I thunk that is scaremongering nonsense. This is nothing to do with a free market, this is a software bug that has been well known but until yesterday it didnt affect many people. Someone is now trying to use it to obtain some sort of advantage but it doesnt actually allow them to steal any bitcoins.
Quite how you manage to link it to be a result of a "truly free market" is beyond me.
So what? This is an exchange not a bank. There are no missing bitcoins so there is no liability issue. All that has happened is that there has been an introduction of a delay in withdrawing. Because that delay is 72 hours it seems like a long time in bitcoin because of usually instant transactions. Compared to traditional banking it is relatively normal length of time to access funds.
The lines are blurred here between an exchange and a bank. Exchanges normally don't hold your personal assets. Bank of America holds my equities. I trust them to execute the trades on my behalf on the NASDAQ exchange. If something goes wrong with the exchange, I trust Bank of America to have my back (or at least trust that I have legal ramifications if they don't).
With Bitcoin the entity holding your assets and operating the trading mechanisms are generally the same company. This leaves a customer in a weaker position and could allow the exchange/brokerage/bank to get away with shadier practices. They can do things like delay the execution of a transaction until it better benefits them. Or they can unillaterally suspend the ability to withdraw funds with no advance notice, just as what is happening here.
I think you are being disingenuous if you think your bank don't do similar things. Ever had to bank a cheque? When you deposit it into your account they immediately debit the account of the person that wrote the cheque, does it appear in your account for spending immediately? No you wait 3-5 working days, what happens in the interim? The bank hold it and accumulate interest on it and then you are allowed access to it.
And if the person who had their account debited would drop to a negative balance at the end of that 3-5 days the check will bounce and they will be credited back the amount of the check.
Edit: You of course do not get the funds in the case they are credited back to the original person at the end of the 3-5 days, you do probably get a fee for trying to deposit a bad check though!
My banks regularly have bugs in their software, and regularly make mistakes. The mistakes are "on them". So what?
At the end of the day I don't have access to my money, or I have to call their "customer support" and spend hours explaining the problem that they created.
If the bank goes down completely (as in: goes bankrupt), my deposits are only guaranteed by the state up to a certain limit, which isn't that high.
Regulation and "liability" buy me very little in real terms.
Not sure why this is being down-voted as it is essentially true.
Large banks do have bugs, and sometimes even admit it. [0][1]
The fractional reserve system basically means if there is a problem, you need to be the first at the counter. If you are not, you will only get a certain amount of money back.
>The fractional reserve system basically means if there is a problem, you need to be the first at the counter. If you are not, you will only get a certain amount of money back.
In any system with deposit or investor insurance, e.g. the United States, you will get back the full insured amount (up to $250 000 for bank deposits, $500 000 for investor funds). Beyond that you will be treated as the senior creditor that, as a depositor or investor, you are. If you want more certainty as to the return of your capital, buy Treasuries.
What sort of bugs have you seen in your bank? My money, at BoA (was several different banks before they got merged into that monstrosity) and later USAA has always been accessible to me. No debits against my account that didn't belong.
Quite how you manage to link it to be a result of a "truly free market" is beyond me.