The US Regulatory Vice Closes On Bitcoin

The US Regulatory Vice Closes On Bitcoin (ZeroHedge, May 6, 2013):

Just six weeks after the US Treasury decided enough-was-enough with this upstart non-fiat, non-controlled-by-TPTB currency (and applied money-laundering reglations), US financial regulators are now looking for supervisory control over Bitcoin. As The FT reports, CFTC’s Bart Chilton notes “it’s not monopoly money – real people have real risk in these instruments,” and  that regulating the controversial cyber-currency “is sure something [CFTC] needs to explore.” Chilton’s remit to regulate this “shadow currency” is predicated on it becoming a basis for derivative contracts as opposed to purely transactional (akin to the monitoring of physical oil transactions that can influence crude futures.) Since the Treasury’s March decision, at least three North American companies have had their accounts seized by the banks but while this attempt to control the virtual currency follows the ECB’s ‘ponzi attack’ last year, the ‘regulators’ may note that, “even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn’t mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency.”

Via The FT,

Senior officials at a top US financial regulator are discussing whether Bitcoin, the controversial cyber-currency, might fall under their regulatory remit.

Bitcoin “is for sure something we need to explore”, Bart Chilton, one of the five commissioners at the Commodity Futures Trading Commission (CFTC) told the Financial Times. A person familiar with the CFTC’s thinking said that the regulator is “seriously” examining the issue.

Since the ruling, at least three companies in North America have reported having their business accounts closed by their banks. Bitfloor, a New York-based Bitcoin exchange, said it was shutting down entirely, and it has not yet been able to return funds to customers.

“Even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn’t mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency,”

CFTC jurisdiction generally does not extend to cash markets unless exchanges list derivatives contracts based on them. For example, the agency monitors physical oil transactions insofar as they influence crude futures traded on the New York Mercantile Exchange.

“In essence, we’re talking about a type of shadow currency, and there is more than a colourable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction.”

1 thought on “The US Regulatory Vice Closes On Bitcoin”

  1. Of course. I am surprised they got as far as they did. Guess a few fat cats made some big bucks before they slammed the lid down. Remember Iraq and Syria? Their FORMER leaders called for the restoration of gold as the world reserve currency. We all know what has happened to them.
    Now, the US has a slightly bigger problem, called electronic currency. The guy who got it up and running is now dead. The South American Trade Alliance, headed by Hugo Chavez made it possible for member nations to trade with each other without converting first to the US dollar. It is known as the Sucre, and was launched in June of 2010. It was a small group of poor nations (including Cuba), and flew under the radar. Total GDP was half a billion a year. It was so successful, Russia and China jumped on the same bandwagon with their own electronic currency and trade agreement. India, Turkey, Japan, and many others soon joined.
    Within 18 months, the US went from the dollar used in 100% of international deals to 60%. The number is only going to grow.
    As usual, too little, too late. Incompetence in depth by our so-called leaders. The real major war is financial, and we are losing, thanks to a guy named Hugo Chavez. He is dead, but his system has ignited the world against the USA.
    So, go after Bitcoin.


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