The head of the US Federal Reserve has said that her office will not imposing any regulatory controls or restrictions on the Bitcoin cryptocurrency. Chairwoman Janet Yellen told a congressional committee that the Reserve lacks the authority to impose regulations on Bitcoin and she cast doubts on the ability for other …

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Friday 28th February 2014 05:38 GMT Ole Juul

Not what Manchin wants to hear

"This is a far more transparent system than conventional financial services and payments, in which the vast majority of transactions are concealed", wrote foundation general counsel Patrick Murck.

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1. Friday 28th February 2014 07:12 GMT Anonymous Coward
  
  Re: Not what Manchin wants to hear
  
  Patrick Murck? Really? He's making a clear statement? How fascinating.
  
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2. Friday 28th February 2014 07:15 GMT Anonymous Coward
  
  Re: Not what Manchin wants to hear
  
  I detect some bad faith in the argument that Bitcoin is more transparent than other currencies, considering mtgox just announced they lost a whole bunch of Bitcoins and it seems unlikely they will ever be found...
  
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  1. Friday 28th February 2014 08:13 GMT Suricou Raven
    
    Re: Not what Manchin wants to hear
    
    Oh, we know exactly where they are. We just don't know who controls them. They'll need laundering before they can be spent by trickling them slowly through intermediate services.
    
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    1. Friday 28th February 2014 09:11 GMT Peter2
      
      Re: Not what Manchin wants to hear
      
      So to sum up, like any victim of robbery you know you have been robbed, but you don't know by whom or how to recover your lost property?
      
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      1. Friday 28th February 2014 13:20 GMT Loyal Commenter
        
        Re: Not what Manchin wants to hear
        
        So to sum up, like any victim of robbery you know you have been robbed, but you don't know by whom or how to recover your lost property?
        
        ...But you do happen to know their Swiss bank account number...
        
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Friday 28th February 2014 11:06 GMT (AMPC) Anonymous and mostly paranoid coward

At least one Fed Reserve person has read about bitcoin

Interestingly, Manchin's campaign was financed by JP Morgan (amongst others) so there is just the "slightest" possibility he has a banking industry axe to grind.

The Manchin letter also makes great reading (particularly when you substitute "US Dollar" for "bitcoin").

http://newsbtc.com/2014/02/26/us-senator-demands-federal-regulators-ban-bitcoin/

I'm impressed that the BTC foundation made such a level-headed response to the senator's transparent attempt to grab headlines before the mid-term elections.

The Bitcoin Foundation's response:

https://bitcoinfoundation.org/blog/wp-content/uploads/2014/02/2014-02-27-Letter-to-Senator-Manchin.pdf

I believe bitcoin is here to stay and will most likely flourish. There are security warts of course, but the advantages are rapidly starting to outweigh the disadvantages. Once the Mt. Gox mess is resolved and some decent security best practices have been defined, I predict a very bright future for bitcoin. New types of online business, new payment systems, lots of potential work for unemployed financial services staff and analysts etc.

Could be just what we need.

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1. Friday 28th February 2014 13:28 GMT Loyal Commenter
  
  Re: At least one Fed Reserve person has read about bitcoin
  
  I agree. I think the one thing it is now clear that MtGox was lacking is any sort of basic accounting. After all, if they knew how many bitcoins they were supposed to have, and had transactions and sales recorded in a ledger, they would have been able to do some basic auditing to show that the number in their wallet tallied with the numebr they are expecting. Or not, as it seems in this case.
  
  This shows the need for regulation, but only the regulation of organisations holding BitCoins on behalf of others. For example, if I were to transfer 0.1 BTC to an exchange to exchange for cash, I would like to know that this transaction increases their wallet total by 0.1 BTC, and that they have a ledger showing this, and then I would expect to see a corresponding ledger entry when the coins are sold on my behalf. This could be verified against the public ledger that is the block chain.
  
  The important point here is that regulators, and auditors should be able to go to this organisation and say, "show me your ledgers, and show me your wallets". They should be able to confirm that the amount on the ledger tallies with the amount in their wallet, and the numbers in the block chain at a given point in time. Granted, there is the fact that transactions are not instantaneous, so transactions in progress cannot be easily audited until confirmed on the block chain, but such retrospective auditing (which could easily be automated) would have caught MtGoxs problems almost immediately, not 3 years down the line.
  
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  1. Friday 28th February 2014 17:11 GMT Anonymous Coward
    
    Re: At least one Fed Reserve person has read about bitcoin
    
    > This shows the need for regulation, but only the regulation of organisations holding BitCoins on behalf of others.
    
    I thoroughly agree.
    
    However, as a cynic I don't think the US government will do this.
    
    Experience tells us that governments are rather more interested in chasing people for tax than clamping down on financial irregularity, otherwise the banking crisis would never have been allowed to happen.
    
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2. Saturday 1st March 2014 01:19 GMT I. Aproveofitspendingonspecificprojects
  
  JP Morgan (amongst others)
  
  First among equals the highly respectable JP Morgan might apply a parody the oft quoted NRA phrase:
  
  "Coins don't commit crime. People commit crime", if only they weren't exactly the type of people who c.....
  
  Somenoe should tell their senator.
  
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Friday 28th February 2014 16:15 GMT Gene Cash

wait...

We're holding China and Thailand up as examples to follow? Really? No wonder the US is f*cked.

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1. Saturday 1st March 2014 20:03 GMT Trevor_Pott
  
  Re: wait...
  
  The people are now the enemy of the government, (as opposed to the government working on behalf of and at the sole discretion of the people). Where have you been the last 30 years?
  
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2. Sunday 2nd March 2014 09:54 GMT Daniel B.
  
  Re: wait...
  
  The pro-censorship dudes behind SOPA also used China as a shining example when they were pushing their draconian bill as well. It's a disturbing trend all right, but it's there.
  
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3. Monday 3rd March 2014 06:26 GMT Anonymous Coward
  
  Re: wait...
  
  Don't say 'we' as if Manchin represents anyone but the right-most 10% of his district, which is probably further right than 75% of the US anyway. He's grandstanding, winning points from his base by yodeling uselessly about something he knows he'll never have to actually follow through on.
  
  Yellen is far more important and far more powerful than a hobgoblin like Manchin can hope to be, and it seems that she, at least, has her head screwed on straight - and definitely isn't taking any cues from China and Thailand.
  
  Vigilance against a slide into autocracy is necessary and admirable, but whipping oneself into a frenzy of paranoia not only distracts from the real battlegrounds, it makes it easy to rationalize giving up entirely. The US isn't fucked - but if enough people are seduced by the adrenaline of righteous outrage, and give up the fight so they can indulge their collective persecution fetish, we could well end up that way.
  
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