It is probably no hidden that Bitcoiners are not fans of regulation. What is broadly misunderstood though is that the aversion is not to regulating in general. We understand that in the real world, the bad fiscal powers are never regulated in a practical sense. Consumers, on the other hand, are heavily regulated .
Regulations are about never designed to protect the consumer. alternatively they are put in locate as a way to control the flow of consumer spend and to protect the interests of the fiscal sector. The New York BitLicense is a good example of this problem, as it was designed to favor credit card companies and put a burden on Bitcoin development and toleration .
immediately Coinbase has been banning exploiter accounts that send Bitcoin to gambling sites, even though on-line gambling is not illegal. One Reddit exploiter besides complained that coinbase banned his report for allegedly purchasing cannabis products with coins purchased from the servicing.
“ I have been a long time coinbase customer, buying 1-3 times per month, I got an e-mail nowadays saying they are banning me from using their services because of a ToS violation. I e-mailed them back to ask what the violations [ were ] and they told me that they have attest that I used some of the BTC I bought for cannabis/cannabis seeds. They gave me a specific BTC transaction and said it was for drugs and would n’t listen to anything I had to say. ”
Another drug user ‘s account was shut down after he was accused of selling coins on LocalBitcoins after purchasing them on Coinbase :
“ Because I buy a few bitcoins a week from Coinbase ( although sometimes I will go months without buying any ) I was flagged as having enough bulk to potentially be a Money Services Business ( MSB ) and the Coinbase ‘ complaisance team ’ mounted an investigation against me. They determined that ‘ they have reason to believe ’ I am selling Bitcoins on LocalBitcoins, even though they have n’t said what that reason is, and therefore are suspending my report. ”
Coinbase explains that the company is only trying to stay in conformity with union anti-money launder regulations and drug laws. We understand that any company has a fiduciary province to protect the company for its shareholders. But it appears that Coinbase has crossed the line by not only tracking coins purchased through its service, but besides tracking how users spend their Bitcoins after withdrawing them from their Coinbase wallets.
These types of practices are the identical antithesis of Bitcoin and virtual currencies, and they are the main reasons why most Bitcoin users fear regulation. It is much used to regulate taste preferably than safety, and it can besides be used by a company to suppress the business of its competitors. These are arbitrary overreactions by a company that fears the laws that they claim to respect .
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