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Bitcoin The Almighty Buck

Bitfloor Indefinitely Suspends Bitcoin Trading 291

Posted by timothy
from the fun-while-it-lasted dept.
PerformanceDude writes "Bitfloor (a New York-based online exchange for Bitcoin) yesterday made the following announcement on their website: I am sorry to announce that due to circumstances outside of our control BitFloor must cease all trading operations indefinitely. Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of USD deposits and withdrawals as we have in the past. As such, I have made the decision to halt operations and return all funds. Over the next days we will be working with all clients to ensure that everyone receives their funds. Please be patient as we process your request. Roman — bitfloor.com" According to the company's Twitter account, money should be returned to users' bank accounts shortly.
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Bitfloor Indefinitely Suspends Bitcoin Trading

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  • Re:A likely story (Score:5, Interesting)

    by localman57 (1340533) on Thursday April 18, 2013 @09:31AM (#43481851)

    Sounds like the govenrment finally decided they didn't like money outside their control.

    Maybe. Or maybe their bank just wasn't comfortable with them. Where I work we sometimes will pass on working with potential customers just because we get a bad business feel for them. Whatever bank they're dealing with may not want to risk being negatively associated in the press with any of a variety of bad things that could potentially happen with this bitcoin exchange if they aren't an important enough customer to justify that risk.

    The other thing I think is interesting is the degree to which this matters. The whole point of bitcoin is that it is supposed to be some independent currency. But it seems to rise and fall an awful lot depending on the degree to which you can exchange it for dollars. Which would tend to indicate that it does require backing at some level from dollars.

  • Re:A likely story (Score:4, Interesting)

    by Begemot (38841) on Thursday April 18, 2013 @10:34AM (#43482515)

    Same happened in Israel 2 weeks ago - all accounts of bitcoin exchange companies were closed until further notice. They didn't even give them a chance to return funds to their customers.

  • Re:A likely story (Score:4, Interesting)

    by Richard_at_work (517087) <richardprice.gmail@com> on Thursday April 18, 2013 @10:34AM (#43482521)

    It would be interesting to see how many people don't want bitcoin to be "controlled" by governments through legal avenues, but at the same time would want the law enforcement agencies to investigate any cases where bitcoin exchanges disappear overnight with their clients "funds"...

  • Re:A likely story (Score:4, Interesting)

    by h4rr4r (612664) on Thursday April 18, 2013 @11:02AM (#43482805)

    Disney dollars are not real currency, they are coupons.

    Try to get disney to convert them back to USD for you.

  • Re:A likely story (Score:5, Interesting)

    by ShanghaiBill (739463) * on Thursday April 18, 2013 @11:34AM (#43483183)

    you still end up holding the cash you had in the first place with no good explanation of why you had that wealth...

    There are plenty of reasons to be holding cash that you didn't pay tax on. For instance:

    1. Set up a shell corporation in a tax haven (e.g. The Cayman Islands).
    2. Transfer your IP assets (patents, copyrights, trademarks) to this corporation.
    3. Pay a license fee to this corporation for the use of that IP. Make sure the amount of the fee matches your profits.
    4. Pay no income tax, because you have no profit.
    5. Borrow the money back from the shell corp. Loans are not considered income and are not taxable.
    6. Life a nice life while going deeper and deeper into debt to yourself .
    7. Eventually you die, and all the debts are cancelled.

    Of course, this is not tax evasion because it is perfectly legal.

  • Re: Bubble (Score:4, Interesting)

    by ultranova (717540) on Thursday April 18, 2013 @12:50PM (#43483987)

    The problem here is that unlike stocks, there is absolutely ZERO value in a bitcoin. It represents exactly nothing of value. Stocks at least have a book value and a P/E Ratio of the company behind the stock. Bitcoins are backed by nothing.

    Bitcoins are backed by the utility of being able to send them between people without having to deal with any third parties. They present the value of everything that can be bought with Bitcoins; as that set is slowly growing, so is the value of Bitcoin. It's a classic network effect.

    To bet on Bitcoin is to bet that PayPal, Visa, and banks will continue screwing their customers, which seems like a pretty safe bet.

To communicate is the beginning of understanding. -- AT&T