Bitcoin Anonymity Dream: Dying?

While the public nature of the transaction record makes many scoff at those who think Bitcoin has any anonymity feature at all (I find this Wiki a decent lay-understandable explanation of how Bitcoin can be anonymous, and how it's vulnerable), I wrote last week about how the federal government's attempts to regulate Bitcoin exchangers meant that any anonymity for those who want to turn Bitcoin into government fiat money may be a dead letter.

And today this news from Silicon Angle:

Less than 24 hours after the DOJ outlined its case against Liberty Reserve, Bitcoin’s largest exchange site Mt. Gox has stated that from now on, it’ll require ID verification from anyone who wants to deposit money with it in order to buy bitcoins. We’re not totally sure if this is a knee-jerk reaction to Liberty Reserve’s take down or not, but certainly one of the DOJ’s major gripes with that payment processor was that it let just about every man and his dog sign up without questions.

Here’s Mt. Gox’s full statement:

Statement Regarding Account Verifications

The Bitcoin market continues to evolve, as do regulations and conditions of compliance for Mt. Gox to continue bringing secure services to our customers. It our responsibility to provide a trusted and legal exchange, and that includes making sure that we are operating within strict anti-money laundering rules and preventing other malicious activity.

As a result, beginning May 30th, 2013 all Mt. Gox user accounts are required to be verified in order to perform any currency deposits and withdrawals. Bitcoin deposits do not need verification, and at this time we are not requiring verification for Bitcoin withdrawals.

In the past two months Mt. Gox has invested in more than doubling our verification support staff, and we are currently able to process most verifications within 24~48 hours.....

Forbes explains what this means:

On Thursday Mt. Gox announced that it would begin requiring “verification” for all accounts seeking to deposit or withdraw currencies other than Bitcoin, a measure that means users would need to submit government identification and a utility bill or information about the company they work for to trade Bitcoins for traditional money, in effect ending anonymous use of the service.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    Based on the DoJ's reasoning for its action against Liberty Reserve, anyone who pools money is engaging in potential money laundering.

  • Paul.||

    More technically, anyone who exchanges goods and services without a regulatory body standing between the transaction is engaging in illegal activity and money laundering.

  • garand555||

    And conversely, if there's a regulatory agency involved, it isn't money laundering. Or so HSBC tells me.

  • DEATFBIRSECIA||

    Et tu, Bitcoin?

  • Paul.||

    Goods are changing hands without congressional oversight. This will not continue. I promise that.

    Never underestimate the government's ability to ban or regulate something through sheer force of will.

  • MOFO.||

    Thanks for not repeating the falsity that bitcoins are totally anonymous. I think you are one of the first reporters to catch on to the notion that the blockchain is totally public.

  • Michael B.||

    Just move your Bitcoins to Canada. The Canadian government has said it won't regulate it and that it will be a safe haven if other governments crack down on it.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement