Bitcoin Forum

I want to respond to the topic https://bitcointalk.org/index.php?topic=96077.20, (from member Herodes) but since I am a newbie, I can not comment this. So I will do it here, even though I feel it will be very little effective when posting it here...

I am setting up a business plan for a "cryptocurrency transaction service". In order to make sure the new business model fulfills all legal requirements I called the the Financial Supervisory Authority of Norway. They mentioned that they are continuously reviewing e-currencies like Bitcoin, just to mention one. The main question is if this type of business is regulated by (finance)law. But the thing is that they can't answer this question. Normally they have rules for payment companies, e-currency companies and so one. But the fact that the business model is based on just being a middleman, not financing anything, just passing on "monopoly money", they kind of "need to investigate" this. Their best suggestion was to write a letter with a detailed explanation of the concept. But I was asked to be patient, as reply could take up to several months (back log...). Or consult a lawyer.

Anyone that has some advice in this matter?

Thanks in advance :o)

Only LEGAL TENDER is recognized in the law. That's part of why fiat money has value.

You only have to comply with laws if you changing money into legal tender.

If you just trade Bitcoin -> PayPal -> Poker Chips etc. the regulations should be minimal.

But as soon as you add £ $ € symbols or equivalent prices that trade will be recognized by the laws and taxes of said currency.

Please comment only if you have something interesting to say, and do add which legal framework you are referring to.
It is false to say that only legal tender is "recognized" by law. E-currency is not legal tender, yet it is considered money by European regulation.

The distinction between e-currency, virtual currency, stored value, etc. is definitely non-trivial and doesn't care for mere opinions, in Europe they all have specific regulatory requirements and definitions.

For example, Paypal is e-currency in Europe, because it is a claim on its issuer expressed in fiat. So no, just dealing with Paypal does not shield you from the regulatory burden.