18 October 2017
Register now

US state regulators investigate virtual currencies; Mt. Gox chief quits Bitcoin Foundation

24 February 2014  |  6770 views  |  1 bitcoins

A collection of US state financial regulators has become the latest body to launch an investigation into bitcoin and other virtual currencies. Meanwhile, the boss of troubled exchange Mt. Gox has resigned from the board of the Bitcoin Foundation.

The Conference of State Bank Supervisors (CSBC) says that its new emerging payments task force will look into how things such as crypto-currencies affect consumer protection and state law.

The move has been welcomed as an "important step" by US senator Tom Carper, chairman of the Homeland Security Committee, which carried out an investigation of virtual currencies last year.

"As virtual currencies, like bitcoin, and similar technologies continue to be increasingly utilized, we have to ensure that governments are adequately protecting consumers and addressing lawbreakers without hindering innovation," says Carper.

The CSBS task force is made up of nine state regulators, including New York State Department of Financial Services superintendent Benjamin Lawsky, who recently held his own hearings into virtual currencies and has proposed the introduction of 'BitLicenses'.

The members will talk to stakeholders - including fellow state regulators, federal regulators, industry participants, and other experts - as they bid to get a grasp of how new entrants and technologies affect the stability of payment systems and how to weave them into the financial regulatory fabric.

Charles Vice, chairman, CSBS, says: "State regulators welcome a robust and focused dialogue about the benefits and risks of innovations to payment systems. We seek an environment where technological innovation can be developed, but also regulated in a clear manner."

Separately, the fallout from the MT. Gox fiasco continues, with chief executive Mark Karpeles quitting the board of the Bitcoin Foundation, effective immediately.

Mt. Gox, the world's best known bitcoin exchange, suspended withdrawals earlier this month, blaming a bug in the bitcoin software that makes it possible to alter transaction details.

This caused a dispute with the Bitcoin Foundation, which hit back, insisting that the problem was down to the exchange's own "unpreparedness" for the "transaction malleability" issue.

In a brief statement on Karpeles, the foundation says: "We are grateful for their early and valuable contributions as a founding member in launching the Bitcoin Foundation."

Nearly three weeks after Mt. Gox withdrawals were suspended, users can still not access their funds. Bitcoin's value on the exchange has plummeted to $149, according to Bitcoin Charts, and the issue seems to be dragging down its price on other platforms: it currently trades on Bitstamp at $576, down 14%.

Meanwhile, furious Mt. Gox users have descended on the company's headquarters in Tokyo demanding their money, forcing the firm to move offices, citing "security problems". It has also deleted all of its tweets from its official account.

Karpeles is the second high profile Bitcoin Foundation board member to leave in recent weeks: last month BitInstant CEO Charlie Shrem quit after being charged with money laundering related to an alleged Silk Road scheme.

Comments: (1)

Neil Crammond
Neil Crammond - trader - london | 25 February, 2014, 09:53

bitcoin no more than a glorified "ponzi" ?  

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

BMO closes the door on bitcoin businesses

BMO closes the door on bitcoin businesses

19 February 2014  |  5586 views  |  0 comments | 7 tweets | 6 linkedin
Bitcoin bug causes massive sell-off

Bitcoin bug causes massive sell-off

10 February 2014  |  16100 views  |  7 comments | 23 tweets | 16 linkedin
Triple whammy hits bitcoin price

Triple whammy hits bitcoin price

07 February 2014  |  6719 views  |  1 comments | 13 tweets | 5 linkedin
BitInstant CEO charged with money laundering over Silk Road scheme

BitInstant CEO charged with money laundering over Silk Road scheme

27 January 2014  |  3705 views  |  0 comments | 4 tweets | 3 linkedin
Wells Fargo and JPMorgan take contrasting stance on bitcoin

Wells Fargo and JPMorgan take contrasting stance on bitcoin

24 January 2014  |  14378 views  |  2 comments | 11 tweets | 14 linkedin
Mt. Gox boosts security with one-time password card

Mt. Gox boosts security with one-time password card

29 November 2013  |  4770 views  |  0 comments | 4 tweets | 6 linkedin
Bitcoin hits $1000 mark

Bitcoin hits $1000 mark

27 November 2013  |  7344 views  |  0 comments | 5 tweets | 2 linkedin
MT. Gox demands return of $5.3m in CoinLab counter-suit

MT. Gox demands return of $5.3m in CoinLab counter-suit

17 September 2013  |  5261 views  |  0 comments | 2 tweets

Related blogs

Create a blog about this story (membership required)
visit www.fivedegrees.nlRegister now

Top topics

Most viewed Most shared
Ripple looks to drive bank adoption with $300m XRP rebate programmeRipple looks to drive bank adoption with $...
15438 views comments | 12 tweets | 4 linkedin
Swift positive on blockchain, but big challenges remainSwift positive on blockchain, but big chal...
8636 views comments | 16 tweets | 22 linkedin
hands typing furiouslyHow artificial intelligence can deliver a...
8183 views 0 | 8 tweets | 9 linkedin
satelliteGates Foundation backs Ripple collaboratio...
7688 views comments | 13 tweets | 10 linkedin
IBM uses blockchain to improve cross-border payments processingIBM uses blockchain to improve cross-borde...
6884 views comments | 9 tweets | 17 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job