Bitcoin suffered a major blow to its international reputation on Monday after Thailand became the first country to outlaw the virtual currency outright.
The online-only currency biz had been trying to operate lawfully in the Southeast Asian country, requesting guidance from the Bank of Thailand about which licenses it needed to procure, it said in a statement.
The bank, which acts as the governing body of Thailand’s financial services industry, had initially ruled Bitcoin was not a currency, however, on Monday it changed its mind and apparently invited the firm back to a meeting with 15 bank officials.
The Bitcoin statement continued with the following:
At the conclusion of the meeting senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets the following Bitcoin activities are illegal in Thailand:
Buying Bitcoins; Selling Bitcoins; Buying any goods or services in exchange for Bitcoins; Selling any goods or services for Bitcoins; Sending Bitcoins to anyone located outside of Thailand; Receiving Bitcoins from anyone located outside of Thailand.
The ruling will be a blow to the virtual currency as it seeks to stay afloat in the face of increasing pressure from financial authorities across the globe.
Back in May, the US Department of Homeland Security prevented Americans from reaching Mt Gox – the world’s largest Bitcoin exchange – pending a further investigation into whether it was operating as an "unlicensed money service business".
There’s still a great deal of suspicion in official circles about the crypto-currency system which many suspect attracts a motley crew of punters including money launderers, terrorists and drug dealers.
That said, if financial regulators around the world won't even let Bitcoin get the licenses it needs to operate and be vetted properly, its hands will be pretty much tied. ®