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Title: Do other exchanges have the same problem as Mt. Gox? Post by: darkmule on May 16, 2013, 02:27:28 PM I'd say so. Note: other exchanges, including the one I use, Coinbase, have exactly the problem that Gox has.
Quote Coinbase is not licensed as a money transmitter in any state, nor is it registered as a money services business with the U.S. Treasury’s Financial Crimes Enforcement Network. I applaud the company for dispensing with these formalities because, since it is only selling a cryptographic token and not a financial instrument, such registration and licensure is not legally required. From this February 19, 2013 article by Jon Matonis (http://themonetaryfuture.blogspot.com/2013/02/coinbase-swapping-bitcoin-privacy-for.html). Does anyone know which exchanges have actually licensed as money transmitters? It appears that this will be a necessary step for exchanges that do not want to end up with their assets seized or whose principals do not want to end up in federal pound-me-in-the-ass prison. Title: Re: Do other exchanges have the same problem as Mt. Gox? Post by: MSantori on May 16, 2013, 02:56:04 PM The short answer, from my gut, is yes.
Generally speaking, exchanges are money transmitters under FinCEN and many state rules. It isn't a "problem" unless the exchanges refuse to comply with those rules. All they need to do is properly register and adopt BSA, AML and SAR policies consistent with regulations. Honestly, it's a matter of laying out a few dollars for proper legal counsel, and adopting the proper compliance. It requires a modest outlay of money, but there is absolutely no reason why an exchange should fail to do this. Title: Re: Do other exchanges have the same problem as Mt. Gox? Post by: repentance on May 17, 2013, 03:17:58 AM Honestly, it's a matter of laying out a few dollars for proper legal counsel, and adopting the proper compliance. It requires a modest outlay of money, but there is absolutely no reason why an exchange should fail to do this. Based on previous discussions about this issue - including comments made by Mark himself when MtGox was looking into MSB registration last year - the FinCEN registration is relatively simple but the state level registration can be extremely expensive and difficult (and state level registration is required in the vast majority of states). Although the specifies failure to register with FinCEN, the code itself also makes it an offence to operate without appropriate state licences whether or not the defendant knew a licence was required. 18 USC section 1960 (b) (1) (a) While the funds in the Wells Fargo and Dwolla accounts can only be seized once, that doesn't mean MtGox can't be fined for violations other than the failure to register with FinCEN (on that violation alone they're potentially looking at a $5000 per day fine for the period during which they should have been registered because every day they fail to register after the first 180 days of operation counts as a new violation) I don't think anyone who's ever worked in financial services would regard compliance costs as "moderate" or the compliance process simple. Large institutions invest millions in compliance and they still get fined massive amounts for getting it wrong. |