Bitcoin Forum

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What’s that? You want to start a Bitcoin business but don’t have half a million dollars to become compliant with FinCEN and secure a money transmitter license in each of the 50 states?

Well – at least you have the Bitcoin Foundation fighting against excessive regulation and unnecessary oversight. Right? Not exactly. According to foundation counsel and former Department of Homeland Security adviser Jim Harper, who joined the foundation in March, they don’t want just any ‘ordinary Joe’ firing up a Bitcoin based business. That privilege should be reserved for the well-financed minority.

Yesterday, Harper told the New York Times that Bitcoin businesses should not be open to just anyone.

"Well-formulated regulation can help because you don’t want everyone to start a Bitcoin business."

As reported Monday, the latest FinCEN rulings broaden the definition under which businesses will be considered money transmitters. In some cases, this could force merchants to close up shop or to stop accepting the digital currency. Some merchants that currently accept Bitcoin, and pay out dollars to staff or other third parties, could now fall under the agency’s new definition.

But the former DHS official supports regulation and has recently argued for more

"We argue that Bitcoin should be integrated into existing financial services regulation, and we point out the progress in states like Texas and Kansas (along with what’s pending in North Carolina), and in federal agencies like FinCEN, the IRS, and FEC."

However, that’s not what’s happening. The most recent FinCEN rulings would define some Bitcoin businesses as money transmitters, whereas if they operated with traditional currencies alone, they would not fall under the same definition.

According to Andrew Ittleman, an attorney at Fuerst Ittleman David & Joseph, PL, these new developments are a troubling sign for how the industry could be treated by the agency as a whole.

"It seems to me that, according to FinCEN, any company that’s dealing with bitcoin is a money transmitter, and I don’t know if I could have said that before before I read the payment processor note."

Many early Bitcoin adopters had hoped the cryptocurrency could bring new economic freedoms to those less privileged in the World. Some had envisioned a society that offered equal opportunity for both the rich and poor.

But these new regulations will probably make opening a Bitcoin business more exclusive and more restrictive than opening a traditional fiat-based enterprise.

Full Story: http://altcoinpress.com/2014/10/bitcoin-foundation-we-dont-want-everyone-starting-a-bitcoin-business/

It has become common knowledge that members of the foundation seem to think that bitcoin is their vehicle to become part of the elite ruling class. This is why they get so little respect in the bitcoin community.

If "just anyone" has a product or a service that others find useful they have every right to operate in the bitcoin market place. 

Anyone do wants to start a business should be able to do so whether the business is base on fiat or a crypto. It may not be easy to run a business successfully, but that is another matter.

Sounds like TBF doesn't have much more rope before it hangs itself as the NRA of economic liberty (if you can't afford bribes, regulatory capture, and other crony corporatism).

Bitcoin businesses are not needed.

I don't see any possible useful "business" in the bitcoin field. All of them are just acting as middle man.

Bitcoin was supposed to be a means for people to transact with people. or people to buy stuff at stores. without their bitcoin being in the hands of middle men.

Didn't take long...lol

I see bitcoin businesses as any business that accept bitcoin as payment, or pay for your service in bitcoin. It doesn't has to be like money exchanges.

For the most part this is true. There are very few bitcoin businesses that don't fall under the new definitions.

It is just a wink-wink to fiat 1%:
"Oh, don't worry, you wouldn't have to hold hands with plebs, it is a 'good' well-financed crowd here..."

Here's the original article (New York Times):


Former S.E.C. Chairman to Advise Two Prominent Bitcoin Companies
http://dealbook.nytimes.com/2014/10/28/former-s-e-c-chairmain-to-advise-two-prominent-bitcoin-companies/?_php=true&_type=blogs&_r=0 (http://dealbook.nytimes.com/2014/10/28/former-s-e-c-chairmain-to-advise-two-prominent-bitcoin-companies/?_php=true&_type=blogs&_r=0)



Not sure whether it's a good news for the bitcoin community in general. I hope it's not a case where big players are trying to influence the regulators to prevent their smaller competitors from operating.

There will be real businesses later on. Right now it is the same vig idea. You give us money, you trade it to something else, but we take or 1-2% roundtrip fee.
However, the gist of latest announcements made me think that there is really no money to make here, which is OK, I guess.

According to Andrew Ittleman, an attorney at Fuerst Ittleman David & Joseph, PL, this would mean that any business that wants to accept Bitcoin, would need to fork over hundreds of thousands of dollars to become licensed as a money transmitter in each state, in addition to several other requirements.

"It seems to me that, according to FinCEN, any company that’s dealing with bitcoin is a money transmitter, and I don’t know if I could have said that before before I read the payment processor note."

Basically, if this attorney is correct, the rulings are the equivalent of a ban on Bitcoin in the United States.

http://www.coindesk.com/fincen-rules-bitcoin-payment-processors-exchanges-money-transmitters/

Not literally, but close, that's why I posted that there is no money to make here.
However, Kraken in located in US, but does not deal with US customers. Such companies are possible since FINCEN does not regulate non-US citizens in other geographic locations.

This attorney is incorrect. The only reason why you would need to become a money transmitter if you are accepting bitcoin is if you are trading fiat for bitcoin (or bitcoin for fiat). If you are accepting bitcoin for cute puppies then accepting bitcoin is little different from you accepting checks as payment

merchants wont stop accepting bitcoin. because nearly 95% of them dont actually accept bitcoin, they simply link customers to a bitpay/coinbase payment page..

that being said the bitcoin foundation have truly lost the plot if they think that bitcoin needs any special regulations that are above fiat regulations. though i have not looked that much into the bitcoin foundation this year, i do find it funny if they are advocating regulations, whilst also running to london due to less red tape

Yes just like you don't need a money services license to be a plumber and accept payment for your services.

He obviously means financial services businesses. I don't want to see a plumber starting a financial services company.

I've been in Bitcoin for a long time now and people always ask me why I don't run a Bitcoin business. My answer is that I'm not interested in running a financial services company. It sounds boring as crap. I'm interested in software, but I'm not interested in creating yet another wallet client or website, just like I don't want to write my own version of Quicken. Those also sound boring as crap. All those people that are excited about starting a financial services company based on Bitcoin are going to find out that they have spent years working on stuff that is boring as crap.

I'm not going to start a Bitcoin business because it is boring as crap, and neither should you.

You know "SatoshiDice" was situated in the USA. The US regulations and rules and fees got ridiculous and they moved their whole operation to Panama.

Guess who is losing out on Tax revenue and Office rent, employment opportunities, bandwidth income, electricity and water income etc. etc. And that is only one business ^Smile^

Let them shoot themselves in the foot and bring in all their crazy rules and regulations. Unemployment will just increase and the people vote will determine their fate.  ^Grin^

FINCEN protect the ruling elite, and it's masters, under the smoke screen of protecting the general public.

Money laundering and terrorism funding will still exist, with or without regulations. Trying to stop it with regulations that kills it's economy in a time, where unemployment are at it's highest, is just crazy.

Use the tax money and put feet on the ground. Use intelligence to follow the money. If they could stop Silkroad, without this, why would they need to use this now? To invade your privacy and to protect certain individual interest. ^Frown^ 

I do not understand would doing this prevented Mt Gox in the first place assuming that the collapse did not take place earlier. I mean the size of it is considered big right?

Maybe they did it not because they were using bitcoin but what they are doing is unregulated gambling.

We all know that legalized casino gambling is all done on the up and up.  ::)

Wow, that is terrible if true. This is the opposite of the spirit of bitcoin. Anyone should be able to use it whether for personal or business. I hope they are not trying to kill it with regulation for everyone else.

And you know, how "regulated" gambling happen? How many "Donations" / "Bribes" etc are given to "regulate" it?

SatoshiDice use the blockchain to regulate themselves. Is this a good thing? Who knows

Is this better than the regulation through bribes? Who knows. ^confused^

A friend of mine, who owns a small "legal" gambling operation, told me, he had to spend $4000 US on 3 representatives from the gambling board for a weekend of wine and dine, to seal the deal on his license for the next year. {Not in the USA} ^frown^

So who benefit from this? How much does the big boys pay?  

What is next? Bitcoin businesses have to pay a foundation {mafia style} to own a bitcoin business?

Because clowns make people feel good and laugh. :-)

it's not boring, but it has risk, a lot.