Friday, April 26, 2013

REPORT: Several Bitcoin Businesses Have Had Their Bank Accounts Shut Down

FT takes a snarky swing at Bitcoins:

There are many reasons to doubt the monetary value of Bitcoin, the virtual currency whose exchange rate has been gyrating wildly this month, but no one can deny its comedy value.[...]at the New York branch of the Federal Reserve, which held a gathering this week for some of the grandees of financial regulation. When one person asked if Bitcoin could become a viable unit of international exchange, participants burst out laughing.
Of much greater concern for bitcoin holders, FT also reports:
In recent weeks, several Bitcoin businesses have had their bank accounts shut down, suggesting traditional banks are getting worried about enabling the currency. It comes on the heels of a ruling in the US that all businesses that exchange or transfer virtual currency are “money services businesses” and must register with the government and introduce money laundering checks and training for staff. 
BitFloor, a New York-based exchange, shut down after its account was closed. In Canada, Ottawa-based broker Canadian Bitcoins has had two of its four banks shut down.
James Grant, founder of Canadian Bitcoins, says he was given no clear explanation why his banks abandoned him.

The big crash comes when MtGox gets harassed or closed by regulators.


  1. No one that uses bitcoins thinks they are money Wenzel.

    You don't seem to have a firm grasp on BTC. You have some sick hope that they fail. It's like you are cheering for it to go totally under.

    Bitcoins are one of the biggest leaps in freedom since the internet itself. It's THE ONLY WAY in the world right now (with any reasonable scope) to buy goods and services ANONYMOUSLY. You can't do that with dollars, you can't do it with gold, not half way across the world anyways.

    The common man now has an easily accessible way to deal outside the realm of the government totalitarians.

    Stop cheering against them.

  2. More power to BTC... BUT it is a public service to warn novice investors when they are going to get killed.

  3. Derrick: Exactly. BTC is awesome not because it's a monetary store, but because, at least for now, you can use it as a proxy for money and government can't get in the way. Further their only way of blocking it is at the point of exchange, of which there are hundreds of ways of getting around.

    This is the best thing to happen to freedom since the federal reserve act put us all into bondage to the banks.

  4. If BTC is never convertible into dollars/euros/yen etc. they will be used as a stand alone currency. People will buy and sell in a eco-system just like the Apple eco-system is different than PC or Linux. They can exist just fine by themselves. Anonymity will always be desired. As to convertibility, people can just buy gold coins or any commodity with their BTC and then sell/convert that, or any commodity purchased with BTC, to gov't issued "currency". Pirate Bay or bit torrent sites cannot be stopped and neither can bit coin for the same reasons.

  5. If nothing else, for now, BTC is a way to thumb your nose at the State, which clearly hates and fears non-USD currency. And there's great promise in the future. Monetary techno-theorists are already collaborating on the next innovations which shall defeat our money monopolists. Bitcoin protocol will be addressed, as will conversion. The Ripple protocol sounds pretty exciting. We libertarians have good reason to be naturally suspicious of currencies we cannot hold in our hands, yet who knows where technology can take us? What if crypto currency could even someone develop into notes reprenting hard money?