Bitcoin Exchange Mt. Gox Halts USD Withdrawals 173
hypnosec writes "World's largest Bitcoin exchange, Mt. Gox, has halted U.S. dollar withdrawals of customer funds in the U.S., citing a need for system improvements. According to Mt. Gox, the exchange has experienced a huge number of requests for deposits as well as withdrawals from both established markets and new markets, following which its bank hasn't been able to process transactions on time. This led to difficulties for its overseas clients, especially those in the U.S. The exchange said that the deposits in USD, transfers to Mt. Gox, and deposits and withdrawals in other currencies will remain unaffected during this period. Mt. Gox will be resuming the USD withdrawals for its U.S. clients once the improvement of its systems is complete."
Wired suggests the slowness may be due in part to reluctance from banks to get entwined with Bitcoin for a number of reasons. "The problem is that U.S. banks are afraid that doing business with Bitcoin companies might draw the attention of U.S. or state regulators ... This reluctance may be fed by the sense that Bitcoin poses a threat to the banking industry. Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees."
Re:"That's what you get for money laundering". (Score:5, Insightful)
You seem to believe the banking industry is over-regulated.
because some fees have an actual purpose? (Score:5, Insightful)
holy fuck. you realize that transferring trillions of dollars to millions of people, requires a shit ton of people to do stuff?
yes the system is corrupt - bitcoin would take that corruption to the maximum level.
Threat ? Hilarious. (Score:4, Insightful)
The idea that banks are hesitating to do business with these exchanges because Bitcoin is posing as a "thread" is hilarious on it's face.
Ask any average person on the street what a bitcoin is and you will be greeted with nothing but blank stares.
People who use bitcoin and drive up it's value are living inside a reality distortion field of their own making. This supposed currency is going nowhere.
Re:"That's what you get for money laundering". (Score:2, Insightful)
Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme. Seems to me that if the banking regulations are keeping that sort of entity out of the market, they're doing exactly what was intended.
Re:thats what you get for being stupid (Score:2, Insightful)
The crash of 2008 was specifically due to regulation. The government thinking that banks we're not loaning enough money to people that were unlikely to pay it back so banks were given incentives to do so by regulation. This made for the artificial bubble in people getting cheap loans. Then as it turns out that these people were a bad risk as the banks estimated in the beginning and didn't pay loans back it crashed.
If there's a perceived problem with free market, government can usually guarantee there's a problem with regulation.
Re:thats what you get for being stupid (Score:5, Insightful)
I've heard this line of BS many times and it amazes me how many people buy into it.
It's a nice line that anti-government types like to pull out, and the only problem is that it ignores reality and gets it backwards. Banks basically paid off, through lobbying and "donations", both legal and illegal ones, enough members of Congress to get regulations RELAXED - as in, the law signed in 2000 that made Wall Street exempt from the "bucket shop" restriction. Great idea! Except that it was the biggest contributing factor to sinking the economy. The bad loans themselves, if that were all that were being defaulted on, were a tiny fraction of a percent of our GDP. The bad bets MADE on the loans, however, compounded the problem by orders of magnitude.
In other words, even if your claim of government forcing banks to loan more money were true (it's debatable, and if you read enough about it it's clear that the banks weren't being forced to do anything they didn't want to do) - it STILL didn't sink the economy. Deregulation, of one specific type, did.
Re:thats what you get for being stupid (Score:5, Insightful)
The steady erosion of Glass-Steagal through the 20th century, culminating in the 1999 GLBA which repealed sections 20 and 32 certainly had a big part to play in this. Without that, the interdependence effect we saw would likely not have occurred to the same degree.
The fact is, a lot of people in finance aren't bright enough - or cautious enough - to understand or care exactly what risks they're taking, especially with other people's money. To use an old analogy, the modern financial system is like the ferry service in an impoverished coastal country. Everyone uses it, because it kind of works. It's overcrowded, run by greedy people cutting corners, and every once in a while a ferry sinks, killing somewhere between 800 and 1000 people. But the next day, the rest of the identical ferries are out, and people are lining up to get on board because they don't have a choice.
At least after the S&L debacle, people got prosecuted. This time, they were let off the hook.