Bitcoin Assault

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USNEWSGHOST | The Rundown Live

BITCOIN: Governments & central banks on a assault. Under fire from all angles to no surprise. Bitcoin executives are being arrested, the Mt. Gox exchange was taken down, and now a denial of service attack (DDoS).

Bankers fear Bitcoin, Bitcoin is being hit by attacks from unknown computer hackers who are sending “mutated” lines of code into the program that runs the virtual currency, a spokeswoman from its main trade organization said in a statement on Tuesday.

The attacks are responsible for problems experienced by two bitcoin exchanges that caused them to temporarily halt withdrawals by customers who stored bitcoins in digital wallets provided by the exchanges, the Bitcoin Foundation said in a statement.

Price of Bitcoin has diverged heavily across its several exchanges. This has led to the Bitcoin market itself becoming siloed.

Bitstamp, BTC-E, and Mt.Gox halted withdrawal of Bitcoin from their exchanges for varying amounts of time due to a potential exploit. Both Bitstamp and BTC-E have resumed withdrawals. Mt.Gox, the first to force users to stop removing Bitcoin from its exchange, remains closed in that regard.

This had led the cost of Bitcoin on Mt.Gox to fall dramatically. Sitting around $900 through most of January, following previous highs north of $1,200, Bitcoin is now worth under $300 on Mt.Gox, where it has traded in recent hours on the low-end of the $200s. Those who own Bitcoin on the exchange are betting that Mt.Gox won’t be able to solve its problems, and that their deposits are not secure; they are willing to let their Bitcoin go for far below-market rates.

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New moves by regulators

Also on Tuesday, Canada said it will toughen rules targeting money laundering and terrorist financing to keep a closer eye on the use of virtual currencies.

Meanwhile, in Washington, Benjamin Lawsky, superintendent of New York’s Department of Financial Services, expects to adopt consumer disclosure rules, capital requirements and a framework for permissible investments with consumer money. Russia has banned Bitcoin.

Janet Yellen, the new Fed chairman and her establishment wants Bitcoin obliterated.

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