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Title: An exchange dealing solely in crypto - financial regulation immune? Post by: monsterer on May 28, 2013, 07:34:31 PM Hi guys,
Would an exchange which deals solely in crypto-currencies be exempt from financial regulation / licencing issues as things stand right now? Are they any in existence right now and do they get much business? Cheers, Paul. Title: Re: An exchange dealing solely in crypto - financial regulation immune? Post by: DeathAndTaxes on May 28, 2013, 07:38:06 PM FinCEN (over reaching?) says you are still an MSB if you offer your service to US residents.
Quote An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency. Note this is a guidance letter not law. It is FinCEN statement of what they believe existing law gives them the authority to regulate. http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html Title: Re: An exchange dealing solely in crypto - financial regulation immune? Post by: monsterer on May 28, 2013, 07:45:34 PM FinCEN (over reaching?) says you are still an MSB if you offer your service to US residents. Quote An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency. Note this is a guidance letter not law. It is FinCEN statement of what they believe existing law gives them the authority to regulate. http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html Isn't there some confusion over whether bitcoin is defined as virtual-currency in the US, though? Title: Re: An exchange dealing solely in crypto - financial regulation immune? Post by: swappermall on May 28, 2013, 08:29:57 PM Are they any in existence right now and do they get much business? Cheers, Paul. One of the exchanges I use is cryptsy.com, which apparently does not deal in fiat currency. I would say they get a decent amount of business. My understanding is that FinCEN is looking to regulate MSBs (money service businesses) that act as exchanges involving USD, which could be used to mask illegal money laundering. It's hard to see how converting, say, MNC for NMC, means a whole lot of money laundering is going on. Title: Re: An exchange dealing solely in crypto - financial regulation immune? Post by: monsterer on May 28, 2013, 09:28:10 PM One of the exchanges I use is cryptsy.com, which apparently does not deal in fiat currency. I would say they get a decent amount of business. Actually, cryptsy.com is already registered as an MSB - from their TOS: "BSA / FinCEN Cryptsy is registered with the BSA as an MSB (Money Services Business). Cryptsy may be required to file details of account activity to this organization from time to time." Looks like a quite a busy site, though :) Title: Re: An exchange dealing solely in crypto - financial regulation immune? Post by: franky1 on May 28, 2013, 10:13:36 PM guys stop mis-reading the fincens, summarised guidance page and read the actual full reports..
fincen can only control FIAT. EG the money owned by government that has the symbols of that country £$ etc. this also includes the digital forms that are not on paper or coin but have a same value bases and symbology. fincen does NOT control world of warcraft gold, bitcoin, facebook credits, magic charms, or whatever else type of currency is floating around the internet. Quote An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN’s regulations, unless a limitation to or exemption from the definition applies to the person. Quote FinCEN’s regulations define currency (also referred to as “real” currency) as “the coin and paper money of the United States or of any other country that is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance.” 3 In contrast to real currency, “virtual” currency is a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency. In particular, virtual currency does not have legal tender status in any jurisdiction. This guidance addresses “convertible” virtual currency. This type of virtual currency either has an equivalent value in real currency, or acts as a substitute for real currency. in otherwords a digital value of a dollar, yen, pound. is convertable to a physicial banknote or physical legal tender coin. but you cannot class a mtgox /okpay digital dollar as legal tender to pay for court fee's or government taxes. it has to be converted back into banknotes and real coins to pay taxes. the keyword is convertible which is as described... this will affect for instance places that do penny per clicks advertising that move around pennys and dollars........... not bitcoins, so youtube better start changing their penny per viewing system so that instead of showing $$ totals.. they show X rabbit points or y .. um... smileycoins ;D its not to do with just reducing illegal activity its to do with partnerships with banks being told that they need to account for every digital dollar to ensure didgy website A does not tell the bank that person Z needs to be credited 1 trillion dollars. where infact no dollars ever passed website A's hand. this is why amazon is getting rid of the dollar and instead trying out amazon coins, to reduce the need of so many licences. this may also be a big warning to some mining pools. i believe eclipse does it, where you can withdraw your bitcoin shares directly to a dwolla account as dollars. because as we all know dollars are bad for your health.. stick to bitcoin withdrawals unless licenced, and giftcoins.me better be careful to. because they offer resellers the ability to put dollars onto giftcard balance which are later (after transmission) converted to bitcoins when you redeam it. |