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US Government Begins BitCoin Crackdown
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...
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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.
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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.
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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.
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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.
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“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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Get them Bitcoin terra-ists! Yew-ESS-AYY!!
WTF did I just see?! Infants on the floor of the United States Con-Gress... Children belong in cribs, not on the floor of the largest financial governing body on EARTH!
Nah, those were just fetuses splashing in the toliet before getting their spinal cords snipped at the Gosnel abortion clinic in Philly.
I hope that parasite burns in purgatory.
Probably NWO child sacrifices for after the event
You mean the government doesnt want conpetition from another fake currency???
Shocker!
Its not fake, it's a bunch of one's and zero's hanging out in the ether.
Seriously, who DIDN'T see this coming?
It's the methodology of it.
"The United States does not negotiate with terrorists". Victoria Nuland
Tyranny - nothing new from the Powers that Be.
I think everyone, including bitcoin enthusiasts like me, saw this coming. Bitcoin's true challenge has always been gaining traction in the face of an entrenched financial structure that will do anything and everything to get in its way.
I still think it will slay the dragon in the end, though.
It's fine and thriving.. The next big 'they're killing it, I told you so' moment will come next tax season as merchants all fudge the shit out of their bitcoin ledgers.. Stern words will make headlines for sure
Though I've never exchanged for some Bitcoin, I have always rooted for it for the sole reason that I knew the control freaks would hate it. Alas, there will be many victims before this mess plays out to completion.
The network is intact. It's just those pesky NODES. LMAO!
We are the Forward. You will be sssimilated. Resistance is futile.
If Chuck Schumer is against it I am for it without even knowing what "it" is.
As per usual our great and powerful dummies in washington have to put their filthy hands into everything! I'm not a fan of the bitcoin but is it not our right to invest "our" money any way we like! oh my bad, it is'nt "our" money! and by the way, eat shit and burp forever bernake!
You said OUR money, then corrected it.
1. Only Au & Ag are money.
2. Paper is currency.
3. THEY know it's THEIR money, 'cos THEY write the rules.
4. It's a big club, and YOU AIN'T in it. (George Carlin)
but but but its double hash, its a crypto currency that can not be tracked or cracked by the NSA, its totally secure...
Told you.
Have to eliminate competitors to the governments money laundering and drug smuggling operations. Lucrative business for Uncle Sam.
The latest news on this is that Mt Gox's US arm had a paperwork issue -- basically, at the time they opened the account two years ago they said they were not in the money transmitting or currency exchange business, which was true because at that time bitcoin wasn't viewed as such. The recent rulings on bitcoin by FinCEN changed that, but the account paperwork wasn't updated, and that's what they used to go after Mt Gox.
If this is the extent of what they have on Mt Gox, then 1) it's nothing and easily rectified and 2) impacts no other bitcoin providers (that have paperwork in order.)
So this looks a lot more like minor harrassment or even a gov't fuckup (Mt Gox was never notified to correct the account). At best this was designed to get headlines and scare people, and it didn't work too well considering how little the exchange rates moved.
They're getting sued for $75 mil for that "paperwork issue" (by a partner, not the USG), which was before this DHS stuff. That's quite some spin you're putting on the inept cluelessness @ Mt Gox. The rumor mill is going for the "Coin is politically connected, they've driven this" angle.
Popcorn is flying on HN, with accusations that a $25 mil bond has disappeared. Hardball indeed.
Full disclosure: I own no BitCoins.
In absolute terms- that doesn't sound like an insurmountable legal obstacle, but if Mt. Gox's legal department is as inept as their IT department, it could be their death knell. Perhaps they should outsource to Holder's former partners at Covington.
You belive that if you want.
A message was just delivered ,same as with the AP ..
They can destroy BC anytime they want.Last and only chance to get off
that train.BC vunerabilities are self evident, now design a system without them and
you may get somewhere..
You're an idiot
In Wiemar the police used to do raids and confiscate all foreign currency, even at bars and public places like that. LOL. Buy and bury folks. Pure desperation. If the fiat was worth anything, they would not care about Bitcoin.
...then they fight you. Then you win.
After the Weimar hyherinflation wealthy Jewish families that weathered the storm by preserving wealth in precious metals were able to buy up nearly bankrupt businesses for scraps. In 10 years they ended up taking over half of German industries. That's what got all the "patriotic" Germans so pissed. When the government was throwing propaganda on how it was good for the economy to print money and provide wages to striking workers while meeting WW1 reparation requirements, Jews bought none of it.
When the Nazi's came to power all they had to do is ride the public sentiment. Their message was simple: "Look who prospered while everyone else suffered!"
Instead of blaming fiat itself, monetary policy and the administration in power, they blamed those that resisted propaganda and got handsomly rewarded for it. The rest of the story you know well.
Enjoy your "digital confetti" while you can.
+1 Thank you. A sound lesson in history and something for all the “joo bashers” on ZH to think about. If you’re stacking gold you’re the next “joo” on the next “Hitler” list.
Fuck you Chuck Schumer!
Is it possible, that BBG is no more supporting bitcoin quotes? Was having hard time this morning gettin quotes via Bloomberg, probably I'm getting old
They are still trading at $113! I used Bitcoin for a year, this is a sky high price by any standards. I too saw this coming. I hold .17 bitcoin at present. Government is a fully functioning police state in service of a crony capitalism. Anyone who can not see that is blind. They demand control of everything except the elites crony institutions like the Federal Reserve.
There are already a number of alternatives to Bitcoin operatiing online and you can use to to business. Wonder how fast the Feds move against them?
This is ALMOST a "fully functioning police state", but they're working hard and making progress.
Within a few years, most posters here (and probably all the Tylers who haven't already flown the coop) will have heard a Knock-Knock-Knock at their door at about 1:30AM, followed within a second or two by their door breaking in and their living areas being filled with "law enforcement" officers to bring them in for questioning. Face it - you are a home grown terrorist for opposing their encroachment.
The IRS got it right, only a little too early. And, they're very sorry.
Bitcoin will survive even if America turns into North Korea
Hahahaha! And on the side of my screen I am getting an Ally Bank ad offering me 0.94% APY on a 1-Year CD. Who needs BitCoin when you can get 0.94% in interest for tying your money up for a year!
Tying it up in some government car maker piece of shit at that.
The idea of lobbying the government to allow a competing currency is ridiculous.
This has zero impact on those that hold their bitcoin in a local wallet and can buy/sell via localbitcoin.com or other P2P exchanges.
The moral of the story is don't use the major exchanges.
Bribing the politicians with bitcoin is a good shortcut. Once these politicians learn how this can hide their bribes, no turning back.
That was one of the first things that crossed my mind when I first learned about bitcoin.
winning! I thought of forcing it all back to barter via btc to keep it alive (not that I want btc but this is a logical route for its survival) but then again, getting politicians around the world accustomed to bribes in btc alongside diamonds, gold, whatever, will certainly make them look the other way.
"...Homeland Security Investigations (which among other things is responsible for enforcing the laws associated with money laundering and drug smuggling)."
I guess the news of them going after HSBC and shutting-down every U.S. branch is pending any second now, right?
HSBC is a primary dealer for the Federal Reserve so it's OK for them to launder money for Mexican drug lords and they used FRNs and not Bitcoins too!
http://en.wikipedia.org/wiki/Primary_dealer
Arrest Eric Holder. Oops there goes another waterbug.
502 Bad Gateway nginx/1.4.0
The Schumer hit the fan... again!
IS THAT ALL YOU GOT ON PM's YOU MOTHERFUCKERS? COME ON! RAPE EM' MORE! I GOT SOME BUYING TO DO YOU FUCKS!
I fear you will have plenty of opportunity the next little while.
This will teach the sheeple not threaten the bankers' currency or the so called Federal Reserve Note aka dollar!
DHS
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).
They did a great job with HSBC! /sarc
HSBC laundered Federal Reserve Notes and they did it in billions and they probably bought U.S. Treasury securities with these billions!
http://en.wikipedia.org/wiki/Primary_dealer
Are the new 2013 nickel coins made from the new alloy or are they still copper/nickel?
They will not contain any nickel. I think they will be made of stainless steel. Not too sure.
This might help:http://beforeitsnews.com/survival/2012/11/2013-coin-debasement-formally-...
There's an Indian magnate who'll be suggesting this for the Euro (Southern Mint Edition) very soon.
Lol, bitcoin will survive this. It was anticipated by most that the governments would try to crack down on it, but going after the nodes of the P2P system is an ultimate fail. The only reason this hurts bitcoin is because MtGox is such a huge percentage of the liqidity for bitcoin right now.
In five years from now, people will still be mining bitcoins and selling them peer to peer. And a bitcoin will likely be well over $200 each.
BITCON code will continue to function but purchasing power will decline. The fair value is probably around $3 per btc not $200. People don’t get paid in btc. People don’t buy goods in btc. BTC will be marked as terrorist money around the world. You may as well be bartering dime baggies of meth depending on the jurisdiction. Same argument: meth won’t stop doing what it does but TRYING to use it for its intended purposes and/or as a unit of money will land you in a heap of trouble.
Somewhere is Stacey is holding Max's hand with a lok of understanding and saying "there, there....."
Who didnt see this coming?
Looks like the govenment has another fire to put out...
Their screwup? Calling bitcoin "currency".
If they called it a "collectable", like coins sold on ebay, no problem.
It is a collectable for all practical purposes and should be viewed as such. It doesn't trade on forex. Its value rises and falls dramatically, unlike a currency, more like a collectable.
It's more like gold and silver, both viewed as collectables.
There's one "official" currency in America. It's the currency taxes are payable in. It makes sense govts wouldn't want some "alternative currency" not issued and controlled and tracked and taxed by any government. They natually see it as possible (untaxed) competition to their currencies. It's why they keep a lid on gold & silver.
Merchants accepting payment in bitcoin will only make the problem worse. Most merchants are govt-controlled corporations who must take payment in the govt currency for accounting and tax reasons. Bitcoin is "off balance sheet" more or less. Taxes aren't reported and paid on it, and that's a big issue with govt.
We all know taxation is the core issue govts get fussy about. Bitcoin payments for goods & services aren't reported as income and taxes paid. It's less about the "currency" aspect and more about the reporting and paying taxes aspect. It would be the same case for a merchant accepting physical gold & silver in payment.
And like physical gold & silver, there's no electronic record in the banking system govt can subpeona for tax enforcement reasons. It's the big attraction of bitcoin, just like it's the big attraction of physical gold & silver, and any other payment method outside the govt controlled banking system, including physical cash.
So no, I don' think it's the "currency" aspect so much. It's operating outside the govt controlled banking system, whether it's bitcoin or gold & silver coins or physical cash. Govt wants to shut down all these methods of operating outside the govt controlled banking system, and is why I believe they'll push for cashless currency eventually, totally digital, like bitcoin is, but fully within the banking system under govt control.
Yes I believe bitcoin will be outlawed in America eventually. Using bitcoin will be a criminal offense. Since I believe that, there's no way I would get involved in bitcoin.
If ya'll ever do your "revolution" and stop all this govt control, I still wouldn't get involved in bitcoin, there would be no reason to, whatever currency is used wouldn't be tracked and taxed.
Of course I don't think we'll ever see that.
If Marx called Marxism a religion, the US would be waging wars for the right to be communist.
I think it's a good news,
bad news story.
The bad news is, you have to use
the currency existing at sufferance
to immunity from loss taking, with your
savings income of course disallowed
now for going on 5 years.
What does Mr. Schumer call buying
mortgage securities not at market value?
The good news is, there's no cotton
involved, no cooking on the back of hoes.
http://www.kissmybroccoliblog.com/wp-content/uploads/2013/04/Pancake-Porn.jpg
The gov. is a one trick pony. They just put out the label "money laundering" or "pornography" for the sheeple to understand. Like the gov. isn't money laundering or counterfeiting? They outright steal and then counterfeit any excess they need. BTC entities need to be outside the USSA. It's that simple.
Maybe MountGox and ZH should relocate to Sealand!
Freedom - the next 'Killer App"!
http://www.wired.com/wired/archive/8.07/haven.html
Bitcoin = Poker Stars Bitchez!!!!
Silk Road, Bitchez!!!
yep, 2007 I and others had our silver and gold stolen from us by the Feds, from an organization called Norfed, Liberty Dollars.
I have not received my property back nor any letters or contact that they have my property.
Bernard von Nauthaus was convicted over a year ago and yet to be sentenced. Railroaded.
No problem...its out in the ether, etheral money, its coded and all, very safe.
Its not like they have to send out troops to every house and...oh...never mind.
when in rome?????
IRS Commissioner: ‘Rogue’ employees were ‘off the reservation’
http://newsfixnow.com/2013/05/15/irs-commissioner-rogue-employees-were-o...
There is almost nothing they can do about Silk Road. Someone has been peppering them with DDoS attacks lately. They manage to delay service for maybe a day. That's pretty much all they got. Maybe, just maybe, they can get some root based remote keyloggers or a FinFisher type exploit on some of the people that visit the site and then go after them. IDK. But, remember, if you are using a Linux OS do not believe the hype. Your system is susceptible. The benefit of Linux is there are no "built in" backdoors and the code is open source. It is still your responsibility to monitor your own system.
Why would they need any of that if a key point is all bitcoin transactions are traceable?
They aren't traceable, and by that I mean there's probably a few ways, but they require too many resources and personnel. Easier to just shut it down.
Silk Road provides "wallets" to accounts. The accounts themselves have no email or personal data attached to them. Bitcoins are manually sent from one's normal account wallet to a wallet that's attached to the un-traceable Silk Road user account on the anonymous Tor network. When the user buys something, the exact advertised cost is withdrawn from the user's Silk Road wallet and sent to the vendor's Silk Road wallet. The buyer specifies a delivery address and the transaction is finalized.
There was a video linked here where a guy was promoting bitcoin on a tv show by stating that every transaction was absolutely traceable.
They're completely and easily traced and you better count on everyone who has kept the same MAC address and kept using the same physical lines to connect to all get arrested very shortly.
Fonestar.... paging Mr. Fonestar
*crickets*
He's probably done trying to educate you morons - this site goes for years waiting for something like bitcoin to take hold and the majority just shit on it... Just bury you fucks. Most of you don't have hardly any gold either.. Just miserable debt slaves hating on any prosperity
It's just a coinky-dink that silver's taken a beating also.........
can't have alternative currencies, viable or not.....
stacked about 17.5 more lbs at $24 oz.
Shitz gettin hard to hide.......need to move pronto and get a large gunsafe mounted into sum 4200 psi crete w/t #8 bars..........about 10 CYs should do it by my estimation, my design will make it hard fo' a 'hoe to get it out......
That’s why gold balances silver in stacking: gold is smaller to store, lighter to carry, silver for the bartering. There’s little need to have DOZENS of pounds or kg of silver unless you plan to be entrenched. I think entrenching aka “bug in” is not smart in America, Ireland, Iran, Syria, France, Russia or anywhere in the middle East. Depends on your armaments & walls.
Precrime.
Maybe someone could use BTC to launder, so we need to shut it down, in case that should happen.
You may cause an accident if you are driving too fast, so you get a traffic ticket.
The United States of Schumer! Whee!
Arrest! Imprison! Regulate! Stop the fucking peasants - they've just realized that income tax goes directly to private banks!
Shut down the internet!
Schumer! Help me build prosperity by taking more of my labor! Whee!
And the tin hat glows...
EDIT: My hat.
Everytime one has to, or need to "ask permission" from any external entity then you're already screwed!
There is no escape. There's no place to hide. Your owners will do everything in their power to take every last drop of wealth from you and transfer it to themselves.
http://www.youtube.com/watch?feature=player_embedded&v=1Kw52mG1EzU#! John Lennon 9 min discussing what his views (maniacs are in charge)
The irony of it all is just astounding...
They seize money from an exchange that deals in a currency that they cannot seize...
Government theft is... doubleplusungood. :P
And they constantly call you "Sir" while they disrespect you, threaten your life, liberty, and property if you do not comply with their every whim. It's just another gang. A great big gang.
Do you recall my postings referring to Bitcoin as Bitcom? Who wants to make a gentleman’s bet that AMZNs new digital currency passes the FED’s litmus test?
glad I closed that gox account last year. after I got goxed twice.
goxed again!