts; people are allowed to use anything in a "transaction" (barter, etc) so long as the parties agree. You must declare a dollar value for the transaction and declare it as income.

Thu, 05/16/2013 - 15:24 | 3570376 MeelionDollerBogus
MeelionDollerBogus's picture

Ya, if you exchange a handshake for a tire change with a neighbor you have to declare a dollar value on it. Seriously. They can go fuck themselves but the unlawful IRS decided it is so.

Wed, 05/15/2013 - 16:21 | 3566273 The_Dude
The_Dude's picture

"Bitcoin community needs to start lobbying,” he says.

 

Read between the lines ---  " Someone needs to start shoving Benjamins in my pocket to distract me"

Thu, 05/16/2013 - 06:36 | 3568165 The_Small_Lebowski
The_Small_Lebowski's picture

the Bitcoin miners control the worlds most powerful computer network. Massively more powerful than all the supercomuters in t he world combined. IF these guys decide to break bad - all that power is one hell of a force to be reconed with!!

 

Thu, 05/16/2013 - 15:21 | 3570358 MeelionDollerBogus
MeelionDollerBogus's picture

FAIL. The most powerful subnetworks & computers are in the hands of government, bought with freshly printed money. The larger world internet has no single INTENTION to attack one party, only to defend itself, and bitcoin is NOT ONSIDE with this, it is merely a small parasite on the host for now.

When infrastructure for the network & invention of new devices for it are sourced using bitcoin - unlikely - then maybe that can change. Today is not that day.

Wed, 05/15/2013 - 15:27 | 3566016 SunRise
SunRise's picture

This is news!  I wasn't aware that Federal Investigators made requests.

Wed, 05/15/2013 - 14:19 | 3565660 Midas
Midas's picture

How long do we have to wait to find out what the charges against Mt. Gox are?

As a Bitcoin miner/user, I have been saying for months now that Bitcoin's biggest problem will be success.  Just like napster.

Wed, 05/15/2013 - 15:10 | 3565925 LostAtSea
LostAtSea's picture

Midas, quite brave in these times to admit to being a miner.  watch your back

Wed, 05/15/2013 - 15:34 | 3566062 Midas
Midas's picture

Dean: Nothing could be finer than to shack up with a minor...

Frank:  HOLD ON!  What did you say?  Minor?

Dean: No, no, you misheard, miner, like coal miner...

Wed, 05/15/2013 - 20:33 | 3567353 TeMpTeK
TeMpTeK's picture

bitcoins are purchased with fiat and eventually have to be converted back into fiat... absent the bank overlords approval, bitcoin will become blipcoin.

Just sayin

Thu, 05/16/2013 - 15:17 | 3570326 MeelionDollerBogus
MeelionDollerBogus's picture

Actually bitcoins don’t need to work that way but greedy fucks who want to get rich quick insist on using it this way which ensures bitcoin will not work long-term. These users don’t want it to – they seek fiat for fiat with btc in the middle as some magic multiplier.

Wed, 05/15/2013 - 20:53 | 3567397 kchrisc
kchrisc's picture

Already is, or is about to be. It's called gold and silver.

There is a day coming when you will be pulled over and asked if you are carrying any PMs--contraband.     hujel

Thu, 05/16/2013 - 15:16 | 3570315 MeelionDollerBogus
MeelionDollerBogus's picture

best be out of the countries in question before that day. I will be.

Wed, 05/15/2013 - 14:19 | 3565659 Rory_Breaker
Rory_Breaker's picture

After Napster came torrents. Bitcoin will give rise to something more disruptive?

Wed, 05/15/2013 - 14:33 | 3565725 booboo
booboo's picture

Goliath wrestles with a puddle of mercury, have fun with that; and oh Chuck Shumer, one last thing, eat a bag of dicks and die in a fire you fucking gun grabbing pistol toting two faced bung hole nuzzeling butt worm eating fag.

Disclosure: I don't own Bit coins.

Wed, 05/15/2013 - 16:25 | 3566296 SilverIsKing
SilverIsKing's picture

Schumer, not Shumer, although everything else I agree with.

Wed, 05/15/2013 - 16:26 | 3566301 acetinker
acetinker's picture

All hail the reincarnation of long-soup-line... bag of dicks... priceless!

Thu, 05/16/2013 - 00:35 | 3567942 Colonel Klink
Colonel Klink's picture

May as well add cock nozzle in there too.

Wed, 05/15/2013 - 14:28 | 3565701 Cursive
Cursive's picture

@Pladizow

Napster is not an unregulated, P2P site anymore.  Yes, it is a corporate owned music store and that's kinda the problem with bitcoin at this stage....

Wed, 05/15/2013 - 17:52 | 3566599 thisandthat
thisandthat's picture

P2P feeds off itself; bitcoin is nothing by itself (unless you can imagine an alternative ebay, where people trade goods for a noncorvertible currency)...

Wed, 05/15/2013 - 22:10 | 3567613 Banjo
Banjo's picture

napster did eventually get shut down.

replaced by peer to peer sharing

Wed, 05/15/2013 - 22:10 | 3567615 Banjo
Banjo's picture

napster did eventually get shut down.

replaced by peer to peer sharing

Wed, 05/15/2013 - 22:10 | 3567616 Banjo
Banjo's picture

napster did eventually get shut down.

replaced by peer to peer sharing

Wed, 05/15/2013 - 22:10 | 3567617 Banjo
Banjo's picture

napster did eventually get shut down.

replaced by peer to peer sharing

Wed, 05/15/2013 - 14:28 | 3565697 Kaiser Sousa
Kaiser Sousa's picture

speaking of that banking/wall stret fuck Schumer....

 

"Perhaps what is more surprising is that the largest single recipient of donations from high-speed trading is Illinois Republican Senator Mark Kirk.

 

While Kirk does hail from a state that is home to the CME Group and sits on the Senate Banking Committee in charge of overseeing the issue, he has publicly said very little if anything on the topic of high-speed trading compared with some of his other Senate colleagues.

 

By contrast, the lawmaker who has received the second-largest chunk of change from high-speed trading firms - New York Democratic Senator Charles Schumer - has been very vocal."

http://www.reuters.com/article/2013/05/13/us-campaign-highspeedtrading-idUSBRE94C0RG20130513

Wed, 05/15/2013 - 15:03 | 3565879 redwater
redwater's picture

Need to get Sprott, Schiff and Faber on board.

bitcoins needs to be redeemable in Gold and Thai hookers.

Thu, 05/16/2013 - 15:12 | 3570303 MeelionDollerBogus
MeelionDollerBogus's picture

“to be redeemable in Gold and Thai hookers”

If you can pull that off, bitcoin will for sure sink the dollar. No question. You’ll have Congress on board immediately, if silently.

Wed, 05/15/2013 - 20:28 | 3567330 Buck Johnson
Buck Johnson's picture

They can't allow people to get out of the system can they.

Wed, 05/15/2013 - 21:16 | 3567473 kill switch
kill switch's picture

Would you really let him do that????

Wed, 05/15/2013 - 14:04 | 3565595 HedgeAccordingly
Wed, 05/15/2013 - 14:05 | 3565599 SDRII
SDRII's picture

Duly note that it was none other than the FT's resident shill - oil is overpriced; gold is the barbarious relic and Bitcoin should be regulated - Izzy that "broke" the idea

Wed, 05/15/2013 - 14:09 | 3565617 SDRII
SDRII's picture

And from 2009's Mavercon - William Buiter now Citi Economist

There are three practical ways to implement negative nominal interest rates.

(1) Abolish currency. This is easy and would have many other benefits.  The main drawbacks would be the loss of seigniorage income to the central bank.  There may be a ‘millennium bug’ type transitional problem, if a lot of bad programmers have written code that blows up when the nominal interest rate hits zero (taking the logarithm of zero or of a negative number has interesting consequences), but all that means is a couple of wasted weekends at the office re-writing the relevant code.

(2) Tax currency and ‘stamp’ it to show it is ‘current on interest due’.

(3) Unbundle currency from the unit of account. This ideal goes back at least to Eisler (1932), was drawn to my attention by Stephen Davies in 2004 and has been formalised by me in a couple of papers since then.[3] The basic idea is simple.  In an economy where the dollar is the unit of account for price and wage contracts and most other market transactions, the fact that the currency is also the dollar (that is, the fact that X dollars worth of currency purchases X dollars worth of short-term nominal public debt (or X dollars worth of reserves with the central bank) establishes a zero lower bound on the nominal interest rate (what matters is that the exchange rate of currency and short nominal debt is constant, not that it is unity).

Thu, 05/16/2013 - 15:03 | 3570269 MeelionDollerBogus
MeelionDollerBogus's picture

math iz SRS BSNSS, sir. A rate of 0% is 1.00 factor, a rate of -1% is a factor 0.99. You can use log(x) on these values of x. An actual factor x=0 wouldn’t be a rate… it would be the real return in hyperinflationary currency collapse. No need to worry about the code in that case.

Wed, 05/15/2013 - 14:06 | 3565603 tuttisaluti
tuttisaluti's picture

When will they get it. You have to avoid the US financial system at all.

Wed, 05/15/2013 - 14:08 | 3565604 Cognitive Dissonance
Cognitive Dissonance's picture

"Because all is fair in preserving the FIATH..."

The high priests of fiat MUST stamp out any and all competition. Because even when fiat faith begins to falter the can.....um......can be kicked a bit further down the road by force of will......meaning at gun point.

<Anything is game when gaming the (willing) slave system.>

Wed, 05/15/2013 - 14:07 | 3565607 JJ McApe
JJ McApe's picture

doesn't matter. bitcoin was also bubbly as fuck... next bubble please

Wed, 05/15/2013 - 14:07 | 3565613 Never One Roach
Never One Roach's picture

'If you can't hold it, you don't own it.'

 

Repeat after me.....

Wed, 05/15/2013 - 14:15 | 3565645 Pure Evil
Pure Evil's picture

Oops, there went my penis, and she's a spraying all over the place.

Wed, 05/15/2013 - 20:14 | 3567290 Son of Loki
Son of Loki's picture

Amen, Roach. That's a good corollary to, 'If you don't hold it, you don't own it."

 

MF Global was one of the starkest examples.

Wed, 05/15/2013 - 14:08 | 3565614 Lost Wages
Lost Wages's picture

Whew! Dodged a bullet there. I had a Dwolla and Mt. Gox account being verified before I decided bitcoin was b.s. and I should stay away from it. Cancelled both accounts before using them and never looked back. Could have made money but who knows what will become of those who did. IRS audits?

Thu, 05/16/2013 - 15:06 | 3570283 MeelionDollerBogus
MeelionDollerBogus's picture

probably jail time. Look at Von Nothaus.

Wed, 05/15/2013 - 14:08 | 3565616 pods
pods's picture

They have bombed the shit out of nations to protect the petrodollar, not surprising that they would do this.

I mean, it is the government.

pods

Wed, 05/15/2013 - 14:10 | 3565620 Cognitive Dissonance
Cognitive Dissonance's picture

Have they no shame?

<No! Shame is for slaves. There is only one purpose of power. To use it. Period.>

Wed, 05/15/2013 - 14:15 | 3565642 pods
pods's picture

Exactly. Let's just hope that more and more people will start to realize that little gem.

And the more power is concentrated (The US empire is the most powerful in the history of the earth) the more those who WANT to use it gravitate to it.

The problem isn't who is in charge, the problem is that it is there to begin with.

We all have to do our part to see about reversing this slide.

Stop using debt, as that is their source of power.

pods

Wed, 05/15/2013 - 21:39 | 3567523 rustymason
rustymason's picture

The U.S. is Mordor and the Fed has the One Ring. Obongo is Saruman, and our military are the Uruk Hai.

Wed, 05/15/2013 - 14:10 | 3565621 Rudini
Rudini's picture

No doubt in my mind laundering goes on - who knows how much - probably more than one would imagine. So does that mean silver and gold trading can be shut down too? No way nobody is buying coin with dirty cash!

Wed, 05/15/2013 - 14:32 | 3565719 The Thunder Child
The Thunder Child's picture

Meanwhile the Cocain Importation Agency and their friends in the cartels continue to launder billions through banks like HSBC.

Wed, 05/15/2013 - 15:32 | 3566052 Buckaroo Banzai
Buckaroo Banzai's picture

"Money laundering for me, but not for thee!"

Wed, 05/15/2013 - 19:28 | 3567096 thisandthat
thisandthat's picture

At risk of repeating myself: protecting the monopoly...

Wed, 05/15/2013 - 14:36 | 3565724 A is A
A is A's picture

Money laundering goes on with the US dollar too. I am sure they will be shutting down banks real soon too. cough.... HSBC cough, cough! .......................

Only when it is expedient for them will we get Cyprused through the US dollars too.

Wed, 05/15/2013 - 14:10 | 3565622 A is A
A is A's picture

Great, Mt. Gox is down now too. Eric Holder is lying under oath and destroying the free market at the same time. Welcome to the new America. How any human being with two brain cells is not sick to death of this government yet is completely beyond me.

Wed, 05/15/2013 - 14:54 | 3565839 James_Cole
James_Cole's picture

Eric Holder is lying under oath and destroying the free market

There was a free market at some point in America? Must have been in the distant past. Has anyone ever pinpointed its existence? 

Welcome to the new America.

New America, same as the old America?

Wed, 05/15/2013 - 15:33 | 3566058 Buckaroo Banzai
Buckaroo Banzai's picture

Before 1913, markets were a lot more free. Before 1861, they were even freer.

Wed, 05/15/2013 - 19:28 | 3567094 ersatzteil
ersatzteil's picture

Magic the Gathering Online eXchange is always down.

Wed, 05/15/2013 - 19:50 | 3567191 Bangin7GramRocks
Bangin7GramRocks's picture

They just need that special wizard card that includes an invisibility cloak.

Thu, 05/16/2013 - 14:54 | 3570232 MeelionDollerBogus
MeelionDollerBogus's picture

ok, a series of MTG cards for handling money-laundering accusations and crooked law-makers and federal reserve ... this one is BEGGING for some banzai7 artwork

Charlie Sheen has one... why not bitcon? WINNING

Wed, 05/15/2013 - 15:41 | 3566094 XitSam
XitSam's picture

Just so we're clear, this was Department of Homeland Security that took this action.

Wed, 05/15/2013 - 21:04 | 3567440 dark pools of soros
dark pools of soros's picture

And to be clear it was Dwolla... Have you ever heard of Dwolla before bitcoins?

Many people just link a bank account to an exchange or a place like coin base that follows the laundering rules.

This isn't a big event. People are tired of high fee sites like bitinstant or Dwolla and even OKpay is a bit awkward.. Most of those are just used to move money between exchanges to chase arbitrage

Funny how so many people here comment and don't even have a clue of what is going on... Kinda like all the trader articles too, not many traders left here as well. Only old fucks spending their disability on a few pm's each month are left here

Wed, 05/15/2013 - 15:56 | 3566173 Overflow-admin
Overflow-admin's picture

May I give you some guidance? Search about neuronal reprogramming and/or brainwashing.

 

Oh, maybe you were just sacastic?

Thu, 05/16/2013 - 14:49 | 3570213 MeelionDollerBogus
MeelionDollerBogus's picture

O, I r shocked. What do you think “sheeple” means?

Wed, 05/15/2013 - 14:15 | 3565623 Aurora Ex Machina
Aurora Ex Machina's picture

Yep, guessed it would be using the Patriot Act III, sub C. US BitCoin holders are in for some fun times, as they're also personally responsible for said transactions. Note to self: should have researched & sourced it, not just guessed it.

 

(That's also one of the reasons PayPal is such a bastard regarding instantly freezing accounts, it's been used as a threat for ages)

Wed, 05/15/2013 - 14:50 | 3565804 Thisson
Thisson's picture

Doesn't look like any of these are applicable, because they pertain to bulk smuggling of "cash," "currency," "monetary instruments" and "funds" via "containers" from within a "State" to somewhere else. 

Doesn't look like transferring bitcoins falls within those proscriptions.  They aren't a recognized foreign currency, don't go inside containers, and aren't moving from within a U.S. state to outside of a U.S. state.

Full text of statute can be found here, with relevant text beginning at section 371: http://www.aclu.org/files/FilesPDFs/patriot_text.pdf 

Wed, 05/15/2013 - 15:04 | 3565841 Aurora Ex Machina
Aurora Ex Machina's picture

They moved $ < > $

The court document cites: 18 USC 981(a)(1)(A) in violation of 18 USC section 1960. 18 USC section 1960 was amended by the Patriot Act, so technically I think the PA now takes precedence.

 

I am willing to admit I'm misreading it (it was based on a guess and a gut reaction in a much earlier thread).

 

Section 1960 of title 18 of the United States Code, was amended by section 373 of the Patriot Act. Previously it prohibited and penalized illegal money transmitting businesses, but it now prohibits and gives similar penalties for unlicensed money transmitting businesses.[wiki]

 

 

Two junks & no rebuttal? Cute. I commented on all of this before I'd really read the story - see here. And nailed the details without reading the court document. Pretty accurate, imo.

Wed, 05/15/2013 - 21:11 | 3567463 dark pools of soros
dark pools of soros's picture

So many outsiders playing armchair trader... The exchanges and places like coinbase are following the rules.. Other types of conduits like bitinstant and OKpay have limits in place too.. Dwolla will probably comply too and be back in the game.. But there are more and more ways to exchange for bitcoins all the time

You can just find a local miner and pay cash if you like

Wed, 05/15/2013 - 15:30 | 3566022 Urban Redneck
Urban Redneck's picture

 

The Patriot Act isn't my bread and butter and I don't work in the US anymore but if the word "Monetary Intruments" is involved, then then 31 USC & 31 CFR come into play-

http://www.gpo.gov/fdsys/granule/USCODE-2011-title31/USCODE-2011-title31-subtitleIV-chap53-subchapII-sec5316/content-detail.html

§ 5312

 TITLE 31—MONEY AND FINANCE

(3) ‘‘monetary instruments’’ means—

(A) United States coins and currency;

(B) as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material; and

(C) as the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331, checks, drafts, notes, money orders, and other similar instruments

which are drawn on or by a foreign financial institution and are not in bearer form.

edit: the regulations prescribed by the Secretary would be in 31 CFR

 

Thu, 05/16/2013 - 14:46 | 3570197 MeelionDollerBogus
MeelionDollerBogus's picture

The exchanges all fall into that category. If you use btc to barter and no OFFICIAL cash (dollars, euros, yen, etc) is used then you may be in the clear. Check again though, laws change to suit the needs of the elite.

Wed, 05/15/2013 - 19:34 | 3567117 thisandthat
thisandthat's picture

Reason why I don't use paypal any more

Wed, 05/15/2013 - 14:12 | 3565628 nbsharma
nbsharma's picture

Loved the use of the word FIATH. Brilliant!

Wed, 05/15/2013 - 16:09 | 3566223 Shell Game
Shell Game's picture

I was going to say the same thing.  Great word:  FIATH.

Wed, 05/15/2013 - 14:12 | 3565629 Tinky
Tinky's picture

Just hope they don't come after your collectibles.

Wed, 05/15/2013 - 14:14 | 3565640 Aurora Ex Machina
Aurora Ex Machina's picture

A wise man would probably be reading the relevant sections of the Patriot Act wery wery carefully.

Thu, 05/16/2013 - 14:45 | 3570193 MeelionDollerBogus
MeelionDollerBogus's picture

a wise man would be leaving before the iron curtain closes.

Wed, 05/15/2013 - 14:14 | 3565637 Craxi
Craxi's picture

“I hate to say it, but the Bitcoin community needs to start lobbying,” he says. “It needs to start educating policymakers, lobbyists and influencers about the pros of Bitcoin and the impossibility or the difficulty in getting rid of all the bad uses.”

 

bitcoin should go all in and pay all lobbying fees re: bribes in Bitcoins..vertical integration

Wed, 05/15/2013 - 14:23 | 3565674 Ignatius
Ignatius's picture

+1 for a good smartass comment.

Wed, 05/15/2013 - 16:25 | 3566295 A is A
A is A's picture

Yeah, and I am sure we will be heard like a screaming ant at a Pantera concert!!!

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