Bitcoin Forum

http://online.wsj.com/article/SB10001424127887323873904578574000957464468.html

Bitcoin Exchange Makes Apparent Move to Play by U.S. Money-Laundering Rules
Company Listed as Mt. Gox Registers With Treasury Department
By JEFFREY SPARSHOTT
WASHINGTON—The world's largest bitcoin trading exchange appears to have taken a key step to comply with U.S. anti-money-laundering rules and potentially avoid additional run-ins with authorities.

A company listed as Mt. Gox this week registered as a money services business with the Treasury Department's Financial Crimes Enforcement Network, according to FinCen's website. Tokyo-based Mt. Gox, which says it handles about 80% of all trading in the virtual currency, couldn't immediately be reached for comment.

FinCen in March started applying traditional money-laundering rules to "virtual currencies" amid growing concern that new forms of digital cash are being used for illicit activities. Those rules mandate that exchanges register with FinCen, follow stricter bookkeeping requirements and report transactions of more than $10,000.

About a month after the edict, the Department of Homeland Security seized an account tied to Mt. Gox, alleging the company and a subsidiary were conducting transactions "as part of an unlicensed money service business."

According to FinCen's website, the agency received Mt. Gox's registration on Thursday. The online form listed a street in Dover, Del., as the company's address.

A spokesman for FinCen had no comment on the development. Earlier this month, FinCen's director, Jennifer Shasky Calvery, said that "those offering virtual currencies must comply with…regulatory requirements, and if they do so, they have nothing to fear from Treasury."

Mt. Gox's move may bring the company in line with Treasury's rules, but could also open the exchange to increased regulatory attention.
"It gives them the color of legitimacy," said Mercedes Kelley Tunstall, a partner with the law firm Ballard Spahr LLP, who works on banking compliance issues. "It suggests that they get it, that they need to be careful in these areas. It also means that now they have put themselves on the radar screen and they need to have policies and procedures to watch out for fraudulent activity and illegal activity."

Mt. Gox already had taken measures to beef up its identification procedures for users who deposit or withdraw traditional currencies, a central tenet of anti-money-laundering procedures. In May the company said all user accounts must be verified in order to perform any fiat currency deposits or withdrawals. Verification includes submission of a valid photo ID and proof of residence such as a utility bill or tax return, according to the website.

At the time, Mt. Gox said it had more than doubled its verification support staff.

More recently, Mt. Gox halted U.S. dollar withdrawals. The company said it needed to make systems improvements amid increased trading volume.

The recent regulatory attention paid to bitcoin-related companies has likely caused some banks to become leery of doing business with such companies, attorneys have said.

But becoming registered with FinCen or state agencies that have requirements for money transmitters may not make financial institutions more comfortable working with such firms, Ms. Tunstall said.

"I think that the virtual currency industry still needs to mature before banks will feel comfortable with them," she said.
The rising popularity of virtual currencies, while no more than a drop in the bucket of global liquidity, is being fueled by Internet merchants, as well as user concerns about privacy and jitters about traditional currencies in Europe.

—Andrew R. Johnson contributed to this article.

Heck, today's price slump is probably just a coordinated attack by big holders so that they could get more cheaper coins. That's the tactics they got so many BTCs the first place.

The price drops are a result of regulation. Bitcoin's price was parabolic before regulators and those Bitcoiners that pay attention to them sunk their teeth into Bitcoin.

That's just being ignorant. MtGox registered as a MSB with FinCEN. It's all about anti money laundering that the US government wants.

80% of Bitcoin trade just got regulated.  I love this for more reasons than one.  Here's a  ;) to the libertarians.  Pwned!

Someone can just set up a secret dark exchange on tor if being anonymous is so important.

Here we go again, do you understand that FinCEN does not and cannot regulate security trading? It's not their job and they don't care. MtGox registers as a money transmitter, not a market money with SEC and CFTC.

This is clearly a step forward, well unless you are one of the bad guys who lives off by laundering black money, that is. If that's the case, Bitcoin is not for you. Go launder your money somewhere else, and keep BTC clean.

Ignorance is thinking that lining up with what "the US government wants" is good for Bitcoin.

Thus far, it's proven bad for Bitcoin.

It's not about lining up with governments. It's about legal framework of how this world works. Do you seriously think you can just open an online fiat exchange and get away without being regulated? You must be dreaming. If you're going to go mainstream, you're going to be regulated. That's the end of it.

I get what you meant though. You probably hate fiats and your dream is probably about a world where Bitcoin is truly independent from fiats, that you could use it to pay for everything from foods to rent and entertainment. That's a long way from here. As long as you deal with fiats, you have to be regulated under fiats rules.

Well, that's the problem...  However anonymous you want to be, there will always be a point along the chain where you want to trade to or from fiat.  And unless you meet from person to person to trade some fiat for BTC, or want to trade some higher amount, then there will always be the government keeping an eye on the fiat.

The only way to stay truly anonymous is to not involve fiat at all...  And, BTC without a fiat price tag attached to it is worthless (in fiat term...).

It's not about lining up with governments. It's about legal framework of how this world works.

Warning!  Rational thinking is met with severe hatred around these parts. 

OK. So every transaction is recorded and regulated. Bad news for a lot of big traders  :'(

how do I get the full text? is it possible without subscribing?

3rd post

oh lol, that's it...

OK so what does this mean?

They haven't been approved, they've only applied?

hrmm so this really shouldn't have any effect on the price... But it will perhaps get more people moving back to Gox again?

So bitcoin was supposed to be anomyus but now USA have acces to all transations on mtgox thats isnt good.

I'm just wondering how the WSJ got wind of this before anyone else.

The greatest disadvantage is that the treasured anonimity may be gone forever

Wait.  
An internet form was filled out possibly by MtGox with following address:

Street Address: 615 S Dupont Hwy
City: Dover
State: DELAWARE

MtGox made no official comments.  It may be a prank or a stall tactic.  Am i missing anything (serious question)?
Edit:  Where did the word "approved" in the thread topic come from ???

Will Dwolla come back now?

Why would Mt.Gox be able to resume USD withdraws without registering as a money transmitter in all 50 states?  This won't happen for a very long time.  Why are you defending Mt.Gox, the facts are brutally honest about their liquidity position.

To be able to operate in all 50 states, each with their own rules, requires, all-in, $2.5 million in total lawyer fees, licensing fees, compliance officers, etc.  An additional $25k / mo to maintain.  And 18 months from initial registration.

Source : I asked Patrick Murck, the Bitcoin Foundation General Counsel at a gathering in DC at 1776.  That was his response.

How does that square with the fact that MtGox does not let its customers withdraw their money for nearly a month now?  Doesn't FinCEN have regulations about this?

How hard is it to get registered as an MSB?

(PM) There are two significant barriers: money and time. The minimum I’ve seen 50 state licenses done is for $2M in fees and surety bonds, and takes about 1.5 years to go through the licensing process. During the 1.5 years you’re not allowed to operate at all, even under a provisional license. This obviously causes concern for investors, because there is a signfiicant amount of money tied up for a long period of time, and no way to prove the business model before hand. An alternative is to work as an agent under another company’s MSB license, but you still have to make sure you comply with Anti-Money Laundering (AML), etc.