Bitcoin Forum

A few days ago I wrote on bitcoin.se (http://www.bitcoin.se/2012/12/04/finansinspektionen-klassar-bitcoin-som-betalningsmedel/) (in Swedish) about a reply from the Financial Supervisory Authority where they consider Bitcoin to be a "means of payment" (I don't know what the correct English term for that is). Anyway, what this means is that if you want to run a business that buys/sells bitcoins you now have to register with the authority and get their approval.

My hope is that this will make things clearer regarding the VAT situation (https://bitcointalk.org/index.php?topic=66774.0). If the financial authorities consider it a means of payment it should be hard for the tax authorities to consider it an "electronic service" that is subject to VAT (as they have previously stated). I haven't yet gotten any new information from the tax authorities regarding this though.

Could you please explain (if the information is available to you of course) on what grounds this financial authority bases its decision ?
Particularly, is the decision rooted in european laws ? That would be interesting to know for other european countries. Thanks !

That's really interesting !
The can of worms is slowly opening :)

I speculate the more appropriate translation is "medium of exchange".

I too would like to see them cite their arbitrary rules (laws) which this classification is based upon or did they just pull it out of their asses?

Means of payment is legally defined in the EU, not means of exchange.

These people pull things out of their asses, it's what they do.

And sometimes they give those things a directive or law number :)

It wasn't me who got the reply from the Financial Authorities so I don't have all the details but I have received some additional information. First of all, they clarified that they don't consider Bitcoin a currency so you are not doing currency exchanging. Still, you need to be under the supervision of the authority (basically, they make sure that you follow AML rules) and you need to pay an annual fee for this. From what I understand that is because of this EU directive (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:319:0001:0036:EN:PDF) (which I haven't read).

Yes, that makes legal sense, that if you want to operate a bitcoin-fiat exchange service you have to comply with AML/KYC/PSP rules and so forth. That much isn't news, at least.

It actually makes a lot of sense. Any answers on the VAT situation for Bitcoin in France as it is becoming apparent that a major exchange will develop there?

As far as I understand, this swedish decision is similar to the french Mt Gox / Credit Mutuel case : it's about keeping deposits in euros belonging to your clients, and the need to be a registered PSP to do so.
I'm not sure it's about having to register in order to sell/buy bitcoints. It might be (sorry if I guess wrong) about having to register in order to keep euro deposits, and be a bitcoin exchange with euro funds, juste what Davout and bitcoin-central recently achieved.

Thanks for the clarification about bitcoin not considered (once again) currency. That's one more stone.

No, actually this was different. The question here was just about buying/selling bitcoins, not about keeping client funds (in fiat). That is the news to me and it is contrary to what they told me a year ago.

See my other post above. It is certainly not news that you need to comply with AML rules when running an exchange that keeps client funds but what is news (at least to me) is that you need to do it when your business is simply buying/selling bitcoins.

Ok thanks for the clarification, this is news indeed !
To sum it up :
- Bitcoin is not currency
- Bitcoin is a "mean of payment" or "medium of exchange", and you cannot buy/sell them as a business without being registered and licensed
- As a consequence, bitcoins are not virtual goods

The europeran directive you cite is about Payment Service Providers. I don't see how it could apply to every bitcoin-using business, but I'm far from being an expert.

I find the subject to be very interesting, but it doesn't êrfectly make sense to me for the moment.
Would you be kind enough to translate in english the whole reply from the Financial Supervisory Authority you were talking about in your first post ? That would really allow us to move forward.

That's a quite dubious claim

They actually made it very clear that you do not need a license. You do need to register your business with them but this is a much simpler process than getting a license.

Ok. The sentence "have to register with the authority and get their approval" made me think there was a license (the approval part).

Interesting news.