How eBay Could Rescue Bitcoin From the Feds
(Wired) Bitcoin has a big problem. Just ask David Spitzer. On Aug. 20, Spitzer sold a Bitcoin on Mt. Gox, the world’s best-known Bitcoin exchange, and immediately tried to move the money to his U.S. bank account. Twenty-one days later, he’s still waiting for the cash to appear. “It’s taking an extraordinary amount of time,” he says.
Earlier this year, after the feds seized its U.S. bank accounts — and $5 million in cash — Mt. Gox temporarily suspended transfers to the United States. At the time, the company said, it was halting transfers in order to pull off a technology upgrade, but as far as U.S. customers like Spitzer are concerned, it hasn’t been much of an upgrade. It’s seriously hampering their ability to use the Bitcoin system.
Like other Bitcoin exchanges, Mt. Gox is having a hard time with U.S. banks because there are big questions about whether it meets federal and state money transmission business regulations (the company did not respond to messages seeking comment). But there’s another operation that runs both a marketplace where Bitcoins are bought and sold and a fully compliant money-transmitting business that, observers say, could rescue Bitcoin from its biggest problem. That company is eBay, and the money transmitter is its well-known subsidiary, PayPal.