Zero Legal Protection For Holders of        BitcoinUndoubtedly virtual currency suffered heavy blows lately. After the collapse of the largest Bitcoin exchange Mt. Gox based in Tokyo a week ago, the nightmare for investors and holders of the currency continues. Another bad news came today from the Canadian bitcoin bank Flexcoin after the company announced closing down its activities due to a loss of 896 Bitcoin at a worth of approximately $ 600,000 stolen by hackers. Bitcoins stored offline (cold storage) which are kept in computers not connected to the Internet remain unaffected by the theft .

The future of virtual currency seems uncertain. Confidence in Bitcoin as an investment and reliable means of payment greatly reduced. The most serious concern for the development of Bitcoin is legal uncertainty and complete lack of legal mechanisms for the protection of depositors upon bankruptcy. Currently holders of Bitcoin have zero legal protection of his interests. As the countries still have no legal regulation of Bitcoin, the transactions with virtual currency are beyond the reach of the law.
After applying for bankruptcy protection Mt. Gox bitcoin exchange, which lost nearly half a billion dollars in Bitcoin and cash after hacking attack in poorly protected computer system of the company, the Japanese government is taking steps to adopt rules for trading virtual currency . The Cabinet considering possible mechanisms for regulating trade with crypto currencies within the existing laws. Despite the lack of a clear strategy due to the anonymity of transactions , the authorities are considering the idea of taxing these transactions.

The measures of the Japanese government shall not remain isolated internationally. The U.S. Congress is about to consider legal options to regulate transactions with virtual currencies like Bitcoin. Britain is a principled advocate of Bitcoin and is expected to abandon the declared intention of taxing transactions with them.

Series of unfortunate events with Bitcoin can lead to one undoubtedly positive outcome - the legalization of crypto currency.
Tags: Bitcoin