Over the past few days we have heard about accounts being seized at Mt.Gox , OkPay shutting down Bitcoin Services, Liberty Reserve being seized and a whole host of operations being shut down right and left that have anything to do with the words ‘bitcoin’ and ‘exchange’.
In the same breath we’re hearing Paypal wants to get involved in Bitcoin as well as Western Union and a host of traditional financial companies.
What’s the deal?
Well, in a nutshell bitcoin is going to be ‘allowed to succeed’ but you’re not the one that’s allowed to succeed with it. Don’t bother opening an exchange today, and if you own one you should seriously be looking over your back as regulators are gunning for you.
You’re going to hear a ton more of account seizures and bitcoin to fiat companies shut down until a few months from now you’ll get this press release saying that Paypal is now accepting Bitcoin (with a zero refund policy and them in the middle). In other words you’ll send your bitcoins to Paypal, paypal then charges the client and forwards the bitcoins to the client. The client will have no charge back option. Of course they get their cut both ways in the process. Roughly the same terms come from Western Union and other established companies.
In other words, if you are an already established player (such as a bank, paypal or western union type firm) regulators are stalling for you to get your ducks in a row. When the slate is clean, the big firms can come in a clean house.
You think I am kidding? In 6 months check the status of bitcoin, you’ll see a few more currently operating exchanges shut down and a new host of “big firms” taking over the entire process.
I wouldn’t want to be Mt.Gox right now.