Wednesday, May 15, 2013

Are The Feds Just Cracking Down On Mt. Gox (Not On Bitcoin)?

So says Forbes staff reporter Kashmir Hill:
When I tried to buy my Bitcoins from Mt. Gox, Bank of America refused to send a transfer to the Japanese account; I used U.S.-based Coinbase instead, which recently nabbed $5 million in venture capital funding from Union Square Ventures and which is, reassuringly, registered as a money transmitter with the Treasury Department.

It’s important to note here that Homeland Security is not cracking down on Bitcoin itself, just on how it’s being exchanged by Mt. Gox. This is actually good news for Mt. Gox’s US-based competitors, such as Seattle-based CoinLab and San Francisco-based Coinbase, Bitcoin exchanges that have registered with the Treasury Department as money transmitters and thus are in the legal clear to conduct Bitcoin <—> $ exchanges.

Mt. Gox’s legal troubles don’t seem to be affecting the value of Bitcoin, which has been hovering in the $115 range for the last week.
Thus the question becomes: Do the Feds only want to crackdown on Mt. Gox or is Mt. Gox just an easy target and there will be more USG harassment come?  My guess is we will see more harassment. USG does not want a competitive currency.

1 comment:

  1. But wait, bitcoin is going to bring down the Man, right? Maybe not... Just goes to show that until the political system is fixed, it doesn't matter what monetary scheme gets cooked up. Sound money? End the Fed? Uh huh...