US financial regulator: We could regulate Bitcoin "if we wanted"

[nsane.forums]

CFTC commissioner says his agency is considering new rules for Bitcoin.

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 (CFTC) told Reuters in an interview on Monday.

He also told CNBC on Tuesday that he wanted to make sure that the entire scheme was 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 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. “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 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. 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, a business professor at Georgetown University, told Ars last month.

View: Original Article

[DKT27]

So where were all of these regulators when the shit hit the fan in 2008? Why have we not seen more criminal charges and prosecutions in the massive fraud that happened with the sub-prime mortgage fiasco?

[ffi]

So where were all of these regulators when the shit hit the fan in 2008? Why have we not seen more criminal charges and prosecutions in the massive fraud that happened with the sub-prime mortgage fiasco?

The people that actually predicted the crash can explain very well that the crash was caused by too much regulation, which created a moral hazard, not too little. I much rather take their word for it than those people in the heydays before the crash saw nothing coming and said everything was fine.

Look for "Peter Schiff was right" on youtube or his 2006 mortgage bankers speech.

[MrVoice]

The people that actually predicted the crash can explain very well that the crash was caused by too much regulation, which created a moral hazard, not too little. I much rather take their word for it than those people in the heydays before the crash saw nothing coming and said everything was fine.

Look for "Peter Schiff was right" on youtube or his 2006 mortgage bankers speech.

Actually, the regulators were completely out to lunch on Credit Default Swaps and other derivatives, such as those created by chopping up subprime mortgages. There was a collapse because of ZERO oversight and ZERO regulation. The banks were allowed to bet money they didn't have and unfortunately for all of us, they got it totally wrong and lost big, slamming their own shareholders and more importantly people who trusted them with their accounts. There's not an economist alive that thinks there was too much regulation of the financial instruments that were the direct cause of the massive bank failures. They don't think that, because they know that there wasn't any regulation of those products at the time.

[ffi]

Yes there are economists that say the crash was caused by too much regulation, the same economists tend t o have predicted the crisis unlike those who say there was too little regulation.

Look for the videos on YouTube I pointed to earlier.

[MrVoice]

There are also people that think September 11th was a conspiracy by the Bush administration. Same level of bullshit with claiming too much regulation caused completely unregulated things to cause damage. It's an argument devoid of all logic.

[ffi]

There are also people that think September 11th was a conspiracy by the Bush administration. Same level of bullshit with claiming too much regulation caused completely unregulated things to cause damage. It's an argument devoid of all logic.

It's not that's why these people were able to make very accurate predictions and also make a lot of money during the crash when all those with 20/20 hindsight, saying there was too little regulation lost money and didn't see the crash coming. (btw there were many more from the austrian school of economics that predicted the crash and blame overregulation for the crash but Schiff is very clear, accessable and sometimes even funny)

watch those videos from Peter Schiff

http://www.youtube.com/watch?v=2I0QN-FYkpw

[MrVoice]

Predicting a crash has nothing to do with my statement. You have been arguing this whole time that UNregulated securities were too regulated. I don't have to watch any video of some guy talking his investments up; simple grammar logic proves your contention is a fallacy. No matter who saw it coming and made money, something that isn't true remains untrue. FACT: There was NO regulation of the financial instruments that caused the collapse, hence over-regulation is a logical impossibility. I hope this clears up the difference between parroting someone's opinion without any evidence to back up their claim (or your secondhand one) and using logic on your own. So just to reiterate: no regulation ≠ too much regulation. It's a contradiction in terms and an impossible paradox of logic.

[ffi]

Predicting a crash has nothing to do with my statement. You have been arguing this whole time that UNregulated securities were too regulated. I don't have to watch any video of some guy talking his investments up; simple grammar logic proves your contention is a fallacy. No matter who saw it coming and made money, something that isn't true remains untrue. FACT: There was NO regulation of the financial instruments that caused the collapse, hence over-regulation is a logical impossibility. I hope this clears up the difference between parroting someone's opinion without any evidence to back up their claim (or your secondhand one) and using logic on your own. So just to reiterate: no regulation ≠ too much regulation. It's a contradiction in terms and an impossible paradox of logic.

There was a lot a regulation and he points to the specifics regulations. I can name a few, on a free market there wouldn't be a central bank issuing paper money without any backing, on a free market there wouldn't be implicit or explicit government backing of securities and fanny mae and freddy mac wouldn't exist (it isn't a coincidence both names start with an F, it's the F of federal!), on a free market companies which take too much risk wouldn't be implicetely guaranteed by the government, they would be let to fail, on a free market banks should be allowed to refuse credit to uncreditworthy people

So I guess I have adequately proven the market wasn't free at all and that to crash was caused by TOO much regulation/

[MrVoice]

Fanny and Freddy did not cause the collapse in the U.S., so basically you're tilting at windmills. You've taken someone's word (an expert, just because he made money?) and not done research. That's exactly what I was talking about. Credit default swaps and other collateralized debt instruments were to blame and they were TOTALLY UNREGULATED. After the crash, the companies responsible had to explain to the U.S. government what they'd been doing because it was so creatively dangerous and stupid that no one had expected banks to do such a thing. From the beginning, your argument has been based on one source without any corroborating context. If this were about the Netherlands, your word would hold much more weight than mine, but yet you haven't listened to me once when we're talking about American issues. I don't mind, it just begs the question: why? Why do you feel you need to be right when there is mountains of easily researchable evidence that contradicts your "expert" and his narrow "look at me, I predicted this" bragging? Science has shown time and again that you can come to the right conclusion through faulty logic, and that's a prime example. He predicted it, but he didn't come to the solution by the correct means. It's like doing a math problem with a proof and getting the proof entirely wrong, but bitching out your professor because he didn't give you points for your "right answer" at the end. I'm sorry, but neither you, nor your expert, get points for reaching the correct solution by completely incorrect means. That's been the whole point of my completely logic-based contention from the start.