vacuum
7th May 2013, 08:42 PM
lol...wow
US financial regulator: We could regulate Bitcoin “if we wanted”
CFTC commissioner says his agency is considering new rules for Bitcoin.
by Cyrus Farivar (http://arstechnica.com/author/cyrus-farivar/) - May 7 2013, 8:21am PDT
The American financial regulator for derivatives trading has told multiple news outlets that it is considering new rules for Bitcoin.
"Here's what I know for sure: we could regulate it if we wanted. That is very clear," Bart Chilton, one of five commissioners at the Commodity Futures Trading Commission (http://www.cftc.gov/) (CFTC) told Reuters (http://www.reuters.com/article/2013/05/06/net-us-bitcoin-regulation-idUSBRE9450Y520130506) in an interview on Monday.
He also told CNBC on Tuesday (http://video.cnbc.com/gallery/?video=3000166533&play=1#eyJ2aWQiOiIzMDAwMTY2NTMzIiwiZW5jVmlkIjoiN3p 5N3p4L0F0ZmNvaTh5M2Rha2lEUT09IiwidlRhYiI6InRyYW5zY 3JpcHQiLCJ2UGFnZSI6MSwiZ05hdiI6WyLCoExhdGVzdCBWaWR lbyJdLCJnU2VjdCI6IkFMTCIsImdQYWdlIjoiMSIsInN5bSI6I iIsInNlYXJjaCI6IiJ9) that he wanted to make sure that the entire scheme was not a "house of cards (http://blogs.marketwatch.com/thetell/2013/05/07/cftcs-chilton-want-to-ensure-bitcoin-is-not-a-house-of-cards/)."
"I don't want to regulate everything under the sun," Chilton added in the CNBC interview. "If you guys want to be a shill for the financial industry and support a chattel currency that people use to purchase drugs and money with—have a party, man. My job is a regulator; I'm going to look after it."
As the use of Bitcoin continues to grow, there are now Bitcoin-based hedge funds and shady derivatives websites (http://arstechnica.com/business/2013/04/taming-the-bubble-investors-bet-on-bitcoin-via-derivatives-markets/) where people can short bitcoins, effectively betting that the price will fall. Those sites are outside the United States, although there certainly are Americans using these sites.
“It’s not Monopoly money we’re talking about here—real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be ‘out there’ transactions,” Chilton told the Financial Times (http://www.ft.com/intl/cms/s/0/b810157c-b651-11e2-93ba-00144feabdc0.html#axzz2SXae7gau). “In essence, we’re talking about a type of shadow currency, and there is more than a colorable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction.”
Should such regulations be put into place, it would mark the second significant new financial regulations for Bitcoin since new guidelines were enacted by the Financial Crimes Enforcement Network (FinCEN) in March 2013.
As we reported (http://arstechnica.com/tech-policy/2013/03/us-regulator-bitcoin-exchanges-must-comply-with-money-laundering-laws/) then, the new rules stipulate that "a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter" and is therefore subject to these federal regulations.
Bitcoin advocates often cite the fact that the US dollar isn’t based on anything either—President Richard Nixon took us off the gold standard in 1971. (https://en.wikipedia.org/wiki/Nixon_Shock) However, there is a massive legal and regulatory infrastructure designed to prevent volatility, fraud, and other malfeasance. There are numerous entities, including the CFTC, the Federal Reserve, the Treasury Department, and the Securities and Exchange Commission enforcing the laws. As a decentralized protocol, Bitcoin has none of these.
“The bank that is storing my money is highly regulated by federal regulators and backed by a government with a huge army behind it,” James Angel (http://explore.georgetown.edu/people/angelj/?action=viewgeneral&PageTemplateID=360), a business professor at Georgetown University, told Ars last month.
US financial regulator: We could regulate Bitcoin “if we wanted”
CFTC commissioner says his agency is considering new rules for Bitcoin.
by Cyrus Farivar (http://arstechnica.com/author/cyrus-farivar/) - May 7 2013, 8:21am PDT
The American financial regulator for derivatives trading has told multiple news outlets that it is considering new rules for Bitcoin.
"Here's what I know for sure: we could regulate it if we wanted. That is very clear," Bart Chilton, one of five commissioners at the Commodity Futures Trading Commission (http://www.cftc.gov/) (CFTC) told Reuters (http://www.reuters.com/article/2013/05/06/net-us-bitcoin-regulation-idUSBRE9450Y520130506) in an interview on Monday.
He also told CNBC on Tuesday (http://video.cnbc.com/gallery/?video=3000166533&play=1#eyJ2aWQiOiIzMDAwMTY2NTMzIiwiZW5jVmlkIjoiN3p 5N3p4L0F0ZmNvaTh5M2Rha2lEUT09IiwidlRhYiI6InRyYW5zY 3JpcHQiLCJ2UGFnZSI6MSwiZ05hdiI6WyLCoExhdGVzdCBWaWR lbyJdLCJnU2VjdCI6IkFMTCIsImdQYWdlIjoiMSIsInN5bSI6I iIsInNlYXJjaCI6IiJ9) that he wanted to make sure that the entire scheme was not a "house of cards (http://blogs.marketwatch.com/thetell/2013/05/07/cftcs-chilton-want-to-ensure-bitcoin-is-not-a-house-of-cards/)."
"I don't want to regulate everything under the sun," Chilton added in the CNBC interview. "If you guys want to be a shill for the financial industry and support a chattel currency that people use to purchase drugs and money with—have a party, man. My job is a regulator; I'm going to look after it."
As the use of Bitcoin continues to grow, there are now Bitcoin-based hedge funds and shady derivatives websites (http://arstechnica.com/business/2013/04/taming-the-bubble-investors-bet-on-bitcoin-via-derivatives-markets/) where people can short bitcoins, effectively betting that the price will fall. Those sites are outside the United States, although there certainly are Americans using these sites.
“It’s not Monopoly money we’re talking about here—real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be ‘out there’ transactions,” Chilton told the Financial Times (http://www.ft.com/intl/cms/s/0/b810157c-b651-11e2-93ba-00144feabdc0.html#axzz2SXae7gau). “In essence, we’re talking about a type of shadow currency, and there is more than a colorable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction.”
Should such regulations be put into place, it would mark the second significant new financial regulations for Bitcoin since new guidelines were enacted by the Financial Crimes Enforcement Network (FinCEN) in March 2013.
As we reported (http://arstechnica.com/tech-policy/2013/03/us-regulator-bitcoin-exchanges-must-comply-with-money-laundering-laws/) then, the new rules stipulate that "a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter" and is therefore subject to these federal regulations.
Bitcoin advocates often cite the fact that the US dollar isn’t based on anything either—President Richard Nixon took us off the gold standard in 1971. (https://en.wikipedia.org/wiki/Nixon_Shock) However, there is a massive legal and regulatory infrastructure designed to prevent volatility, fraud, and other malfeasance. There are numerous entities, including the CFTC, the Federal Reserve, the Treasury Department, and the Securities and Exchange Commission enforcing the laws. As a decentralized protocol, Bitcoin has none of these.
“The bank that is storing my money is highly regulated by federal regulators and backed by a government with a huge army behind it,” James Angel (http://explore.georgetown.edu/people/angelj/?action=viewgeneral&PageTemplateID=360), a business professor at Georgetown University, told Ars last month.