Latest posts by Alvin Bryan (see all)
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- BitLicense Will Allow Bitcoin Spying in New York - October 22, 2014
- Australians are Fighting Data Retention Laws - October 22, 2014
The crash of Mt. Gox has certain lawmakers proposing a Bitcoin ban. The reason behind this push is that, they claim, Bitcoin is dangerous to the US economy. The Mt. Gox incident certainly has many depositors and legislators on alert. But a Bitcoin ban may not be the answer.
Mt. Gox Crash
The Tokyo based Bitcoin exchange is among the businesses being investigated by the US attorney’s office. The legalities of using and trading Bitcoins have always been under scrutiny. But the recent crash of Mt. Gox, now off the radar, has caused quite a stir. This popular exchange is rumored to have lost USD 400 million worth of Bitcoins due to cyber attacks. The money is documented as missing, and many believe that it is due to hacks.
But not everybody thinks that the Mt. Gox crash is a bad thing. Barry Silbert, CEO of SecondMarket, is one who says that it highlights that the US needs to regulate Bitcoin exchanges. He is also building Bitcoin Investment Trust in the country. He says that in his exchange, people will not buy their own Bitcoins. Instead, Bitcoin businesses, investment firms and banks that are regulated will help people manage their accounts. This will better secure the investments and prevent a fiasco similar to what happened with Mt. Gox. Regulators will have to work faster to develop policies that will protect Bitcoin investors in the future.
Bitcoin Ban Proposed
Virginia Senator Joe Manchin’s letter called out Bitcoin as being a disruptive element in the economy. He identified the virtual currency’s use in speculative gambling and illegal goods traffic as reasons. The letter, sent to regulators last Wednesday, hoped for cooperation to impose a Bitcoin ban. Regulatory agencies are now on high alert regarding the currency. Delaware Senator Tom Carper is not officially supporting Manchin’s move for this Bitcoin ban, but is known to be in favor of tightening controls. He found the currency favorable when he held a hearing on it last November. But early this week he called the Mt. Gox incident unacceptable. He commented that his aim is now to take steps to make certain that a similar crash does not happen at home.
Other groups have also been very involved in the debate over the controversial virtual currency. The Federal Trade Commission and the Consumer Financial Protection Bureau are looking more deeply into Bitcoin. And the Financial Crimes Enforcement Network (FinCEN) of the Treasury Department first issued guidelines on its use. These and other regulators are pondering the implications of a crash happening in the US.
US prosecutors investigate businesses dealing in bitcoin
What happens when a bitcoin exchange collapses
Anonymous hackers uncover alleged proof of MtGox fraud from site’s CEO
Japan rules on bitcoin, says it’s not a currency