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Title: Would a US based escrow service be a Money Transmitter? Post by: coderjeff on August 16, 2013, 08:18:42 PM Example Scenario (everyone US based):
User A wants to sell 1BTC for USD User B wants is willing to purchase for USD cash Company C offers an escrow service to protect both parties for a small fee A sends 1BTC to C to hold in escrow and provides their bank account info C provides the banking info to B B deposits cash into A's bank account at a local branch and provides transaction details to C C notifies A that B claims to have made the deposit and asks A to verify the funds Upon verification from A, C transfers 0.98 BTC to B and keeps .02BTC (for example) as an escrow fee Would a US-based company be able to provide this service without being considered a money transmitter? Would the dollar amount of the transaction make a difference (say an escrow was limited to 4BTC max?) Title: Re: Would a US based escrow service be a Money Transmitter? Post by: adub on August 16, 2013, 08:32:15 PM My take is no. They are just holding coins.
Quote C provides the banking info to B This is a nuance that might complicate things. Title: Re: Would a US based escrow service be a Money Transmitter? Post by: astutiumRob on August 16, 2013, 08:54:02 PM Sounds more like a money-laundering setup than an escrow or a money-transmitter
Title: Re: Would a US based escrow service be a Money Transmitter? Post by: adub on August 18, 2013, 12:38:46 AM Would a US-based company be able to provide this service without being considered a money transmitter? http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/ (http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/) Quote Some aspects of the FinCEN guidance were comforting. Some were troubling. Some were death knells for otherwise successful businesses. Some could only be described as confusing. Here are the highlights:
Title: Re: Would a US based escrow service be a Money Transmitter? Post by: gweedo on August 18, 2013, 12:40:46 AM Would a US-based company be able to provide this service without being considered a money transmitter? http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/ Quote Some aspects of the FinCEN guidance were comforting. Some were troubling. Some were death knells for otherwise successful businesses. Some could only be described as confusing. Here are the highlights:
This is exactly why I don't do escrows anymore. My legal team actually told me not to anymore. Title: Re: Would a US based escrow service be a Money Transmitter? Post by: MSantori on August 18, 2013, 03:17:06 AM Would a US-based company be able to provide this service without being considered a money transmitter? http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/ Quote Some aspects of the FinCEN guidance were comforting. Some were troubling. Some were death knells for otherwise successful businesses. Some could only be described as confusing. Here are the highlights:
The vivid prose! The clever rhetoric! Title: Re: Would a US based escrow service be a Money Transmitter? Post by: Hfleer on August 18, 2013, 06:32:50 PM Sounds more like a money-laundering setup than an escrow or a money-transmitter Would a US-based company be able to provide this service without being considered a money transmitter? http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/ Quote Some aspects of the FinCEN guidance were comforting. Some were troubling. Some were death knells for otherwise successful businesses. Some could only be described as confusing. Here are the highlights:
Possibly Money Transmitter and Launderer. The double whammy. Title: Re: Would a US based escrow service be a Money Transmitter? Post by: bassjoe on August 19, 2013, 02:43:43 PM Maybe. Most money transmitter laws are extremely broad and none specifically exempt escrow companies (if the escrow is a division of a bank and governed by banking regulations, then it is exempt). Under a plain reading of the statutes, escrow companies are required to get a license.
That said, escrow is an extremely old concept -- using a trusted third person to guarantee payment/delivery -- and regulation of this industry has been around for, literally, hundreds of years. It just seems odd to add another layer of licensure and regulation (along with likely a different set of regulators who may not understand escrow) on top of their business. There is some debate as to whether escrow companies need to be licensed as money transmitters, as well. Obviously, non-bank independent escrow companies are (or should be) against the idea but there's been no effort to exempt them from the laws like there has been with the recent effort to exempt payroll companies in California. Title: Re: Would a US based escrow service be a Money Transmitter? Post by: champbronc2 on August 20, 2013, 02:39:51 PM What if the sellers were responsible for being registered?
"A person that is an MSB solely because that person serves as an agent of another MSB is not required to register." Does this apply here? |