New York Just Granted the First Banking License to a Bitcoin Exchange

bitcoin

A New York City-based bitcoin exchange itBit has become the first to receive a charter under New York banking laws.

ItBit is a commercial exchange that trades the virtual currency. Thursday’s announcement makes it the first company to receive a charter from the New York State Department of Financial Services (NYDFS).

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BEWARE! μTorrent Silently Installing Bitcoin Mining Software

If you have recently installed or updated the popular BitTorrent client μTorrent 3.4.2 Build 28913 on your computer, then you read this warning post right now.

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‘Paradigm shift’: Surging Bitcoin to replace ‘broken’ government currencies

Reuters / Jim Urquhart

The Bitcoin virtual currency is up 24.5 percent in 24 hours, touching a new record of $619. The surge is “the beginning of something spectacular,” with it potentially displacing the dollar, Jeffrey Tucker of the Foundation for Economic Education told RT. Continue reading

US Seizes Top Bitcoin Exchange as Crackdown Begins

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(RT) The US Department of Homeland Security seized a payment processing account Tuesday belonging to Mt. Gox, the largest international Bitcoin trader, claiming the monetary exchange service falsified financial documents.

The American government has previously made it clear that officials are watching Bitcoin, a decentralized economic currency that international regulators have not yet been able to control. Many of those who favor Bitcoin use Dwolla, an Iowa-based startup that allows customers to transfer their dollars into Bitcoins.

Unfortunately for those consumers, the Department of Homeland Security issued a warrant Tuesday effectively shutting down Dwolla’s ability to process Bitcoin payments, as reported by CNET. Whether because of the DHS’ charge of operating an “unlicensed money transmitting business,” the sudden timing of the allegations, or another reason, Dwolla and Mt. Gox officials have been reluctant to comment.

In order not to compromise this ongoing investigation being conducted by ICE Homeland Security Investigations Baltimore, we cannot comment beyond the information in warrant, which was filed in the District of Maryland [Tuesday],” said Nicole Navas, a representative for US Immigration and Customs Enforcement.

The warrant claims Mt. Gox CEO Mark Karpeles did not disclose he operated a financial transfer site when he opened a new bank account for the business. Money transmitting services, according to Gawker, are required to register with the Department of Treasury’s Financial Crimes Enforcement Network (FinCen). Mt. Gox, which is involved in roughly 63 per cent of all Bitcoin purchases, has not done so.

Despite the technicalities skeptics are wondering if Bitcoin’s friction with the Treasury department is the cause of this recent scrutiny. Senator Chuck Schumer (D-New York) said the anonymity afforded by the service provided an “online form of money laundering” and campaigned for its downfall.

Literally, it allows buyers and users to sell illegal drugs online, including heroin, cocaine, and meth, and users do sell by hiding their identity through a program that makes them virtually untraceable,” Schumer said during a 2011 news conference. “It’s a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen. It’s more brazen than anything else by light years.”

Most notably, proponents have asserted that Bitcoin would be impermeable in instances where WikiLeaks, for example, saw its funding evaporate as the federal government pressured PayPal to cut off the whistleblower site’s support network. Bitcoin would be more resistant to a crackdown of that nature.

Jerry Brito, a scholar at the libertarian Mercatus Center at George Mason University, told the Washington Post Bitcoin could reduce the cost of financial services by pioneering new business formats.

Bitcoin has the potential to be a boon to the economy and a boon to merchants,” he said, adding that it could “disrupt traditional payment networks that have not been innovative for a very long time.”

A blind governmental crackdown would only serve to push Bitcoin further underground, Brito argued.

You can’t put the genie back into the bottle,” he continued. “I hate to say it, but the Bitcoin community needs to start lobbying. It needs to start educating policymakers, lobbyists and influencers about the pros of Bitcoin and the impossibility or the difficulty in getting rid of all the bad uses.”

Top bitcoin exchange freezes, arbitrarily shuts down, proving you will not be able to get out of bitcoin when you want to

It is now abundantly obvious that bitcoin has become an insidious “trap” that’s taking money from suckers who are deluded into believing the “bitcoin cult.” The top bitcoin exchange, MTGox, now openly admits that its trade engine crashed during the yesterday’s panic selloff, preventing people from being able to get out of the bitcoin market.

Today, MT.Gox now says, “Trading is halted until 2013-04-12 02:00am UTC to allow the market to cooldown following the drop in price,” meaning that the #1 bitcoin exchange has arbitrarily decided to stop processing orders just because it wants to!

It’s a bitcoin bank holiday! Don’t you just love holidays?

All this means three very concerning things:

#1) The bitcoin infrastructure cannot handle a selloff. Once the rush for the exits gains momentum, you will not be able to get out. Only those who sell early will be able to exit the market.

#2) The bitcoin infrastructure is subject to the whims of just one person running MTGox who can arbitrarily decide to shut it down whenever he thinks the market needs a “cooling period.” This is nearly equivalent to a financial dictatorship where one person calls the shots.

#3) Every piece of bad news will be “spun” by exchanges like MTGox into good-sounding news. As bitcoin was crashing yesterday by 60% in value in mere hours, MTGox announced it was a “victim of our own success!” So while bitcoin holders watched $1 billion in market valuation evaporate, MTGox called it a success. Gee, then what would you call it when bitcoin loses 99%? A “raging” success?

Keep in mind that MTGox makes money off bitcoin transactions, meaning the organization has every reason to spin bad news (just like Wall Street) and keep the market “churning” so that more transactions are taking place. Listening to bitcoin advice from people who are making money off bitcoin transactions is a lot like listening to Obama promise you how he’ll protect your liberty.

You are a fool if you believe anything now coming out of the “bitcoin cult.”

Check out this volatility. The time period for this chart is just 24 hours during which prices were swinging wildly:

Conclusion: Bitcoin is a failed currency experiment; not ready for prime time

Bitcoin is now officially a failed experiment. Thanks to the out-of-control hyping and “get rich” propaganda coming from its promoters, bitcoin has become nothing more than a pyramid scheme to take people’s money by suckering them into a currency scam that has no use in the real world. The wild market volatility of bitcoin now proves that merchants will not embrace this currency. There’s too much risk.

And that means bitcoins have little use in the real world, which also means that people are buying bitcoins for the sole purpose of selling bitcoins later — i.e. they are speculators playing the bitcoin casino. At this point, bitcoins might as well be widgets… or tulips.

Many bitcoin speculators are too young to have lived through the exact same mania with the dot com bubble, but believe me, it’s a nearly-identical repeat. …Millions of people all thinking they’re going to get rich without effort, suckering each other into a total delusion, displaying cult-like behaviors and irrational justifications while losing their shirts.

Ever pyramid bubble is wonderful as long as it keeps going up. Everybody thinks they’re rich, and the whole thing works great until it doesn’t. Once the delusion is shattered, everybody loses and the pyramid scheme collapses while the cult members stare in disbelief, unable to cash out because it’s already too late.

If you own bitcoins, SELL NOW while you still can

Get out of bitcoins. If you bought low, sell now while there are still suckers out there who think bitcoins will make them rich. If you bought high, sell now before it drops even further.

Oh, wait, I forgot: You can’t sell now, probably, because the #1 bitcoin exchange decided to close its doors. It’s the “bitcoin bank holiday!”

At this point you will hopefully realize that you traded dollars for a virtual currency that can be wildly manipulated, crashed, frozen and halted without your knowledge or input. If you bought in at anything over $20, you probably got suckered.

So my advice is to eat the losses, learn your expensive lesson, wise up and stop being such a fool in the future. Sell your bitcoins and focus on something more worthwhile.

The bitcoin cult is now the Jim Jones of currency, and everybody is drinking the kool-aid. It’s only a matter of time before they start dropping dead.

“It’s a holiday! A holiday!” – Gerald Celente, singing about the looming bank holidays that await depositors across the EU.

http://www.naturalnews.com/039880_bitcoin_bubble_panic_selling_accounts_frozen.html#ixzz2QBVdkNGk

BitCoin Down 50% In Massive Sell Off: Over $1 Billion Vaporized In a Few Hours

Just a few months ago the total net worth of all Bitcoins, a popular encrypted digital currency, was worth about $140 million. The non-tangible exchange mechanism is used by people all over the world to purchase everything from traditional goods and services, to illicit trade that may include drugs and stolen credit card numbers. The coins became a go-to digital store of wealth around the world after the meltdown of the Cypriot financial system, and was pushed as a ‘safe’ way to preserve wealth out of view prying government eyes. All of the excitement surrounding Bitcoin has driven the price of a single unit to in excess of $250, giving the total Bitcoins in global circulation a market capitalization of over $2.5 Billion in just a few months time.

Earlier this morning, Mike Adams of Natural News penned a warning to investors and those seeking privacy and wealth protection by utilizing the digitally encrypted BitCoin currency unit:

Bitcoin has become a casino. It is almost a perfect reflection of the tulip bulb mania of 1637 in these two ways: 1) Most people buying bitcoins have no use for bitcoins (just like tulip bulbs), and 2) The rapid increase in bitcoin valuations cannot be substantiated in any way that reflects reality.

In other words, there is no fundamental reason why bitcoins should be 2000% more valuable today than four months ago. Nothing has changed other than the craze / mania of people buying in.

When bitcoins were in the sub-$20 range, I was not concerned about any of this. I actually encouraged people to buy bitcoins and support the bitcoin movement. But alarm bells went off in my mind when it skyrocketed past $150 and headed to $200+ virtually overnight. These are not the signs of rational markets. These are warning signs of bad things yet to occur. (Via Infowars)

A few hours after Adams’ dire warning was posted, the crash he warned about has become a reality.

This morning, without warning, and moments after Bitcoin achieved its all time highs, the currency collapsed over 50%, essentially vaporizing upwards of one billion dollars in value.

This is what panic selling looks like – in real time:

Bitcoin-Collapse(Chart Courtesy Bitcoinbullbear.com)

And given that there are no protective mechanisms for the alternative free market Bitcoin trade, the crash may not yet be over.

Will it stage an amazing recovery? Alas, for this particular bubble, there are no NYSE circuit breakers nor is there a Federal Reserve-mandated “plunge protection team.” And why should there be? The central banks hate all currency alternatives. Firehats: on, especially since the volume is still relatively lite. (Zero Hedge)

The momentum for Bitcoin has now turned to the downside, much like it did in previous crashes where the currency achieved new highs, and was promptly sold off by those who bought into the bubble early at rock-bottom prices.

While BitCoin may be a preferred method of keeping payments for services and products private through its crypto-mechanisms, it is still a non-tangible asset and it require brokers and the internet to function properly.

Touted as a safe haven store of wealth and a “gold standard of the internet age” by Forbes, tens of thousands of investors bought into the hype.

Today they are paying the price.

During times of financial and economic stability BitCoin may function just fine as a suitable mechanism of exchange. But these are not ordinary times. Interesting, yes. Stable, no. And thus, exchanging one’s assets and turning them into digital Bitcoins may not be the best choice of asset protection during periods of financial, economic and political turmoil and uncertainty.

Only physical assets – the kind we can hold in our hand – can truly be called safe havens.

Food in your pantry that you can consume at anytime.

Skills and labor you can barter for other goods.

Precious metals, which have stood the test of time over thousands of years.

Land on which you can produce food and alternative power.

These are the assets that provide a realistic level of safety and security.

These are money when the system crashes and confidence in the paper ponzi schemes around the world is lost.

Bitcoin is fine for certain types of transactions. But having funds in Bitcoin is, obviously, no different than a deposit account at a bank which can go under or a stock marketprone to manipulation.

Get physical. It’s the only way to ensure your assets will really be there when you need them.

 

 

http://www.shtfplan.com/headline-news/bitcrash-down-50-in-massive-sell-off-over-1-billion-vaporized-in-a-few-hours_04102013

Bitcoin crashes, losing nearly half of its value in six hours

(arstechnica.com) On Wednesday afternoon, the Bitcoin bubble appears to have burst. As of this writing, its current value is around $160—down from a high of $260. (It fell as low as $130 today.) There is no obvious explanation for why the digital currency has fallen so far and so fast, although the market correcting after such a huge rise might be a good explanation.

Some redditors have taken solace in a comment thread entitled “Hold Spartans.”

“This is just the market venting some pressure after these huge gains,” wrote anotherblog. “To be honest I’m glad it’s happening now. If it recovers, it will demonstrate resilience in the market and give confidence to future buyers and current holders that they don’t need to panic sell, reduce the chances of a crash in the future.”

Coincidentally, the plunge came several hours after a reddit user by the name of “Bitcoinbillionaire” suddenly, spontaneously decided to give away around $12,000 (more than 63 BTC) worth of the digital currency. Bitcoinbillionaire rewarded 13 seemingly random redditors, then stopped the whirlwind spree after about eight hours. At the moment, no evidence links the currency’s plunge with this random reddit charity.

Bitcoinbillionaire took advantage of reddit’s Bitcointip mechanism, which allows users to send each other small amounts of cash (usually less than $5). The mysterious benefactor appears to have given away 20 BTC (now worth slightly less than $4,000) as his or her first gift to one Karelb. This gift happened under a comment titled: “I wish for the price to crash.” That comment now seems prophetic.

A look at the account transferring all this money shows that two hours before the giveaways began, Bitcoinbillionaire received 50 BTC (about $9,500) from another account without an IP address.

Business Insider reported that Bitcoinbillionaire has left hints that he or she was an “early adopter”and had forgotten he or she even had any bitcoins. Not much is known beyond that, as Bitcoinbillionaire vanished as suddenly as he or she appeared.

“You’ve made me change my mind about this whole thing,” Bitcoinbillionaire wrote. “I’m done.”

Don’t feel bad if you missed the action. Business Insider also notes that this pot of cash is now being “paid forward.”

Bitcoin wallet service Coinbase faces phishing attacks after data leak

(Arstechnica) -Bitcoin wallet service Coinbase has publicly, and presumably accidentally, exposed information about its users’ names, e-mail addresses, and details of their transactions on the Coinbase website. The exposed e-mail addresses have become the target of phishing attacks.

Coinbase, a Y Combinator-backed startup, is a popular service for holding users’ bitcoins. At the time of this writing, the leaked information was still showing up in Google searches of the Coinbase site:

The URLs of the pages label them “checkouts,” and they appear to be transaction receipts. One was a 0.05 BTC ($6.85) transaction labeled as a donation. Another was a $980 transaction for “8 managed VPS hosts” from a company called cachedd. A third was a 229.99 BTC ($31,508) trasnsaction for “AVALANCHE SPA POWDER.”

In a Thursday blog post, Coinbase warned users to “beware of a phishing attack.” Someone has been sending e-mails to Coinbase users claiming that they need to log in to confirm recent transactions but directing them to a website not controlled by Coinbase. Late Friday morning, the leaked information was still publicly available on the Coinbase website.

There’s no evidence of a security problem with the Coinbase site. Provided users don’t fall for the phishing scheme, their funds should be safe. But publicly exposing users’ contact information and transaction details is a pretty big screwup.

We’ve emailed Coinbase seeking comment and will update if they respond.