One of the first casualties in the US regulatory war on Bitcoin announced today that it will suspend operations on November 30th, effectively shutting down 5% of the Bitcoin network hashing power.
BTC Guild , one of the oldest remaining Bitcoin pools, announced today that it would be closing its doors and shuttering its business. Registrations are closed to new users effective immediately.
The site’s founder, Michael Marsee, sites US regulation as one of the main reasons for his regretful decision.
US government/regulators are already taking stances against specific business types in Bitcoin, applying requirements which would be impossible for BTC Guild to operate under if they attempt to extend regulation into pooled mining, either directly or indirectly due to unclear definitions.
Marsee went on to explain further:
Nobody will mine on a pool which requires them to provide personally identifiable information when they can change a single line in their configuration to point elsewhere.
According to Andrew Ittleman, an attorney at Fuerst Ittleman David & Joseph, PL, this week’s FinCEN rulings are a troubling sign for how the Bitcoin industry could be treated by the agency as a whole.
It seems to me that, according to FinCEN, any company that’s dealing with bitcoin is a money transmitter, and I don’t know if I could have said that before before I read the payment processor note.
If government regulators can continue to successfully pressure other mining pools into shutting down, we could eventually begin to see an impact to the overall security and stability of the Bitcoin network.
Mining pools are a way for miners to combine their computer resources and share their hashing power, while splitting the reward equally, according to the amount of shares they contribute to solving a block. These pools are crucial in the operation of the Bitcoin network.
Do you think Bitcoin pool operators should be defined as money transmitters? Log in below using your favorite social media network and weigh in on the discussion.
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