New US Regulations In Place For Bitcoins

New US Regulations In Place For BitcoinsIn the United States online gambling is still stuck in a legal grey area. That may change in the near future as several states go ahead with plans to launch online gambling operations. Many American players use bitcoins for their online gambling transactions since the virtual currency allows players to remain anonymous. Bitcoins have even played a part in the recent banking crisis in Cyprus. Bloomberg News has reported that last week bitcoin increased in value by 30%. In Spain three bitcoin applications have topped Spain’s download charts after news reports said that Cyprus was planning to raid domestic bank accounts to off a $13 billion bailout bill.

Nick Colas, chief market strategist at ConvergEx Group, stated “This is an entirely predictable and rational outcome for what’s happening in Cyprus. If you want to get a good sense of the stress European savers are feeling, just watch Bitcoin prices.” Bitcoins are subject to wild price fluctuation and cyber criminals have already developed malware to steal bitcoin data from users. Despite the risks many Europeans have more confidence in bitcoins than they do in the banking system. In an article in Spiegel Online German economist Peter Bofinger told reporters “European citizens must now fear for their money.

In the United States bitcoin users face new federal regulations. The US government is alarmed by the rising popularity of virtual currencies that are not tied to any government entities. Recently the Financial Crimes Enforcement Network of the U.S. Treasury Department published guidelines dealing with virtual currencies. The government sees potential for ‘money laundering’ and ‘illegal’ activities. Bitcoin operators in the US will have to comply with Treasury’s bookkeeping requirements. It is now mandatory that all bitcoin transactions of $10,000 or more be reported to the Treasury.

Bitcoins have no real physical existence and open source software is required to interact with other bitcoin users and merchants. Many American players are under the mistaken impression that bitcoin transactions are untraceable. Once bitcoins are exchanged for cash the transaction can be traced. In spite of the hassles involved many online bingo and casino players in the US are using bitcoins. In states where online gambling is illegal bitcoin transfers involving online bingo sites and casinos will remain illegal.

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