Friday, November 24, 2017

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USA vs Bitcoin - Federal Regulators Pinch Tradehill

on in Bitcoin Minute

World Bitcoin Network

Today in a rush of press, the US-based bitcoin exchange Tradehill has suspended all trading. The company has been under fire recently as the federal regulators are cracking down on bitcoin based businesses, issuing dozens of subpoenas in recent weeks and grumbling about bitcoins usage in shading dealings.
Unlike Coinbase, another US-based exchange, Tradehill is particularly vulnerable because their exchange allows you to keep a balance of US Dollars in your account as well.
And for regulators, that difference is the big no no.
Coinbase does things differently, filling its coffers with nothing but bitcoins opting instead to transfer dollars immediately into and out of a users traditional and FDIC approved bank. But will that keep them safe in the months of ahead?
The Tradehill suspension comes just a couple months after the Federal Regulators pushed bitcoin's largest exchange Mt. Gox into temporary submission.
And even after it has resumed business US Dollar payouts have been near zero.
Still, the US government is smart to move slowly. Whether they like it or not, many realize that Bitcoin could signal a fundamental sea change in the way Americans interact with money.
And it seems likely that whether bitcoin lives or dies, the concepts put forth by anonymous founder Satoshi Nakamoto will continue to create change in the financial sector.
In fact, just this week, US regulators received a number of such cautions first hand, via the bitcoin foundation.
In a closed door meeting in Washington this group of self-appointed Bitcoin aficionados made it clear that if the Federal Regulators come down too tough on bitcoin these young exchanges and businesses will likely flee to places like Germany or Canada.
With the government's approval over issues of banking and privacy at an all time low, it would seem improbable that federal regulators wouldn't offer an olive branch to this fledgling currency. But rewriting the books to accommodate change is never government's best suit.
And, today, of course, bitcoin is a minor player. But many believe that like travel agencies, maps, phone service, and traditional, bitcoin will replace traditional currency and in the process usher forth trillions of dollars of business. The question that remains is whether this windfall will grown in the US or set up shop overseas.

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