• 11 Feb 2014 at 10:10 AM

The Bitcoin Bugle: Sent To Siberia

If you were hoping to book one of Sochi’s fabulous hotel rooms with the bitcoins in your newly-unfrozen Mt. Gox account, be prepared for an unpleasant encounter with one of Vladimir Putin’s security services.

“Anonymous payment systems and crypto-currencies, including the most popular one, Bitcoin, are money surrogates and cannot be used by citizens or legal entities,” the general prosecutor said in a statement posted on Feb. 6.

Russian law says the ruble is the only official currency and using “money substitutes” is illegal, the statement added.

You won’t do much better in Cyprus.

The central bank has weighed in, and it doesn’t like Bitcoin at all.

It said in a statement (in Greek) Friday that it “does not approve any activity that falls within its purview, unless it can ensure the legality of that activity. Activities without the necessary licensing are in breach of legislation.”

So, is the institution –accused of failing to control the economy on the tiny Mediterranean island and allowing rampant tax avoidance and money laundering- saying Bitcoin is illegal?

Not quite. Instead it warns that there are big risks associated with using the currency.

Which is all really too bad since, as alluded to earlier, Mt. Gox has, like, fixed the glitch.

Bitcoin exchange Mt. Gox said customers can take out cash “as normal” and it’s working to resolve technical issues that prompted it to halt withdrawals of the digital currency.

“It’s not about cash at all, only about Bitcoin,” Michael Keferl, a communications officer for Tokyo-based Mt. Gox, said in an interview today. “There is a problem in the way transactions are verified…”

“We’re sending cash to people in Japan and around the world as normal. They can exchange coins into cash,” Keferl said in Tokyo. The Bitcoin withdrawal issue “will be fixed. It’s not like a structural problem.”

Russia to Crack Down on Virtual Currencies [WSJ]
Central Bank of Cyprus Does Not Like Bitcoin [WSJ MoneyBeat blog]
Tokyo-Based Bitcoin Exchange Uncovers a Glitch [WSJ]
Bitcoin Exchange Mt. Gox Says Users Can Withdraw Cash [Bloomberg]
Bitcoin Exchange Struggles [DealBook]

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  1. Posted by Shaz Buddy | February 11, 2014 at 12:34 PM

    Yo J-Tea we still picking up some single moms after work today?