Big jump in Bitcoin...

Leo

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I had a bank account closed without notice last year - and they wouldn't even give me a reason why. I'm pretty sure of the reason (because I had the audacity to transfer in funds that came from a crypto exchange) - but wanted them to spell it out. Not a word from them - and it caused me no end of problems. If this is the banking model we have going on, I certainly want things in a way that they can't pull shit with my own money.
This isn't the bank making such a decision based on your crypto trading putting their future or FIAT at risk, this is due to regulation and the bank's responsibility in relation to AML. So if you want regulation to protect your interests, you have to accept that the regulators are also likely to impose restrictions that you don't agree with. Financial sovereignty where you get the freedoms to do what you like also comes with significant risk.
 

EmmDee

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This isn't the bank making such a decision based on your crypto trading putting their future or FIAT at risk, this is due to regulation and the bank's responsibility in relation to AML. So if you want regulation to protect your interests, you have to accept that the regulators are also likely to impose restrictions that you don't agree with. Financial sovereignty where you get the freedoms to do what you like also comes with significant risk.
"Source of funds" - try depositing a suitcase full of bank notes and see how long the bank keeps your account open. The only difference is that with a suitcase full of notes they can refuse it at the counter. With an electronic transfer they can't. The problem is that unexplained large transfers in from a source that doesn't operate AML procedures (i.e. a bitcoin exchange) is exactly the type of behaviour somebody who was money laundering would try to do.

Secondly - they can't tell you anything because if behaviour is suspicious, they are legally barred from raising it to the customer ("tipping off").

It is easy to criticise when we want to do something that seems pretty straightforward and aren't trying to break any laws. But the scale of criminal and terrorist financing looking at ways to work through the banking system dwarves cases like this. And frankly, the Bitcoin exchanges and brokers are not willing to perform anything like adequate KYC checks that would be needed for other financial institutions to trust funds coming from them
 
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Leo

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It is easy to criticise when we want to do something that seems pretty straightforward and aren't trying to break any laws.
Exactly, and I think most people would happily accept a few trivial speed bumps in such dealings if it made things much more difficult for organised crime.
 

tecate

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Exactly, and I think most people would happily accept a few trivial speed bumps in such dealings if it made things much more difficult for organised crime.
This is where I fundamentally disagree. The world will not implode if we go back to having the liberty to move our own hard earned funds as we wish. When it comes to the real movers in terms of organised crime, the conventional banking system caters for them all day long. Just look at some of the fines dished out in recent months and years to mainstream banks which implicates this.

These are not trivial speed bumps. Lets think this through for a second. I've done nothing wrong yet I have FIAT money in the cryptocurrency ecosystem that I can't get out because of some game getting played at another level? They cut off my access to banking - how is that trivial? I don't agree with being collateral damage in some dispute that's being played out between third parties.

In the crypto-sphere right now there is an exchange that has (rightly) come in for all sorts of criticisms. However, whilst I'm not going to defend them on all fronts, at the heart of the issues that have emerged is the fact that they have consistently had banking denied or pulled out from under them. This has been at the core of decisions they have subsequently made. This is the experience of practically every exchange on the planet.

On the culpability of the banks, sure they have AML/KYC regulations to follow and in many instances issues that have arisen lie with regulators, red flags raised elsewhere and their need to comply with regulations. However, that certainly is not in all cases by any stretch of the imagination. They've used this as cover to beat down on an emerging crypto economy by cutting off banking to exchanges. There are multiple examples of same - with legal wranglings in the court systems in most jurisdictions that evidence that.
 

Leo

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This is where I fundamentally disagree. The world will not implode if we go back to having the liberty to move our own hard earned funds as we wish.
The only time you can do with your money as you wish is, and has always been, when you physically have it in your hands. Since the formation of the banking system, if you choose to use their services, you must abide by their rules. Some of these rules will be set by legislation and regulation, others by the institutions themselves. Banks are service providers, they are entirely free to determine what services they do and do not provide within the constraints of the legal system.

You are right though, the world won't implode, but the goal isn't to stop it imploding, it's to make things difficult for fraud and organised crime. The vast majority of people suffering to any great degree from AML legislation are those who have something to hide. It's true these check don't prevent all fraud, but that is no reason to relax them. Just as blood alcohol limits don't prevent all fatalities, no one is pretending that eliminating or relaxing them would improve the situation.

These are not trivial speed bumps. Lets think this through for a second. I've done nothing wrong yet I have FIAT money in the cryptocurrency ecosystem that I can't get out because of some game getting played at another level?
You're not the only party in the transaction, the other party must also be able to demonstrate they've done nothing wrong. Crypto exchanges find it difficult to impossible to prove this, if they can't do so, it's only proper that they should be blocked from interacting with mainstream banks who have to show compliance. If the bank then has any suspicion whatsoever about your dealings, then their safest course of action is to cut you off. Ask their shareholders would they prefer the bank lose a few customers or risk a compliance finding?

They cut off my access to banking - how is that trivial?

I don't agree with being collateral damage in some dispute that's being played out between third parties.
Signing up to a bank as a customer you give them complete authority to treat you as such. Is it not a little ironic that a crypto system that rails against the banking system is so completely reliant on it in certain aspects? If crypto is all it's cracked up to be, why the need to dump it for FIAT at all? Perhaps the bank had read your $20k prediction for YE'21 and are saving you from losing out? :D

They've used this as cover to beat down on an emerging crypto economy by cutting off banking to exchanges. There are multiple examples of same - with legal wranglings in the court systems in most jurisdictions that evidence that.
That suggests the banks feel significantly threatened by crypto. I haven't seen much to prove that is the case, it's more that crypto just isn't mature enough yet to have full and unfettered access to a heavily regulated banking system.
 

EmmDee

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Not sure where to start on this...

The world will not implode if we go back to having the liberty to move our own hard earned funds as we wish.
If you can do it without checks, so would criminal organisations. And nobody says anything about the world imploding - it is about the ease of operation for large scale criminals.

When it comes to the real movers in terms of organised crime, the conventional banking system caters for them all day long. Just look at some of the fines dished out in recent months and years to mainstream banks which implicates this.
Yes - where banks have screwed up they have been fined. But that just highlights how much pressure they are under to actually do it correctly. You can't complain about them applying standards while at the same time pointing out the fines where they have failed to do so. The "conventional banking system" doesn't cater to them - it does get used by them if they can. The non conventional does actually cater to them as it doesn't apply any checks. There was a reason Silk Road used Bitcoin.

These are not trivial speed bumps. Lets think this through for a second. I've done nothing wrong yet I have FIAT money in the cryptocurrency ecosystem that I can't get out because of some game getting played at another level? They cut off my access to banking - how is that trivial? I don't agree with being collateral damage in some dispute that's being played out between third parties.
It's not a dispute (other than between you and the bank). If you were planning to transfer significant funds out of the blue from a bitcoin exchange, I would have contacted them in advance, discussed the source of the funds and shown backup. I sold a car once for cash - I called the branch beforehand and explained what I was doing and why I would be lodging a significant amount of cash. As a rule of thumb, anything unusual over €10k should be checked out.

In the crypto-sphere right now there is an exchange that has (rightly) come in for all sorts of criticisms. However, whilst I'm not going to defend them on all fronts, at the heart of the issues that have emerged is the fact that they have consistently had banking denied or pulled out from under them. This has been at the core of decisions they have subsequently made. This is the experience of practically every exchange on the planet.
Exchanges and similar businesses (e.g. Money Transfer Bureaus such as Western Union) have to go through enhanced diligence to sort out their banking needs because there is a higher risk of misuse. They all do it. If the exchange you're referring to can't do it, then it's probably because they don't have control over their business. That's their responsibility not any banks. If they want to play at being cowboys then that's their choice.

They've used this as cover to beat down on an emerging crypto economy by cutting off banking to exchanges. There are multiple examples of same - with legal wranglings in the court systems in most jurisdictions that evidence that.
So... this is fundamentally the lack of understanding. Banking makes no money on cash. No bank is particularly tied to any currency. Physical cash is an expensive overhead that makes no revenue. Banking is about trading risk (understanding it, managing and trading it) - that's fundamentally what banks do. Financing, lending, swapping (currencies, interest rates etc) is essentially about risk. Banks would be all over crypto if it was possible meet regulatory requirements and perform AML and KYC. It's just another currency
 

tecate

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The only time you can do with your money as you wish is, and has always been, when you physically have it in your hands. Since the formation of the banking system, if you choose to use their services, you must abide by their rules. Some of these rules will be set by legislation and regulation, others by the institutions themselves. Banks are service providers, they are entirely free to determine what services they do and do not provide within the constraints of the legal system.
I don't disagree with that. The point is I don't like their damn rules and want out (and there are plenty that share that view even if not so much on AAM). i can't get out until there's enough momentum towards crypto.

You are right though, the world won't implode, but the goal isn't to stop it imploding, it's to make things difficult for fraud and organised crime. The vast majority of people suffering to any great degree from AML legislation are those who have something to hide. It's true these check don't prevent all fraud, but that is no reason to relax them. Just as blood alcohol limits don't prevent all fatalities, no one is pretending that eliminating or relaxing them would improve the situation.
I think we underestimate organised crime. These guys can cut through this like butter. My experience in recent times has been that it's a major drag to the point at which I can't twist or turn. I have friends that are heavily involved in crypto with exactly the same experience -having to take very complex routes to organise their finances.
Crime can be fought in many ways - it doesn't have to involve disrupting peoples lives in doing so.

You're not the only party in the transaction, the other party must also be able to demonstrate they've done nothing wrong. Crypto exchanges find it difficult to impossible to prove this, if they can't do so, it's only proper that they should be blocked from interacting with mainstream banks who have to show compliance. If the bank then has any suspicion whatsoever about your dealings, then their safest course of action is to cut you off. Ask their shareholders would they prefer the bank lose a few customers or risk a compliance finding?
The largest crypto exchanges are implementing AML/KYC as best they can. However, cryptocurrency is not always conducive to such policies. That's the nature of it. I'm not the only party to a transaction but its me that bears the brunt from this policy. There is nothing suspicious about my dealings. In this instance it's to do with efforts to smother a particular exchange.

Signing up to a bank as a customer you give them complete authority to treat you as such. Is it not a little ironic that a crypto system that rails against the banking system is so completely reliant on it in certain aspects? If crypto is all it's cracked up to be, why the need to dump it for FIAT at all? Perhaps the bank had read your $20k prediction for YE'21 and are saving you from losing out? :D
We all inherited the systems we have. It's not realistic to expect a crypto economy to develop in a vacuum without interaction with the pervading FIAT based economy. As regards my need to 'dump' it info FIAT, as per discussions on here, its widely known that crypto is volatile and a nascent technology and accompanying market. It wouldn't be prudent to leave all my assets in crypto.
Interesting line of thought though - that the bank have a highly developed empathetic side :D ...and are trying to save me from myself.

Everything is possible - particularly when it comes to crypto/blockchain and how it may develop. However, as it stands today, I've put my money where my mouth is on the basis that my prediction is closer to reality than the suggestion of Bitcoin having a valuation of zero within the next couple of years. So I'm backing it - but I'm sure you'll understand if I don't put every cent I have on it (or anything else for that matter).

That suggests the banks feel significantly threatened by crypto. I haven't seen much to prove that is the case, it's more that crypto just isn't mature enough yet to have full and unfettered access to a heavily regulated banking system.
Don't have time to dig them out yet but there are court actions worldwide to prove this. There are actions by state agencies that deal with anti-competitive practices that prove it also. The blockchain/crypto progressive state of Wyoming had to pass specific legislation to ensure that blockchain/crypto businesses in the state will have access to banking facilities. In doing so, they acknowledged the absolute difficulty startups were having in this respect. The bill was passed - and the only dissenting voices were from the ...banking community.
 

tecate

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If you can do it without checks, so would criminal organisations. And nobody says anything about the world imploding - it is about the ease of operation for large scale criminals.
We've had this with so many things in the past. Paedos use the internet - but its not a reason to block the internet (yet back in the day when the web was new, that's the sort of rubbish that was bandied about). The very same nonsense is being talked of - with crypto....yet normal everyday people can benefit from it.
Let law enforcement chase the bad guys - but locking my funds (as paypal did recently on my account) or leaving me without a way to access banking (as one bank did recently) is not acceptable. I know you guys believe its a necessary evil - but I disagree. When the cartels need to launder on a grand scale, they have the cooperation of mainstream banking. Ask Danske and HSBC.

Yes - where banks have screwed up they have been fined. But that just highlights how much pressure they are under to actually do it correctly. You can't complain about them applying standards while at the same time pointing out the fines where they have failed to do so. The "conventional banking system" doesn't cater to them - it does get used by them if they can. The non conventional does actually cater to them as it doesn't apply any checks. There was a reason Silk Road used Bitcoin.
Yes, it does and it has! You think HSBC weren't catering for the cartels? How many HSBC executives were imprisoned for that faciliatation (on an epic scale)? If you're not aware of the case, just google HSBC and cartel.

As regards silk road and bitcoin, see above. There's no point throwing the baby out with the bathwater. If I want to use bitcoin for wholesome purposes, I shouldn't be excluded from using it because someone else uses it for illicit purposes.

It's not a dispute (other than between you and the bank). If you were planning to transfer significant funds out of the blue from a bitcoin exchange, I would have contacted them in advance, discussed the source of the funds and shown backup. I sold a car once for cash - I called the branch beforehand and explained what I was doing and why I would be lodging a significant amount of cash. As a rule of thumb, anything unusual over €10k should be checked out.
You're making assumptions there. I opened the bloody account with them on the sole basis that I WOULD be transferring funds gained via crypto into said account. Over and above that, there is a wider dispute between the exchange and other parties - that led to this - but that shouldn't be my problem.

Exchanges and similar businesses (e.g. Money Transfer Bureaus such as Western Union) have to go through enhanced diligence to sort out their banking needs because there is a higher risk of misuse. They all do it. If the exchange you're referring to can't do it, then it's probably because they don't have control over their business. That's their responsibility not any banks. If they want to play at being cowboys then that's their choice.
There isn't an exchange on this planet that hasn't had banking difficulties. Nor has that changed - right now as we speak, there are a world of difficulties in terms of banking services and exchanges. As regards exchanges and control of their business, its a nascent technology and market - that remains partly regulated. Sure, there are cowboys - but there are also very professional exchanges. It doesn't matter what they do, every single one of them has the same difficulty despite how closely they try to follow this AML/KYC crapshow.

So... this is fundamentally the lack of understanding. Banking makes no money on cash. No bank is particularly tied to any currency. Physical cash is an expensive overhead that makes no revenue. Banking is about trading risk (understanding it, managing and trading it) - that's fundamentally what banks do. Financing, lending, swapping (currencies, interest rates etc) is essentially about risk. Banks would be all over crypto if it was possible meet regulatory requirements and perform AML and KYC. It's just another currency
Correct in cases and not correct in others. There are plenty of examples of actions being taken against bank for anti-competitive practices when it comes to crypto. Don't have time to dig them out right now but google it if youre curious.
 
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Leo

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I don't disagree with that. The point is I don't like their damn rules and want out (and there are plenty that share that view even if not so much on AAM). i can't get out until there's enough momentum towards crypto.
I think the issue really is you got out, but now want to move your holdings back in under their rules. I don't see it getting any easier to do so any time soon. I don't see the upside for any major bank, particularly in the Irish market in taking that risk.

I think we underestimate organised crime. These guys can cut through this like butter. ...
Crime can be fought in many ways - it doesn't have to involve disrupting peoples lives in doing so.
Some can, the vast majority can't. If it were so easy you wouldn't see sophisticated muti-national organisations stockpiling cash and heavily invested in physical assets and costly money laundering schemes. As I said above, AML rules are invisible to the vast majority of people, this is an edge case, and does not justify a relaxation of the rules.

I'm not the only party to a transaction but its me that bears the brunt from this policy. There is nothing suspicious about my dealings.
I get that, but the bank have significant responsibilities beyond ensuring you are above board. They need to be able to follow the money. You're only suffering because you choose to deal with an entity that cannot satisfy the criteria for engaging with our banks.

It's not realistic to expect a crypto economy to develop in a vacuum without interaction with the pervading FIAT based economy.
This is a challenge the crypto world may need to solve if it wants to thrive. It will continue to be easy to buy into crypto, but to cash out and move back to FIAT, you will always need to play by their rules. Longer term, this might be a good thing for crypto, for it to thrive, perhaps people need to focus less on the ability to divest and more on the challenges preventing its broader adoption.

Interesting line of thought though - that the bank have a highly developed empathetic side :D ...and are trying to save me from myself.
Very much tongue in cheek, I'm certainly not going to pretend your or my interests come anywhere close to even making it onto their priority list.

Everything is possible - particularly when it comes to crypto/blockchain and how it may develop. However, as it stands today, I've put my money where my mouth is on the basis that my prediction is closer to reality than the suggestion of Bitcoin having a valuation of zero within the next couple of years. So I'm backing it - but I'm sure you'll understand if I don't put every cent I have on it (or anything else for that matter).
Yep, wise move. I don't think it'll drop to zero soon either, but I still see too many downsides that suggest to me Bitcoin isn't the future of crypto.
 

EmmDee

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As regards silk road and bitcoin, see above. There's no point throwing the baby out with the bathwater. If I want to use bitcoin for wholesome purposes, I shouldn't be excluded from using it because someone else uses it for illicit purposes.
This is - in some ways - the nub of the issue. How does a bank tell the difference between a wholesome guy (like you) and someone who isn't when the exchanges from where the money is transferred won't (or can't) differentiate.

You can quote all the banks having been done for money laundering but it really makes my point. The banks are in jeopardy (institutionally and personally) if they don't demonstrate proper efforts to identify and stop illegal activity. The exchanges aren't and therefore don't. I think you significantly underestimate the level of AML monitoring going on in the banks. Let's say - if I wanted to launder money I wouldn't walk up to a bank and open an account
 

tecate

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I think the issue really is you got out, but now want to move your holdings back in under their rules. I don't see it getting any easier to do so any time soon. I don't see the upside for any major bank, particularly in the Irish market in taking that risk.
Yes, for that reason, Irelands only proper crypto exchange have had banking withdrawn by three irish banks and now have to go overseas for their banking needs. The irony here is that governments need to make their minds up. Either they ban crypto or they embrace it and implement new regulations that are geared towards it (and the same with securities law). AML/KYC were built for conventional banking services and not for this new market.

Some can, the vast majority can't. If it were so easy you wouldn't see sophisticated muti-national organisations stockpiling cash and heavily invested in physical assets and costly money laundering schemes. As I said above, AML rules are invisible to the vast majority of people, this is an edge case, and does not justify a relaxation of the rules.
An edge case but not for anyone with the most basic of dealings in the crypto economy. See above. They need to come to a decision - either ban it or embrace it.

I get that, but the bank have significant responsibilities beyond ensuring you are above board. They need to be able to follow the money. You're only suffering because you choose to deal with an entity that cannot satisfy the criteria for engaging with our banks.
Not much in the way of choice. I 'chose' one because it was the only one available to me with a particular type of FIAT off-ramp (that I had to have). There seems to be a particular hard on for this particular exchange. However, having spoken to many in crypto circles, the experience is always the same. It doesn't matter what exchange it is. The reality is that governments, bureaucrats and politicians (like the Democrat Rep. from California last week that tried to table a bill to have crypto banned) don't know what they're doing or how to 'manage' it.

This is a challenge the crypto world may need to solve if it wants to thrive. It will continue to be easy to buy into crypto, but to cash out and move back to FIAT, you will always need to play by their rules. Longer term, this might be a good thing for crypto, for it to thrive, perhaps people need to focus less on the ability to divest and more on the challenges preventing its broader adoption.
Crypto is the upstart - so it's very difficult. You can't have crypto/blockchain startups operate without banking facilities. If they truly frustrate it, then it will go underground and any chance they have at controlling it at that point will be gone. Not that that would be good for anyone in crypto - but it could be a lose/lose in the long term for all concerned.
That said, its one of the reasons stablecoins have emerged. If the crypto economy can grow to a certain basic level, then there wont be the same burning need to exchange between the two. It's the growing pains in the meantime involved in that happening...will take a good bit more time yet.

You can quote all the banks having been done for money laundering but it really makes my point. The banks are in jeopardy (institutionally and personally) if they don't demonstrate proper efforts to identify and stop illegal activity. The exchanges aren't and therefore don't. I think you significantly underestimate the level of AML monitoring going on in the banks. Let's say - if I wanted to launder money I wouldn't walk up to a bank and open an account
Whilst there has also been some anti-competitive practice, I don't disagree with what you're saying. I just fundamentally don't agree with measures that make things intolerable for ordinary people. Having said that, I accept that most people are oblivious to it - but its still not the point. Separate regulation is required.
 

Duke of Marmalade

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This is a challenge the crypto world may need to solve if it wants to thrive. It will continue to be easy to buy into crypto, but to cash out and move back to FIAT, you will always need to play by their rules.
Maybe I see an explanation for the recent upsurge in price. If it is easy to buy, but to sell you have to comply with conventional rules, which is almost against a crypto’s religion then that would be a massive distortion in supply/demand.

Really only two other possible reasons for the price surge
1. A sudden jump in the demand to buy lattes with crypto. or
2. Renewed speculation that the price will soar If this then I have the supplementary question: what is fueling this speculation?
 

EmmDee

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Maybe I see an explanation for the recent upsurge in price. If it is easy to buy, but to sell you have to comply with conventional rules, which is almost against a crypto’s religion then that would be a massive distortion in supply/demand.
Actually when you think about it, unless you mine coins, the funds to buy coins come from the regulated cash infrastructure. So the brokers and exchanges benefit from the checks, balances and infrastructure of the traditional payments industry. They just don't want to put the effort into doing their own work going the other way so there are problems sending it back into that infrastructure.

If the brokers and exchanges performed similar KYC on their clients and performed the same monitoring and compliance with AML, then it wouldn't be (as much of) an issue. Western Union or similar MTB's had a very similar challenge - people walking into offices with cash and transferring it to people across the banking infrastructure. They had similar problems with banks stepping away from it. They resolved it to some extent (though not without difficulty) by gathering and checking documentation on the people coming into the offices and performing checks against sanctions and AML lists
 

tecate

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Maybe I see an explanation for the recent upsurge in price. If it is easy to buy, but to sell you have to comply with conventional rules, which is almost against a crypto’s religion then that would be a massive distortion in supply/demand.
Ok, I'll address the 'crypto's religion' bit first. It seems its against the 'conventional religion' - as its them objecting with us using their services....so that's the 'religion' jibe dealt with :cool:
As regards this difficulty being a reason, well it's always been a difficulty from the very beginning...so makes no difference.

So, the reasons for the uptick....

- Conventional markets have tanked with the trade war fallout. Guys in equity were scrambling for options in terms of where to put their capital - and Bitcoin became part of that narrative.

- Bakkt - the futures market which has been set up by the NYSE - came out and said that they will commence offering physically settled Bitcoin futures in July. This is a big deal. We already have futures - but not physically settled futures - and that will have an effect on the market. Bakkt are collaborating with Microsoft and Starbucks on this - so it's significance goes beyond futures in terms of what is planned. That said, this has been delayed already by many months and there's a good chance that it won't make July either.

- Fidelity (one of the worlds largest asset managers) came out and said that they'd be trading crypto for their clients within the next few weeks.

- At Consensys (New York Blockchain Week event), promotional material emerged that suggested that Ebay would start accepting bitcoin as payment. We have pics of the promotional material yet no denial or acknowledgement from Ebay. Make of it what you will.

- Indirectly (through a particular payment processor) - Starbucks, Whole Foods, Bed Bath n Beyond and a number of other U.S. retail chains are now accepting Bitcoin as payment. Whole Foods is a major nationwide chain and owned by Amazon.

- The Halving. Next year, the reward that miners receive will be cut in half - as happens every 4 years. In the lead up to this, Bitcoin price always rises as the scarcity of the cryptocurrency intensifies.

- Whilst everyone was watching the crypto market car crash in 2018, people in the industry were focused on building it out. There has been plenty of good work done in the space (albeit there's plenty still to be done in every respect).

Take your pick. In terms of the rush right now, I would be inclined towards the first one - with some influence from the others.

2. Renewed speculation that the price will soar If this then I have the supplementary question: what is fueling this speculation?
All of the above.
 

EmmDee

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Separate regulation is required.
I agree that the nature of regulations may need to be different but it would have to achieve the same thing - who is initiating a transfer, who is receiving it, scrub names against sanctions lists, monitor unusual transactions and report them. If these aren't achieved but it is still plugged into the mainstream infrastructure then it just becomes a massive loophole
 
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