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Author Topic: Is bit coin legal in the US?  (Read 43357 times)
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June 30, 2010, 08:27:38 PM
 #1

Is running bit coin legal in the US?  In particular:

http://www.law.cornell.edu/uscode/html/uscode18/usc_sec_18_00001960----000-.html

quote:

TITLE 18 > PART I > CHAPTER 95 > § 1960
Prev | Next
§ 1960. Prohibition of unlicensed money transmitting businesses

(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.
(b) As used in this section—
(1) the term “unlicensed money transmitting business” means a money transmitting business which affects interstate or foreign commerce in any manner or degree and—
(A) is operated without an appropriate money transmitting license in a State where such operation is punishable as a misdemeanor or a felony under State law, whether or not the defendant knew that the operation was required to be licensed or that the operation was so punishable;
(B) fails to comply with the money transmitting business registration requirements under section 5330 of title 31, United States Code, or regulations prescribed under such section; or
(C) otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity;
(2) the term “money transmitting” includes transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier; and
(3) the term “State” means any State of the United States, the District of Columbia, the Northern Mariana Islands, and any commonwealth, territory, or possession of the United States.

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June 30, 2010, 09:21:46 PM
 #2

I am not a lawyer.

But it looks to me like No, just running Bitcoin doesn't make you a "money transmitting business."  To be a "business" you have to be charging people for your service.

If you're running Bitcoin to buy or sell goods or services in exchange for bitcoins, I'd say you're not in the money transmitting business.

However, if I were to start a company in the business of buying and selling Bitcoins, or that was a Bitcoin payment processing intermediary that took a percentage of transactions between buyers and sellers, I'd talk to a lawyer and jump through all the legal hoops (looks like here in Massachusetts I'd need a license and would have to post a $50,000 bond).

Or to put it in more concrete terms:  I am not a money transmitting business when I use my credit card to pay for something from Amazon.com.
And Amazon.com is not a money transmitting business just because they accept payments.

However, Amazon Payments, Inc. (Amazon's Paypal competitor) is licensed as a money service business in a bunch of US states.

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July 01, 2010, 12:14:54 AM
 #3

So, does running the bc agent, and then selling your bc's on BCM illegal?
Or just, like madhatter's service, if he were in the states, unlicensed would be illegal?
I am not a lawyer.

But if you generated bitcoins and then sold them I'd think you'd only done something illegal when you fail to declare that income on your income tax return.  Just like if you grew tomatoes in your back yard and sold them to somebody.  You aren't likely to get into any trouble until you make a lot of money on tomatoes and then fail to report that income to the IRS (or you get shut down for farming in a residential zone or something).

I think that applies to what madhatter is doing (taking payment for bitcoins through the mail).  But again, I am not a lawyer.

Will I see you in Amsterdam?
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July 01, 2010, 01:26:17 AM
 #4

What if you based your operations in switzerland or some sovereign nation outside US jurisdiction?
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July 01, 2010, 07:32:08 AM
 #5

What if you based your operations in Switzerland or some sovereign nation outside US jurisdiction?

I had suggested this a long time ago in a previous post as an option to those who absolutely insisted on incorporating.

De facto statelessness works much, much better. Wink And you don't even have to move! Tongue

https://secure.wikimedia.org/wikipedia/en/wiki/Stateless_person
(This article is lacking information, there is more to it.)

As a 'de facto' stateless person you are removed from all statutory obligations. You are still in a "country" (the land), but you remove the applicability of the corporate powers.

Most (commonwealth) countries of the world exist in two forms. They become "one" under the law (and in the courts) through a legal principal called 'joinder'.

One part of a country under joinder is is the physical land, the other is a corporation. The physical lands are under the rule of the king/queen with whom I invest (and others, unknowingly) my sovereignty. This jurisdiction is 'de jure'.

The corporate entity (with the same name as the land(s), or usually very similar anyway) exists for commerce and statutes only. This jurisdiction is 'de facto'.

Definitions:

de facto in law, it is meant to mean "in practice but not necessarily ordained by law" or "in practice or actuality, but without being officially established".

De jure is an expression that means "concerning law".

By becoming de facto stateless, in essence, it renders the contracts (statutes/bylaws) null and void 'ab inito' and everything in court has to be dealt with under Common Law. (Also called the 'law of the land'. I'm sure you've heard that term before in various sworn oaths. It is called this for good reason. It is literally the customs of the people who live "on land". lol!)

Commerce with fiat currency is regulated in the 'de facto' arena by the use of statutes. Take a dollar bill into Common Law (de jure) and it is just piece of paper. Quite literally. It has the value of paper. Whatever a sheet of paper goes for in gold/silver/"insert barter item here" is what it is worth. In my opinion you can't even write on it, so I'd rather have blank paper.

More food for thought: Who actually owns the paper? Is your signature on it? Is there a copyright on it? When they demand payment in dollars are you just returning their property? Should you even take these demands personally? Wink

Gold/silver coins that are "minted" (I could go on and on about what minting really is and means in law) actually work in both jurisdictions. They have a legal face value (de facto), and a lawful real intrinsic value (Common Law / de jure jurisdiction). More examples of dual jurisdictional things (if you want to research more on your own) are: bills of exchange (precursors to the modern "check" or draft), bills, demands, and notices.

Anyway, I could drone on and on and upload document after document to prove all of this but I do have job and limited time. Maybe I should start a school and charge tuition in Bitcoins. Tongue
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July 01, 2010, 12:15:57 PM
 #6

National currencies are money. Bitcoins are not money. Bitcoins are digital property. Bitcoins are marketed as an electronic currency, but because their value is not tied to any national currency nor any physical commodity, it may or may not actually be an electronic currency. Buying and selling bitcoins is legal. Knowingly buying or selling bitcoins, or anything else for that matter, with or for illegally obtained money is laundering and is illegal. For more information about the Department of Justice's view on digital currencies in relation to money laundering, refer to this publicly available national threat assessment. Have a nice day!

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July 11, 2010, 12:52:40 PM
 #7

What if you based your operations in Switzerland or some sovereign nation outside US jurisdiction?

I had suggested this a long time ago in a previous post as an option to those who absolutely insisted on incorporating.

De facto statelessness works much, much better. Wink And you don't even have to move! Tongue

https://secure.wikimedia.org/wikipedia/en/wiki/Stateless_person
(This article is lacking information, there is more to it.)

As a 'de facto' stateless person you are removed from all statutory obligations. You are still in a "country" (the land), but you remove the applicability of the corporate powers.

Most (commonwealth) countries of the world exist in two forms. They become "one" under the law (and in the courts) through a legal principal called 'joinder'.

One part of a country under joinder is is the physical land, the other is a corporation. The physical lands are under the rule of the king/queen with whom I invest (and others, unknowingly) my sovereignty. This jurisdiction is 'de jure'.

The corporate entity (with the same name as the land(s), or usually very similar anyway) exists for commerce and statutes only. This jurisdiction is 'de facto'.

Definitions:

de facto in law, it is meant to mean "in practice but not necessarily ordained by law" or "in practice or actuality, but without being officially established".

De jure is an expression that means "concerning law".

By becoming de facto stateless, in essence, it renders the contracts (statutes/bylaws) null and void 'ab inito' and everything in court has to be dealt with under Common Law. (Also called the 'law of the land'. I'm sure you've heard that term before in various sworn oaths. It is called this for good reason. It is literally the customs of the people who live "on land". lol!)

Commerce with fiat currency is regulated in the 'de facto' arena by the use of statutes. Take a dollar bill into Common Law (de jure) and it is just piece of paper. Quite literally. It has the value of paper. Whatever a sheet of paper goes for in gold/silver/"insert barter item here" is what it is worth. In my opinion you can't even write on it, so I'd rather have blank paper.

More food for thought: Who actually owns the paper? Is your signature on it? Is there a copyright on it? When they demand payment in dollars are you just returning their property? Should you even take these demands personally? Wink

Gold/silver coins that are "minted" (I could go on and on about what minting really is and means in law) actually work in both jurisdictions. They have a legal face value (de facto), and a lawful real intrinsic value (Common Law / de jure jurisdiction). More examples of dual jurisdictional things (if you want to research more on your own) are: bills of exchange (precursors to the modern "check" or draft), bills, demands, and notices.

Anyway, I could drone on and on and upload document after document to prove all of this but I do have job and limited time. Maybe I should start a school and charge tuition in Bitcoins. Tongue


What is your opinion on the seastead project? http://seasteading.org/ .I have also  been following Robert Minard and the Freeman movement with particular interest.

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July 11, 2010, 08:06:32 PM
 #8

Seasteading isn't a new idea. However, that website is new and particularly interesting to me. Thanks! Smiley I'll check it out in more detail. It reminds me of the Freedom Ship. Too bad it couldn't raise enough capital. :/

Robert Menard's work is only the very tip of the iceberg. His works are a great starting place, however he doesn't have all of the answers. To gain a complete and concise understanding one must spend a lot of time researching law, history, and religion. Funny how all three are so intertwined. Tongue
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July 12, 2010, 09:29:26 AM
 #9

Seasteading isn't a new idea. However, that website is new and particularly interesting to me. Thanks! Smiley I'll check it out in more detail. It reminds me of the Freedom Ship. Too bad it couldn't raise enough capital. :/

Robert Menard's work is only the very tip of the iceberg. His works are a great starting place, however he doesn't have all of the answers. To gain a complete and concise understanding one must spend a lot of time researching law, history, and religion. Funny how all three are so intertwined. Tongue


My one reservation  is the involvement of the Thiel foundation.Peter Thiel is behind Paypal.I wonder why paypal rolls over so easily to the feds if he actually believes what the foundation is about.I wonder what his opinion would be on bitcoin.
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October 05, 2010, 07:46:30 PM
 #10

If this article is accurate (not a given, since the author linked 9/11 to the creation of In-Q-Tel in 1999) then Peter Thiel might be very interested and supportive of Bitcoin on multiple levels.

http://www.guardian.co.uk/technology/2008/jan/14/facebook
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October 05, 2010, 07:56:38 PM
 #11

Seasteading isn't a new idea. However, that website is new and particularly interesting to me. Thanks! Smiley I'll check it out in more detail. It reminds me of the Freedom Ship. Too bad it couldn't raise enough capital. :/

Robert Menard's work is only the very tip of the iceberg. His works are a great starting place, however he doesn't have all of the answers. To gain a complete and concise understanding one must spend a lot of time researching law, history, and religion. Funny how all three are so intertwined. Tongue


My one reservation  is the involvement of the Thiel foundation.Peter Thiel is behind Paypal.I wonder why paypal rolls over so easily to the feds if he actually believes what the foundation is about.


Peter Thiel founded Paypal, but he no longer owns it.  He founded it in an attempt to establish an online currency, but largely failed.  The things that PayPal does today has no reflection on Peter Thiel today any more than what we do reflects upon Satoshi, which is to say, none at all.

Quote

I wonder what his opinion would be on bitcoin.

That's a good question.  I wonder if he knows.  Hell, I wonder if he's on this forum.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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October 05, 2010, 07:57:15 PM
 #12

My one reservation  is the involvement of the Thiel foundation.Peter Thiel is behind Paypal.I wonder why paypal rolls over so easily to the feds if he actually believes what the foundation is about.I wonder what his opinion would be on bitcoin.

What evidence shows that Peter Thiel was involved in those decisions?  PT has not been Paypal management for a while.

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October 06, 2010, 05:47:44 AM
 #13

Quote
By using Facebook, you are consenting to have your personal data transferred to and processed in the United States ... We may be required to disclose user information pursuant to lawful requests, such as subpoenas or court orders, or in compliance with applicable laws. We do not reveal information until we have a good faith belief that an information request by law enforcement or private litigants meets applicable legal standards. Additionally, we may share account or other information when we believe it is necessary to comply with law, to protect our interests or property, to prevent fraud or other illegal activity perpetrated through the Facebook service or using the Facebook name, or to prevent imminent bodily harm. This may include sharing information with other companies, lawyers, agents or government agencies."


*pukes.
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October 06, 2010, 06:44:07 AM
 #14

Quote
By using Facebook, you are consenting to have your personal data transferred to and processed in the United States ... We may be required to disclose user information pursuant to lawful requests, such as subpoenas or court orders, or in compliance with applicable laws. We do not reveal information until we have a good faith belief that an information request by law enforcement or private litigants meets applicable legal standards. Additionally, we may share account or other information when we believe it is necessary to comply with law, to protect our interests or property, to prevent fraud or other illegal activity perpetrated through the Facebook service or using the Facebook name, or to prevent imminent bodily harm. This may include sharing information with other companies, lawyers, agents or government agencies."


*pukes.

Meh... you don't want to know some new "European" rules that where forced upon Europe by the US government.
Doing bank transaction (within Europe)? => Your info goes to the states. Can be in bulk, the US will filter it out what they need. (This is already in action)
Want to travel to the states? => Hand over all your private data (including "what eat on board of the flight", your sexual life, credit card numbers and email addresses). And of course these data are to be shared with the US allies. Even our Dutch privacy law has already been changed to allow this.

Advertise with Bitcoins - https://www.operationfabulous.com/
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October 06, 2010, 07:47:23 AM
 #15

Quote
By using Facebook, you are consenting to have your personal data transferred to and processed in the United States ... We may be required to disclose user information pursuant to lawful requests, such as subpoenas or court orders, or in compliance with applicable laws. We do not reveal information until we have a good faith belief that an information request by law enforcement or private litigants meets applicable legal standards. Additionally, we may share account or other information when we believe it is necessary to comply with law, to protect our interests or property, to prevent fraud or other illegal activity perpetrated through the Facebook service or using the Facebook name, or to prevent imminent bodily harm. This may include sharing information with other companies, lawyers, agents or government agencies."


*pukes.

Meh... you don't want to know some new "European" rules that where forced upon Europe by the US government.
Doing bank transaction (within Europe)? => Your info goes to the states. Can be in bulk, the US will filter it out what they need. (This is already in action)
Want to travel to the states? => Hand over all your private data (including "what eat on board of the flight", your sexual life, credit card numbers and email addresses). And of course these data are to be shared with the US allies. Even our Dutch privacy law has already been changed to allow this.

Or fly to canada and sneak across the border.....
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October 06, 2010, 10:24:42 PM
 #16

I am not a lawyer.

But it looks to me like No, just running Bitcoin doesn't make you a "money transmitting business."  To be a "business" you have to be charging people for your service.

If you're running Bitcoin to buy or sell goods or services in exchange for bitcoins, I'd say you're not in the money transmitting business.

However, if I were to start a company in the business of buying and selling Bitcoins, or that was a Bitcoin payment processing intermediary that took a percentage of transactions between buyers and sellers, I'd talk to a lawyer and jump through all the legal hoops (looks like here in Massachusetts I'd need a license and would have to post a $50,000 bond).

Or to put it in more concrete terms:  I am not a money transmitting business when I use my credit card to pay for something from Amazon.com.
And Amazon.com is not a money transmitting business just because they accept payments.

However, Amazon Payments, Inc. (Amazon's Paypal competitor) is licensed as a money service business in a bunch of US states.


Bitcoin Market and MTGox might need to worry about this.

Tarot Card Readings for Bitcoins, available via e-mail, phone, skype or IM of your choice.  Inquire for price, quite reasonable.
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October 06, 2010, 10:31:56 PM
 #17

I am not a lawyer.

But it looks to me like No, just running Bitcoin doesn't make you a "money transmitting business."  To be a "business" you have to be charging people for your service.

If you're running Bitcoin to buy or sell goods or services in exchange for bitcoins, I'd say you're not in the money transmitting business.

However, if I were to start a company in the business of buying and selling Bitcoins, or that was a Bitcoin payment processing intermediary that took a percentage of transactions between buyers and sellers, I'd talk to a lawyer and jump through all the legal hoops (looks like here in Massachusetts I'd need a license and would have to post a $50,000 bond).

Or to put it in more concrete terms:  I am not a money transmitting business when I use my credit card to pay for something from Amazon.com.
And Amazon.com is not a money transmitting business just because they accept payments.

However, Amazon Payments, Inc. (Amazon's Paypal competitor) is licensed as a money service business in a bunch of US states.


Bitcoin Market and MTGox might need to worry about this.

Both BCM and MTGOX cost nothing to use.  MTGOX used to use a spread to make a small amount of money, but that went away, possibly to avoid being mistaken for a money services business.

Jeff Garzik, bitcoin core dev team and BitPay engineer; opinions are my own, not my employer.
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February 10, 2011, 08:22:41 PM
 #18

BitCoin would have to be actual money first.

Just because someone says something is money or a coin does not make it so. So there is no way it is illegal under at least that Title 18 code because bitcoin is not money and so you are not in a money transmitting business.





Is running bit coin legal in the US?  In particular:

http://www.law.cornell.edu/uscode/html/uscode18/usc_sec_18_00001960----000-.html

quote:

TITLE 18 > PART I > CHAPTER 95 > § 1960
Prev | Next
§ 1960. Prohibition of unlicensed money transmitting businesses

(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.
(b) As used in this section—
(1) the term “unlicensed money transmitting business” means a money transmitting business which affects interstate or foreign commerce in any manner or degree and—
(A) is operated without an appropriate money transmitting license in a State where such operation is punishable as a misdemeanor or a felony under State law, whether or not the defendant knew that the operation was required to be licensed or that the operation was so punishable;
(B) fails to comply with the money transmitting business registration requirements under section 5330 of title 31, United States Code, or regulations prescribed under such section; or
(C) otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity;
(2) the term “money transmitting” includes transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier; and
(3) the term “State” means any State of the United States, the District of Columbia, the Northern Mariana Islands, and any commonwealth, territory, or possession of the United States.

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February 10, 2011, 09:15:45 PM
 #19

http://www.law.cornell.edu/uscode/html/uscode18/usc_sec_18_00001960----000-.html
§ 1960. Prohibition of unlicensed money transmitting businesses
(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.

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February 10, 2011, 09:59:16 PM
 #20

http://www.law.cornell.edu/uscode/html/uscode18/usc_sec_18_00001960----000-.html
§ 1960. Prohibition of unlicensed money transmitting businesses
(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.

Land of the free, he he he.

Of course.

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Freedom is slavery.
Ignorance is strength.

Also: Libertarianism is terrorism.

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