Bitcoin Forum

Effective the May 31st, 2013 Tangible Cryptography has suspended new purchases of Bitcoins through our service FastCash4Bitcoins.  We take this step in response to a notice received, the same day from the Commonwealth of Virginia, that a complaint has been made that our company is operating as an unlicensed money transmitter.  

The Virginia Corporation Commission did an initial investigation in response to the complaint, and determined that our activity may constitute money transmission under Virginia law. The Commission's initial assessment has factual errors which we intend to address.  The notice indicated that it appears that our company is issuing Bitcoins through the use of the website https://fastcash4bitcoins.com , which may constitute "selling or issuing stored value" under Virginia law.  

As our clients are well aware this is simply an incorrect assessment of our business activity. The site is used to facilitate the purchase of Bitcoins from clients.  Tangible Cryptography is acting as a independent buyers not issuer of virtual currency.  Furthermore there is no obligation for redemption, or holding of customer funds, as would occur in a stored value system.  The view that buying, selling, or even issuing new Bitcoins, would be seen as stored value is at odds with the guidance from FinCEN earlier this year in which they stated that exchangers (and issuers) of virtual currency are not issuers of prepaid access (stored value) under Federal law.

The company has been given thirty days to provide written explanation on why our activity is exempt from licensing under current law. The commission has formally stated that unless exempt from licensing we must stop further activity until such time as we apply for and obtain a Money Transmitter license.  The prudent action is for the company to suspend all new transactions while we respond to the Commission's notice.

We want to reassure our valued clients that all completed transactions have been paid.  At this time there has been no freeze, hold, or closure of our payment accounts.  We are one of the few Bitcoin related enterprises which can definitively say that to date, no client has lost funds as a result of theft, hacking, or fraud through fault or negligence by Tangible Cryptography or the services it provides.  The future and direction of Tangible Cryptography will depend on the outcome of our response to the Virginia Corporation Commission.  While we hope for a timely resolution we recommend our existing clients make alternative arrangements as it is difficult to provide an estimate on how long such a resolution may take.

Staff
Tangible Cryptography, LLC

I'm more interested in the original source of the complaint.

You don't get into positions of power of life and death over proles by being ignorant, only acting as if you are, which is genius-level sociopathy. If you REALLY try it sometime, you may just become the President of the United States, and have the power to slaughter babies in the Rose Garden in front of the world's press, and not suffer any real punishment whatsoever.

Maybe this stupid jackass:  Viceroy

https://bitcointalk.org/index.php?topic=195642.msg2321256#msg2321256

Viceroy comes off as the kind of person that would do this.

TC - I wish you the best of luck.  Sadly certain people just want to stir up problems amongst freely-associating people because it doesn't make them happy, for whatever narcissistic reason.

Your service is the best in the business, as any reasonable person who has dealt with you would know.

Stick it to 'em.

Wouldn't matter if it was him or not. Sooner or later such a notice is going to be issued. Bitcoin may not 'technically' be money, but since it's being used for all the illict activities that money is used for - such technicalities are happily overlooked. Liberty Reserve was 'technically' based in Costa Rica - not an American dominion last time I looked - with only one of its directors based in the USA. Doesn't alter the fact that US is extraditing from across the globe and charging the lot of them with Money Laundering.

If the US takes a dislike to your activities; any warnings should be like finding a Howitzer shell that has failed to go off after landing in your foxhole. You only get that lucky once.

  

Given your misguided blind hatred of me it will surprise you to learn that I am greatly disappointed to read about what happened.  Dealing with regulators is NEVER any fun.   You clearly lack the mental acuity to see that this is part of a coordinated attack by the government which I am not a part of in any way except that I vote from time to time.  The government, in this case Virginia, wants their "cut".  Once TC is licensed in VA the problem will instantly go away.
 
I agree with Goat that the company will come out of this just fine from what I have read in the OP and the company will probably be stronger for it and better positioned to take over the market as Mt Gox inevitably gets cut off from America.   
 
I know you don't see this as helpful but I did suggest in these forums a week ago that TC would do well to cut off the "angry" states like California and New York.  I never considered their home state but it is reasonable to think that they might want to be licensed there as well.  TC's lawyers knew better though, at least that's what D&T said.  (Malpractice suit coming against counsel?) 
 
For what it's worth, TradeFortress, you would be well served to learn a lesson here as the site you run is CLEARLY against the intent of most state and federal securities laws.  It is illegal in about 98% of the USA for a person to act as a BANK without appropriate license.  I know in Pennsylvania alone you need to have $25 million cash to open a bank and you need to go through a process that is ten times as complex as what TC is about to go through if they register as a money transmitter.
 
But you just go on attacking me like "I" am the unlicensed money laundering bad guy.   ::)   
 
forum tip:  Your home state and the US Securities and Exchange Commission would be excited to know about TF and his illegal bank (bitcoin Certificate of Deposit Accounts) and if you tip them off you might even get a reward when they seize TradeFortress' assets. 

That's going to require a lonnnnnnng swim.

TC.

Fight the good fight. We need more legal precedents. Note to counsel: review the e-gold case.

Good luck.

Sucks man. Underscored for truth.

Sorry to hear, TangibleCryptography is a terrific Bitcoin company, and I hope you can resume operations ASAP.

Bad news  :'(

No.  Per Code of Virginia title 6.2, dollars sent through banks are exempt: That would include the checks sent out by Tangible Cryptography, which are drawn on Wells Fargo.



It's silly, but for a different reason.  If bitcoin is 'stored value' then the people who sold bitcoins to FC4B were all engaged in the business of money transmission, and the Virginia Corporation Commission should be investigating those thousands of people.  I'd love to see how they construe that as protecting residents of the Commonwealth.

+1

Good Luck TC, if you need help from the community, just ask.  :)

Yes don't hesitate to ask if you need on record letters of how your users made use of your systems.

How is FastCash4Bitcoins.com different from someone posting an ad on Craigslist offering to buy bitcoins? Because it's a company with a website? Is it the TLD that sets them apart? Seriously... if they are a MTB, we are likely all MTBs. Posting a buy order on an exchange is essentially the same thing - offering to buy bitcoins from somebody else.

This is a bad decision made by ignorant officials who are either too dumb or too proud to ask questions and learn about something they know nothing about before making decisions that affect it. If it's because they're worried about getting "their share"... they would have to send warnings to anyone who buys bitcoins from someone else. And if that's the case, they need to start sending warnings to everyone who buys anything from someone else because it is also exchanging fiat currency for something of value... which is all that was happening here. They were not creating or issuing bitcoins; they were just offering to buy something that already existed.

I will be dumbfounded if this decision is not reversed. If these bad decisions are allowed to stand it will set a precedent for future bad decisions regarding bitcoin.

/rant

+1.  Me too.

I see that Tangible Cryptography's MSB registration (#31000023734880), dated March 23, 2013, lists MSB Activities as "Money transmitter".  
 - http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

The types of activities to choose from include:

- http://www.fincen.gov/whatsnew/html/LaunchNewMSBRegistrationSite.html

If Tangible Cryptography were to have wanted to choose something other than Money transmitter, there's nothing else that really applies.   And money transmitter isn't really correct either.

Bitcoins simply is a round peg that doesn't fit in any of the regulator's square holes.
 

Speaking as a fellow Virginian and a customer, this is some bullshit. I hope they get their foot off your neck.

Terrible news. TC is definitely an asset to the BTC community. Hopefully everything will work out for the best.

Doesn't criterion 4, "Seller or redeemer of traveler's checks, money orders or stored value", pretty much fit the bill?

Well, the initial finding was wrong on its face.  The site doesn't sell or issue anything.  It buys Bitcoins for cash.  It's pretty clear that some other person or entity filed a complaint, either out of ignorance or malice, that contained a factually incorrect description of their business activities.  The state then took this complaint at face value, without investigation, despite asserting that it had conducted an "initial investigation".  Had someone during the "initial investigation" even visited the site, they would have discovered that they do not issue or sell anything.  This is akin to the state telling someone that they must stop buying things on eBay.

Why a combination of (4) and (5) would not be pretty close?

No.  Bitcoins have no "stored value".  There is no guarantee that a Bitcoin will be worth anything, ever, and there is no obligation on the part of any party to pay anything to a holder of a Bitcoin.  Like used collector stamps, they only have value because others will buy them (at least at the current time - it is clear that these actions are intended to chill the market by removing buyers from it).  

Our responses in this thread will be limited until the issue is resolved however FinCEN guidance in April 2013 clearly indicates no other category of MSB applies.  It is important to understand state law and federal law don't necessarily have the same definitions even for terms with the same "name".  Generally speaking the law will define a term and it has that meaning and only that meaning in the scope of that definition.  As we indicated in the response at the federal level however FinCEN has provided guidance that Bitcoins are not stored value and virtual currency does not fall under the definition of "currency dealer or exchanger".  FinCEN no longer uses the word "stored value" in regulations preferring instead the more inclusive "prepaid access" however some docs are still out of date so you may still see the older term. At the federal level the two terms can be considered synonymous.

http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

Ok. Fair argument.

I also reside in Virginia and this thread comes as no surprise to me, the Commonwealth will fuck someone over hard for all kinds of dumb shit.

Happy to donate as well, but I don't think it will go that far.

Most state money transmission laws are concerned primarily with protecting the public from people of low character running off with funds, as opposed to the Feds, who are interested in making sure no one moves a penny without "proper oversight." Once OP's attorney makes it clear that he is simply purchasing virtual goods, I bet he'll be right back to business.

The vile worm who made the complaint obviously struggles for a reason to exist. He should do the noble thing and reduce his oxygen consumption by 100%.

This is the Commonwealth of Virginia, otherwise known as DC South. They're in lockstep with Federal regulators. If TC manages to outlawyer them, they'll find another reason to put the freeze on. TC has my undying respect for being open as long as he has been without coming into their sights.

You're more optimistic than I am but in my experience, once the Commonwealth has you in range they don't let go.

OK, total newb here, but the U.S. IS the land of suit/countersuit. Couldn't Tangible Cryptography take steps to protect itself and any investors by seeking legal redress from the Commonwealth of Virginia for any loss or possible loss of income due to interference with its business on the basis of such a vague charge? Go on the offensive! Fight back! (grin)

It could be a somewhat difficult case because of how broadly worded the Virginia law is.

Simple answer is no.  The notice from the commonwealth only indicates we "may" be engaged unlicensed money transmission.  There is only a demand to cease "if" we are engaged in activity which requires licensure.  However it is prudent for us to stop at this time until we have clarity on the position of the government.  At this point it is our intent to avoid an adversarial situation which likely will be costly and time consuming and instead open a dialog with the commission as Bitcoin is an emergent technology and based on the letter we believe they have some significant misunderstandings on how this technology works.

He's a good businessman. ;)

They don't even care how this technology works. Not in the slightest. They just want to take their cut and/or mainly to impose their restrictions onto it to continue their sovereignty over money...  :-\

Dang I was just about to use this site just been on the fence and now I can't. :(

I'm sorry to hear about this nonsense it's truly laughable how destructive the feds are.  It is good your taking this step by step and playing it safe as the feds are really good at picking on the little guy.  I will be following this thread as I'm very curious what will come of all this.  Hopefully the law prevails and leads to a smooth transition and getting back to business as usual.

As they say on the Internets, sir, the joke is upon thyself.

wouldn't it just be easier to move to another state or jurisdiction?

While direction came from a state agency this is not a state issue.  Direction is clearly coming down from the federal level.  Almost all state will march in line.

It is something we are considering.  Understand though that would essentially be us conceding the issue to the state of VA and we would then need to enforce mechanisms to block VA residents from using our service.  It is utterly baffling that MSB/MT regulations at state levels haven't be challenged on interstate commerce grounds but we haven't found any case law to suggest they have.  Of course it likely is only time before some other states move to "protect" their residents as well. 

Easy enough to explain it: the slightly different, slightly quirky 50 state regulations act collectively as a barrier to entry in that market, requiring one to sink about a couple million dollars into nonsense papershuffling. The fiat world equivalent of MPEx's 30 BTC regfee, if you will; you don't have that capital to throw away, you're not old enough to play.

The parties with enough bankroll to challenge successfully are better served by taking advantage of the barrier than bringing it down. The parties without enough bankroll are welcome to go suck on a lemon.

(And before anyone gets all agitated about current politics: this is how the US has worked ever since original incorporation, a coupla hundred years ago.)

This is awful.  Good luck you guys.  

I've reviewed Virginia law for one of my bitcoin clients and it is very difficult to apply to a bitcoin transaction, or what I understand to be your business in general.  Title 6.2, Chapter 19's definition of "money" is very broad, but they do not define "transmission" at all.  Typically, transmission requires at least two customers in a transaction.  You seem to only have one customer per transaction, so maybe they don't understand what it is you do.

Yeah, it raised my eyebrow that the most favorable interpretation would be that buy, hold, sellers should be free and clear because they're not acting as a middleman like PP or WU between 2 other people, but with that kind of justice system, no innocents would ever be targeted...

Tangible Cryptography,

Sent you an email + a PM regarding an order I placed on June 1st.

Any news guys ?? Hope your back online soon  ;)

Best of Luck!!!!!!!!!!

I am also interested to hear the latest, if only out of professional curiosity.

website down.... maybe they losing it like btcpak....sigh...

The site being down is unrelated to this announcement, just bad timing.  Our colocation provider is physically moving to a new larger datacenter something which has been planned for over a month now.  Our server was inaccessible after the migration and it now appears they have "lost" our server.  No customer information is at risk.  We employ whole drive encryption and have encrypted offsite backups as well.  There is no super admin or backdoor access to reset the admin password like has occurred at low cost VPS providers.  We own the bare metal that our services are running on. 

We do not have a formal response from the commission at this time.  It is unlikely any updates will be provided until we have a formal response either indicating that our activity does not require a license or that we must obtain a license. 

I think it's unlikely that you will get a response at all, unless its a knock on the door by a swat team.

Question:

Given the fact that your "core business" has theoretically ceased operation...


Have you given any consideration to resuming offering escrow services temporarily until you get a formal response from the commission?

Escrow (unless you are an attorney) is money transmission also.

Man, the US must hate those people who have solar panels up paying for their electric. I wonder if they would try to sue the sun or proton particles? Has to be some money in there somewhere.

Because there is an 80 year old guy asking his assistant, "hey dear, what are bitcoins?". You may never receive an answer.

TC, why don't you lawyer up yourselves to keep in business while the politicians figure things out? I remember when Donald Trump filed for bankruptcy many years ago he was still buying planes, homes, and expensive items. It basically boils down to how good your attorney's are. If your attorney's can't keep you in business while waiting for a decision which could take years you need new counsel.

Only if you are holding the U.S. cash as escrow.

Regardless of the decision, Tangible Cryptography, LLC won't be offering escrow in the future.  Too high risk, too low profit (competing with 0% fee operators), and too manpower intensive.  If you need a trusted escrow agent I would recommend John K.  He is the only one I trust enough to use personally.

Understood.

I'm one of those 0% fee (gratuity appreciated) operators.  Unfortunately, when I need escrow, John K. is the only current provider that I trust enough to use personally in most cases.  I'm typically happy to pay his 1.5% fee, but he isn't always available on short notice, especially during the timeframe that local banks are open (due to his geographical location).

Anyhow, if you change you mind, I'd be happy to pay between 1% and 2% for escrow services from someone as trusted as yourself.

+1

I doubt TC has the pocketbook to fight the state. Fighting corporations or debt is one thing. Fighting the people who can make the rules and change them on a whim is something else entirely.

That is why we need collective action to begin bitcoin advocacy or to form a self regulating with Bitcoin and Financial industry professionals to interface with regulators and legislators to educate them about the benefits of the protocol.  I think there was hope that this was what the bitcoin foundation would be working on.  But there seems to be many varying opinions about the foundation and its efforts here on this forum.

Our company has decided to move forward proactively in this area in our own business interest and in the interest of all bitcoiner and bitcoin businesses.  If you are interested in joining us please PM me to get involved.

Thanks.

Negotiating with gangsters has a long history of counterproductive results.

It's more productive in the long run to bypass and out-innovate (https://bitcointalk.org/index.php?topic=237164.0) the regulators instead of getting stuck in the tarpit of working with them.

 justusranvier

Unfortunately this is the regulatory landscape in which we find ourselves today.

And the business in the link you provided is, in my opinion, and according to my research and the attorneys, Money Transmitter Professionals and Anti-Money Laundering Compliance professionals I've spoken with is operating illegally and runs the risk not only of being shut down but also of criminal prosecution.

But then we are all free to make choices.

PS

You should read the story of E-Gold.  It is easy to make baseless claims and anonymously thump your chest at the government on an internet form and ignore regulation and your responsibilities as a money service business.  You should ask Douglas Jackson how that worked out for him.

http://www.wired.com/threatlevel/2009/06/e-gold/ (http://www.wired.com/threatlevel/2009/06/e-gold/)

That's how we know they are doing something worthwhile.

I know nothing of that business other than what I've read in the referenced thread, but it appears to me that they are providing a listing and escrow service only and not handling or transferring any U.S. dollars. I've also researched this issue quite heavily and I don't see how that activity fits into any of the definitions of "money transmitter" enumerated in the FinCen guidance.

Would you mind sharing which part of the guidance / regulations you believe apply to this service?

Sure.  But  maybe we should start another thread.  I think we've hijacked TC's enough.

Ok but link it here please.

It took forever to dig up this post, and I was starting to wonder if I was misremembering having written it:

I don't mean to be a dick but good luck with that justusranvier.

Equally good luck running any bitcoin services in the lightnet. We can all see how little luck and sliding down slippery slopes to oblivion that system has, on a monthly, if not weekly basis.

There are plenty of successful businesses operating on the open side of the web.

That many users continue to tolerate failures like Mt.Gox is just a sign of how immature the market still is.  There will be many successful ventures that fully conform to regulation.  And any business restricting itself to operation on the darknet is limiting itself to an extremely small segment of the user base.

That could also have been argued about Apple's iTunes store and look how that turned out.

I simply cannot see how it's possible to conform to 100% of regulations and laws in good faith (that means NEVER paying legal or illegal bribes). http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229

If "successful" is defined as "merely hasn't been targeted by arbitrary, capricious, or malicious actors YET", then sure, there are "plenty of successful businesses". Such luck, or whatever you want to call it, is not equal to immunity.

Or nightmare, if you beg, borrow, and steal to get a lawyer, and evil still wins, as it almost always does.

Of course just use first international darknet bank (with global ACH and wire service).  Why didn't I think of that?

Do they have a black credit card like American Express does?

Obviously ACH and wire is lightnet exclusive, which is why you cannot use it at all without an iota of fear of being fucked, no matter how much you spend on "compliance" other than bribery.

A company with a single business account is easily fucked with.

A swarm of part time hobby traders sending occasional wires and ACH is much less susceptible.

Less susceptible != without an iota of fear.

Love it.

Can't seem to find that directory of lawyers who instantly bend all tyrants to the will of 100% of their innocent/pro-liberty clients, with force of will (no bribery or blackmail) alone.

Sick of the implication that one, or many lawyers collectively, are superhuman/godlike, can defeat tyranny in all circumstances. If that were true, tyranny wouldn't exist.

Hope you greedy fuckers get arrested

That's a very valuable contribution, let me donate some Bitcoin to you.

Heh.

Would it be possible to open your business back by denying US transactions temporarily?

Paypal and Dwolla. 

No new news??  :'(

I wish you guy's the best of luck,really missing your service  :(

i've read their TOS today and found nothing about country restrictions.



Wouldn't it be legal to buy bitcoins using Paypal and Dwolla given that they already have govt. licenses?

I forgot that the state labeled their business as a "seller or issuer stored value" which is dead wrong .

We are in contact with the state regulators but have not received an official response at this time.  I hope our clients understand that while you may not hear much from us, that is intentional on advice of counsel.  We haven't been idle though but most of the work we are doing is behind the scenes, researching and preparing a contingency plan in the event that we are unable to operate in Virginia.  Tentatively we are looking at resuming services within the next two weeks for some clients in some states.  Understand that timeline isn't in stone and is contingent on completing bank/service setup, as any future services will be provided by a wholly owned subsidiary not TC, LLC.  The bad news is that instead of treating all US residents as a single class we will be limiting services based on the state of residency.  At a minimum services will not be available to residents of VA (unless resolution is reached), CA and NY.  The list of restricted states may (and likely will) be expanded based on responses we receive from regulators. On a positive note our communications with Canadian regulators has been very positive, and we will be adding support for Canadian residents with low cost Canadian specific payment methods as quickly as possible.  There are some difficulties in opening the required Canadian bank accounts, namely a very long flight from VA to BC and I want to make sure we have a solid understanding with the Canadian bank before jumping on a plane (really not looking forward to it and don't want to do it more than necessary).

I hear a giant sucking sound from the US towards the north.

Thanks for the update guys!!!  ;)

Hope Fla is on the,"UNrestricted" list  :D

A word now & then is all we need  8)

Too bad you can't open your own bank......Bitcoin of America  ???  :D

any new updates? looking forward to keep working with you guys

Some delays in getting bank account setup for our subsidiaries.  We will provide an announcement when we are ready to launch or new service.

awesome, can't wait!

Exciting! Good luck!

Patiently waiting for you guys to come back and CRUSH it again. :)

Update 08/01/2013

It has been more than thirty days since we provided a response to the Commonwealth of Virginia with corrections to errors made by the commission and the legal analysis on why our activity falls outside the scope scope of "transmission" set by Virginia statute. As of today, we have not received an official response confirming or refuting our conclusions.  The lack of a response make it impossible to resume operations within the state in a prudent manner.  Doing so would put the company's assets and shareholder's equity at risk to potential fines and civil action.  

The company has considered forcing the issue by suing the commission.  This response is unattractive as it would mean halting business for months if not years and expending a significant amount of capital to reach a resolution.  Even if successful it be a hollow victory, if unsuccessful it would mean the same loss of time and capital but with the need for licensure confirmed by the court.  Another response at this time would be to obtain a Virginia Money Transmitter license.  This is complicated by the fact that the state's position as laid out in the notice is flawed and contains material inaccuracies.  Seeking a license without a clarification from the state would be a de facto acceptance of that flawed notice.   This would hamper the company's future operation and open it up to legal liabilities with other states.  The pending license would be used as acceptance of the need for licensure.  Another consequence of seeking a license on flawed ground is that it would create a precedent which would surely be used against other Bitcoin related companies creating a chilling effect on the growth of Bitcoin in general.  This means without a clearer notice from the State and correction of the errors we can not in good faith seek a license at this time.

The lack of clarification from regulators in Virginia, has forced management to relocate the company outside the jurisdiction of those regulators.  We recognized this as a possible outcome when preparing a response to the notice two months ago.  A contingency plan was put in motion to prepare for a reorganization of the enterprise, so that the entities engaged in buying Bitcoins are located outside of the state of Virginia.  We have done this by forming two new wholly owned subsidiaries of Tangible Cryptography, LLC.  Those subsidiaries are North American Cryptographics, LLC, a South Carolina Limited Liability Company, and North American Cryptographics, Inc, a British Columbia Corporation.  Tangible Cryptography as the sole owner of these entities has transferred assets to these subsidiaries in exchange for equity.  Going forward it is these subsidiaries which will interact with clients looking to sell Bitcoins.  As it it is no longer engaged in regulated activity, Tangible Cryptography has filed to terminate its MSB registration.   The operating agreement of Tangible Cryptography, LLC has been updated to limit the scope of operating to exclude activity which could result in the company being classified as a money service business and this change approved by shareholders.  

We have also taken the extraordinary step of relocating all servers, workstations, and backups to datacenters in British Columbia, Canada.  Employees of NAC, LLC (and NAC, Inc) will work remotely by connecting to their company workstations located in British Columbia.  Any computing resources used by employes locally will be solely as dumb terminal for remote connectivity to company assets located remotely.  All company software, databases, and other intellectual property for both production and development, will remain exclusively in British Columbia.  Likewise all bank accounts, official offices, phone lines, and mailing addresses for the subsidiaries are in South Carolina and British Columbia.  This is done as a precaution to prevent Virginia or any other jurisdiction from claiming that the company operates locally and thus creates a nexus under local law.  While this sort of structure requires employees to have continual connectivity with their remotely located company workstations, the near ubiquitous availability of 4G wireless and other forms of broadband connectivity make this less of an issue.  The use of Virtual Private Networks and workstation virtualization allow this remote access to be accomplished in a secure, private, and cost effective manner.

This advantage of having employees work remotely from home allows the operating subsidiaries to hire employees in most locales without creating an additional nexus and that another regulatory hurdle.  This is due to the arrangement between employee and employer as being one of a remote telecommuting employee working for a foreign employer located outside of the jurisdiction.  We have been advised by counsel that offering employment to potential employees in most locations will not present an issue.  There are some states where this will not be possible due to uncertainty on the treatment of telecommuting workers (another new legal frontier), or the cost of employer compliance but it but in general this should greatly expand our ability to recruit and retain talent.  It is our intention to hire additional operational staff and software developers shortly after launching.

This structure has ramifications beyond our enterprise.  The continual advancement of technology is allowing the rise of "virtual companies" who can route around the damaged parts of the financial and political systems of the world.  This can be accomplished by using decentralized labor and assets, along with choice of jurisdiction to define the presence of the operating entity rather than have the physical location of the entity define the jurisdiction.   While this has been possible to a certain extent for some time, technology is allowing this to happen on a level not seen before.  We have chosen to still incorporate and thus accept the authority of the state rather than try an operate as virtual entity without incorporation in any jurisdiction.  Operating without incorporation is the route taken by some enterprises and it may be viable for ones which can operate without the need of any physical presence. For some types of economic activity, including ours, this is simply not possible.  The opening of a bank and other financial accounts requires an identity of some sort and that either requires a natural person or an artificial legal person.   Using a natural person breaks the limited liability and organizational advantages of artificial entities like corporations and limited liability companies.  It is not possible to create a corporation or limited liability company without the approval of some state as these constructs exist solely as the product of the law of the jurisdiction they are created (incorporated) in.  Barring either a recognized legal construct or natural person in most jurisdictions to open financial and other types of accounts.  So while the use of incorporation does tether a virtual entity to one or more jurisdictions, the use of technology allows decentralization of presence, assets, and labor at a level not available until recently.

It has been a complex and extensive reorganization made necessary by overzealous regulators, that we neither wanted nor sought.  The end result however is companies which will emerge, better positioned to provide unmatched service to our valued clients.  I would take the time to again point out that no client or creditor of our company has ever lost funds in dealing with our company, a claim which can not be made by very many Bitcoin related enterprises.  Even in times of high volatility we have no canceled transactions due to "high risk" or other stated reasons, we have always honored a contracted price even if it means a short term loss for the company.  During this regulatory issue, we have honored all amounts owed to clients and creditors.  Moving forward we feel this reorganization will allow us to remain the gold standard for transparency, security, and customer support.  

Due to the regulatory environment in certain locales, the new operating entities will require clients to verify the address of their residence before selling Bitcoins.  This will ensure we can block clients in locales where regulators have declaration that such activity requires a license, or such activity violates local law. Initially clients who are residents of the states of Virginia, California, and New York, as well as residents of other states or countries which prohibit or license Bitcoin sales, will be blocked from selling Bitcoins.  Our decision to block clients in certain jurisdictions was not taken lightly and should not be seen as agreement with the claims of the applicable local regulators.  It is merely a prudent step to isolate these "high risk" jurisdictions, so we can continue to serve the most clients possible with the least amount of burdensome governmental interference. The list of blocked locales will be updated as necessary based on communication with regulators and legal counsel.   We will have multiple methods available for prospective clients to verify their residence, including methods which provide instantaneous verification. In addition, prior clients of Tangible Cryptography who received physical delivery (mailed check or bullion) will have an option to have the option to have their account information transferred the new operating subsidiary and become pre verified.  It is possible that at some point in the future, one or more of these subsidiaries will look to obtain licensing in order to resume operations in blocked locales however residents of blocked locales should consider that even if successful such licensing will take months if not years and we we will be unable to provide service to them for the intermediate future.

At this time we do not have a date for the launch of new services as there are some lingering bureaucratic details to finalize.  The companies have the necessary financial resources to operate for an extended period of time even without any cashflow and we are committed to resuming operations in the future.  The "silence" from the company is simply due to a lack of official or meaningful news.  Simply put we aren't "going away".  I want to express to our valued clients that we do read all received email but due to the volume of email we receive we are not been able to respond to all inquiries.  I would ask our prior and future prospective clients to trust us.  Everyone in the company, employees and investors alike are just as frustrated as you, about the painfully slow progress, which has been mostly out of our hands.  Remember we are dealing with issues which move at the speed of government.   This doesn't mean our developers have been idle.  We have been hard at work behind the scenes building a next generation sales portal which improves upon fastcash4bitcoin is every respect, and it should be worth the wait.  

A launch date will be provided when we are comfortable with the timeline for going live. We are from a development standpoint, ready for launch however we are blocked by some bureaucratic issues.  It is ironic given the virtual nature of our business the current delays literally involves a missing piece of paper,  an EIN letter, which prevents finalizing the setup of bank accounts for our domestic subsidiary.  No I couldn't make this stuff up if I tried.  All of us at Tangible Cryptography are excited to complete this reorganization, and look forward to getting back to serving the bitcoin community again.  While the corporate structure may be changing you can continue to expect the same great service from the same dedicated professionals which made us "the choice" for no-nonsense Bitcoin sales.

Thank You,

Gerald Davis
Director & Chairman
Tangible Cryptography, LLC

Yes.  We will actively block transactions (purchases or sales of Bitcoins) with residents of restricted locations.

Frictionless is likely impossible, regulators have shut that door.  However it has been our goal to make it as "low friction" as possible as we have worked hard to make it as easy as possible.  We will allow multiple methods to verify their address.  These include linking a verified PayPal account, linking a verified Dwolla account,  providing credit card details to perform AVS (won't be charged), and for those who wish to use any online digital method we will offer a mailed verification postcard at no cost.  While we would prefer to service all clients and avoid verification we have worked hard to ensure that users will find an option they are comfortable with.  

Yes international clients (other than in restricted locations) will be able to sell Bitcoins.  The payment options available will depend on the country of residence.  In addition we will also be unable to trade with residents of countries that the US has imposed trade sanctions. We are working with counsel to finalize our requirements but likely if your country is on one of these lists you may be blocked: http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx  We are also obligated to perform OFAC & SDN checks so individuals and companies which are on those lists will be blocked.  Generally speaking this should not be an issue for the overwhelming majority of users but I include it in full disclosure.

Self moderation note:
I shouldn't have included the reference to Thailand in my update so the reference has been removed.  We aren't launching today, and we will review with counsel our blocked list prior to launch.  The list will also be updated as conditions change.   I deleted a lot of posts, nobody is at fault, I opened that door with a hasty reference (not including in the original draft). At this point I am closing that foolishly opened door in an attempt to keep this thread on topic.  The merits (or lack thereof) of the reported legality of Bitcoins in Thailand are considered off topic and should be discussed in other threads.

Thank You

Excellent news, and super thanks for sharing this useful and inspiring information.
You guys are indeed our gold standard.

Keep up the good work!

Al Jazeera reports that Assad bans use of foreign currency in commercial transactions in Syria. (http://blogs.aljazeera.com/topic/syria/assad-bans-use-foreign-currency-commercial-transactions)

It is a very opportunistic and cheap solution to ask a person or organization to prove that he is not guilty otherwise should pay or go to jail. (and exactly from a government which has the biggest financial resources over the world)
Such bad examples are easy to imitate by others and will not improve justice over the world .

Syria has been in a bloody civil war for the last 2.5 years, and it doesn't look like it's going to end anytime soon.
Economy shouldn't be very high on their priorities...

Well I can't wait to see you guys back. Top notch service.

Great news, looking forward to using your service again. That's if EU-countries don't end up on the banlist.

Glad to hear it.  At this time the only restricted locations are some states "in the land of the free".

Soooo,any news  ???  ;)

+ more than I can count.  How goes it? :D

No news to announce yet.  It has taken far longer with more setbacks that I would have liked.   It is still our plan to operate in the future.

Probably because he just kept posting in public and Virginia kept reading his ridiculous posts like the one where he suggested he would just open a new entity and keep trading.

Moron.

Just like D&T you are, indeed, a moron Goat.  You don't put a period after a signature. 

Hey isn't bitcoin illegal in your homeland? (Yes).

You are Chinese, no?

Indeed it has been much longer and slower.  I can't comment much right but we will be launching soon.  Due to the holiday season it probably won't be until the first of the year but we may soft launch sooner.   As a long time supporter, if you would like more information just drop me an email.  I am going to lock this thread as the launch will be very public no chance of missing it.