Bitcoin to be ruled illegal as of May 1st | Hacker News Reader

Bitcoin to be ruled illegal as of May 1st

6 pointsMarkTanamil14 comments

Those who have recently invested in Bitcoin might be in for a shock when they find out that the federal government bureaucracy FinCEN is poised to stamp out all trade of the digital currency.<p>Currently Bitcoin is legal to use, however “miners” have to register as Money Transfer Businesses by applying for a government license. Since the original announcement from FinCEN no miners have coughed up the necessary funds or even applied for a license, and as a result FinCens stance on Bitcoin has changed for the worse.<p>As of May 1st, participating in the exchange of US dollars into Bitcoin will be in breach of the bank secrecy act and liable for prosecution.<p>This is bad news for any Americans that are currently in possession of Bitcoin since converting it back into US dollars is effectively illegal.<p>Additionally FinCEN has teamed up with the White House Office of National Drug Control Policy (ONDCP) in order to track down people that have been purchasing illegal drugs through the hidden Silkroad website. Dan Restrepo in the White House said “We have been monitoring the [Silkroad] website ever since it first came online. Our technical experts have managed to track down the location of the site. We are just waiting on an application for a European Arrest Warrant before it can be shut down for good.”<p>Steve Hudak of FinCEN added “Until now due to the nature of Bitcoin it had been extremely difficult to track down people that had been using it to purchase illegal goods. Now that we have been given full access to all data held on the exchanges it is a simple case of linking the Bitcoin addresses to the identities of the accounts.”

Years ago, I had occasion to visit the offices of FinCEN with an official from China as part of a people-to-people exchange between China and the United States. (I was there as the Chinese official's interpreter.) This was well before 9/11, but already back in those days, the various governments of civilized countries were coming to understand that international money transfers can not only facilitate good things like licit international trade, but also international crime and even terrorist networks.

Then and now, the issue is how to strike a correct balance in regulation. No country wants to be part of international agreements that regulate it more than some competing country is being regulated, but every national government sees some benefit in being part of the community of civilized nations. (Even North Korea doesn't violate ALL norms of international conduct.) Facilitating international transactions is beneficial to everyone in general. Keeping track of the activities of criminals is also of general benefit to everyone. The financial regulations, which are quite detailed, are based on international agreements and are influenced by quite a lot of push-back from various national governments.

A while ago here on HN I wrote that perhaps the greatest contribution the Bitcoin experiment will make to humankind is to teach you and me and our neighbors more about the realities of economics. Particularly, the Bitcoin experiment will contribute to greater understanding of international financial regulation and the mutual tracking of transactions engaged in by all countries all around the world. Many of the ideas about Bitcoins as a medium of exchange different from national currencies illustrate both the strengths and weaknesses of any other medium of exchange in a world full of human beings. Some transactions will be of interest to national goverments around the world, whatever the medium of exchange, and those governments will decide, based on joint national interest, which sorts of international transactions will be permissible. I venture no guess, until a regulation is published for public notice and comment, what the regulations will be about Bitcoin transactions going forward, but you can be sure that governments are following the Bitcoin phenomenon closely and weighing the pros and cons of different regulatory trade-offs.

This seems like a hoax.

Can anyone present a source to confirm or deny this?

This is a hoax. One drawback to BTC is the entire Bitcoin community is full of scam artists. Like this poster, who tries to do things like influence public sentiment to move the markets in a direction that benefits them. You see this kind of thing a ton on the bitcoin message boards, where they post "Guys! I heard that such and such is happening. Watch out!!! Your BTC is going to be worthless soon!!" or they just post fake articles without attributing a source to them.

It's weird but for some reason that community is full of enough people who tolerate this kind of thing and even fall for it that it made me sick of Bitcoin. I like the idea behind BTC but the sleaze factor was too high for me to stick around.

In the end this could actually serve to strengthen the currency, if their is huge signal-to-noise ration it may make people cynical to news about the currency in which case it could stabilize it in time of true crisis as the little boy could have cried wolf too many times. That being said, it's not like the same issue is not present in traditional financial markets its just that the club of people that can affect the market in their favor is fairly exclusive. As well over time their strategies had to become more sophisticated.

What doesn't kill bitcoins makes it harder.

New currencies bring these types of people. It's ok. We get to filter them in time. It's like porn and new media: if it's not porn on it, it doesn't have enough users.

I believe this is a hoax and a waste of energy on part of the poster. there is no evidence to support such a claim.

If a large part of the world adopts bitcoin and the protocol proves itself, the US would be shooting itself in the foot to not participate or try and control it.

This person also posted it on a very new reddit account (less than a day old!).

http://www.reddit.com/r/Bitcoin/comments/1b6nmq/bitcoin_to_b...

Beautiful example of copy-paste mass scams. This was also posted on reddit a few hours ago. Somebody is up to something very childish with this.

To the OP: post sources to back-up your claim, please.

http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G0...

That document came out over a week ago and it creates regulations.

you have to close <p> tags, also html doesn't work on Hacker News

is this for real?

Yes, it's true: HTML does not work on hackernews.

No it isn't, - check out his username: one single submission - def a hoax.

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