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Comment: Weasely sentence in the article (Score 3, Insightful) 134

by Arthur B. (#46619615) Attached to: Mt. Gox Questioned By Employees For At Least 2 Years Before Crisis

"It is unclear how Japanese law would treat any such diversion of customer funds as Mt. Gox was not regulated as a financial institution. As a private firm in which Karpeles held an 88 percent stake with no declared debt, Mt. Gox was under no obligation to share any details on its finances."

The lack of regulation means that they cannot prosecute the *lack of disclosure* but the article makes it sound like it implies they cannot prosecute the fund diversion itself. Of course you can, it's embezzlement, there are laws on the book against it, and no you don't need to be "regulated" for these laws to apply.

Financial regulation is something that can make such frauds harder to perpetrate, it's not what makes is illegal. Sheesh.

Comment: Go ahead regulate (Score 1) 385

by Arthur B. (#43321237) Attached to: Ask Slashdot: Should Bitcoin Be Regulated?

Bitcoin was built to evade controls. Sure you can regulate that transactions above a certain amount must be reported, but good luck enforcing it. Transactions can be split into thousand of components at no cost, be dispatched through mixers to thousands of wallets. If the government become savvy enough to track such movements, then anonymous internet banking with chaumian cash can be implemented on top of bitcoin.

So if regulation gives the government the temporary illusion that it's controlling bitcoin, then by all means start regulating. The alternative is government trying to kill bitcoin, which it might be able to pull off at this stage by targeting the exchanges.

Comment: Re:Systematic problem with democracy (Score 1) 536

by Arthur B. (#43236503) Attached to: Declassified LBJ Tapes Accuse Richard Nixon of Treason

Ah then I'm surprised you're not mentioning the horrible record of Woodrow Wilson, probably the worst president of the US ever. One time member of the KKK, when he became the dean at Princeton he *re*segregated the school.

Also, in the pursuit of democracy, he encouraged the Russian revolution which eventually led to the rise of the Soviets, he pushed for the harsh conditions of the Versailles treaty which became fertile ground for Nazism. Also he created the Federal Reserve, the first permanent income tax, instituted a draft.

Pretty evil guy.

Comment: Scrape the idea (Score 5, Interesting) 649

by Arthur B. (#42789019) Attached to: Richard Stallman's Solution To 'Too Big To Fail'

First of, the economy isn't a machine, it's organic, and this engineering approach generally fails. Companies react to regulation, and regulation itself is the result of government, another organic entity. When this type of laws are enacted, the first thing that happens is that concentrated business interest will make sure they actually benefit from the regulation. It can take many forms. Maybe some corporations will be grandfathered in and therefore manage to keep at bay competitors who can't reach a competitive size, maybe the law will have exemptions that only politically connected firms can obtain. It's misguided to push for a law without taking into account the way it will be distorted by the political process. Contrast this to the viral - hence organic - approach the GPL took.

Second, too big to fail is about the systemic risk that some financial firms exhibited. Walmart is big, Google is big, but they're not too big to fail in the sense that their failure wouldn't particularly cause havoc. If Walmart fails, many different sellers can buy the stores and keep supplying them with goods. In the case of financial companies, the argument went as follow: if a bank fails, many other financial companies may be in trouble if they hold financial instruments whose collateral ultimately is guaranteed by that bank. Unfortunately, it can take a long time to sort out who is really it, and during that time, it becomes very risky to lend to anyone, for fear that they might be exposed to the failing institution. This in turns cause more financial companies to fail in a domino effect. That's the theory at least. I don't know if I buy it, but at any rate, it makes the case that the banks were too heavily interconnected to fail, not too big. Columbia professor Rama Cont has suggested that the solution to this problem is to emphasize clearing houses to bring in transparency in who holds what.

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