Bitcoin Forum

Want't sure where to post, but I'm trying the legal section, as this is not a mention in the press per se.

Source: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CGEQFjAA&url=http%3A%2F%2Fwww.finanstilsynet.no%2FGlobal%2FVenstremeny%2FRapport%2F2012%2FROS-analyse_2011.pdf&ei=rcYSUIy2BsT74QSH8oHQDA&usg=AFQjCNFf9K7smtO1c6Pmj6UON8Ge0vIQbQ&sig2=IlUJOury63p6DMZBmW5lng

The financial supervisory authority of Norwar released a Risk and Vulnerability analysis in March 2012 regarding the usage of information and communication technology in financial institutions.

Under 2.4.3 titled 'Shadow services on the internet' they wrote the following (translated manually from Norwegian to English):


Translated text:
Bitcoin is a digital curreny made in 2009. The name of the currency also refers to the "open source"-program Bitcoin that's used to send money. The maximum limit for how much Bitcoin can ever exist is 21 millions. It's therefore a static currency once all Bitcoins are distriibuted. Bitcoin is based on person to person technology (P2P), and is operating without any form of a sentralized server or middlemen. All payments are automatically verified through nodes in the P2P-network, and the system is built such that it is impossible to make more money or steal others money. This is ensured through the usage of a 'blockchain' which is stored by all the nodes in the network.

Bitcoins kan for instance be compared to "Monopoly money" where each single actor buys virtual moneyvalues called Bitcoin to do commercial transactions in a gated environment of trade. Liquidity in fiat money must always be available if the trade actors wish to exchange from Bitcoins to for instance US dollars or Euros. At the moment, this system is outside governmental control, and the risk is unknown.

The system is virtual and the american government has signalized that they want to remove this system before naive and gullible users become too involved. For such a system to work, it needs a 'rich' sponsor.


Orginal text:



My comments:

Coming from a governmental institution, we could not hope for a positive review, there's no reference where the mention about the us govt. wanting to get rid of bitcoin is written. We already know the US govt. is aware of bitcoin, heck the lead dev. visited the CIA a while ago, and the FBI leaked a memo mentioning bitcoin. So I call FUD on that one.

Still interesting they mentioned Bitcoin.

Uuuhh... it's outside governmental control  :o


Yeah sure sure  :D

and i don't get the "rich sponsor" thing...  ???

It seems they draw a bunch of random guys and assign them to write paragraph each. Burime of sorts. The first paragraph is matter of fact'ish objective description of Bitcoin, the following two paragraphs were farmed out clearly to complete idiots. "monopoly money", "rich sponsor" ffs!

interesting

This is another sign that the international diplomatic back-channels have been opened up and the order has gone out from Washington, "ban bitcoin!". All friendly countries are expected to do as they are told by Washington.

Lol This is so much funny.

Maybe they should start getting to know what bitcoin is. Bitcoin is not what they think

Its monopoly money, didnt you read!?

It's monopoly money?  That's why they're worth (almost) $9 a piece!  :D

Unless they employ educated IT personnel to analyze the bitcoin technology for their reports its all gonna be dangerous black magic to them. Natural reaction though.

They honestly seem to believe that the only reason Bitcoins have a greater than miniscule value is that someone keeps buying them up at a loss.

quote "For such a system to work, it needs a 'rich' sponsor."

one of the common first 5 minute misconceptions is that the money ought to be issues by a single authority. I don't think they get the point that the money is actually issued in a decentralized fashion. How can they - didn't exist before... (except gold digging :) )

Actually though, a decentralized system has an even greater need for a rich sponsor.

Say I want to create a new centralized currency, JoelBux, and I want them to be 1-to-1 to the dollar. If I issue them all myself, I sell them for $1 each. Then I offer to buy them back for $1 each. The only way someone can have a JoelBuck is if they bought it from me for $1. So when I have to buy them back, I've already got the funds to do it. I need to be rich, but I don't sponsor anything because I don't lose any money.

Now say I want to create a new decentralized currency, JoelCoin, and I want them to be 1-to-1 to the dollar. To keep the price up, I have to offer to buy JoelCoins for a dollar each. But since they're issued in a decentralized fashion, people can acquire JoelCoins without paying me any money and I might need to spend more and more money and accumulate more and more JoelCoins. As soon as I stop, JoelCoins drop in value (because there's no real JoelCoin economy) and I'm stuck with a ton of them.

Of course, if JoelCoins do take off in value and there's a thriving JoelCoin economy, I'm no longer "stuck" with a ton of them, I make a fortune.

Thanks for posting... interesting.

I assume by "gullible users" they mean "people who have realised how we screw them with centrally-issued fiat".

True story. Luckily with bitcoin we have a rich sponsor. It's the large user base who constantly negotiate the price :)

Direct link:
 - www.finanstilsynet.no/Global/Venstremeny/Rapport/2012/ROS-analyse_2011.pdf

Indeed. A large number of people who buy modest amounts of BTC to "speculate" is equivalent to one very large rich "sponsor." And lots of people are doing just that.

Exactly. It's hard for a lot of people to believe that this is what's really going on because it's inconsistent with their worldview. They won't believe that the world is changing until their noses get rubbed in it.

the american government has signalized ... Who signaled and what did they signal?

There was no citation. No details are known, unless some contact them and ask.

Thanks for all the insightful comments, some very entertaining too! :)

Any volunteers?

I believe it should be possible to get a comment on this comment from the Norweigian gov.

Maybe you can even request "aktindsigt" in the files they have about bitcoin?

Financial supervisory authority, what is Bitcoin?

I HAVE NO IDEA!

https://www.youtube.com/watch?v=DNeikvoqQ-s

this. would be interesting.

The world is changing, I feel it in the water...

Ok. most of this is google translate (since I couldn't take the time to do everything manually, but I read through it so it's kind of understandable. It's from a 3-column format pdf, so some vim-fu and google-translate-fu made it into the piece below. It's good enough to get an understanding. Forgive me if some of the language used is rather weird and for the spelling mistakes.


Since this thread gave you something to chew on. Did not expect so much interest actually, I have something more to tell you about.

This thread (use google translate if you're not fluent in Norwegian):
https://bitcointalk.org/index.php?topic=91897.0

I will tell you the gist of it:

The Norwegian Trade Union Finance Organization (not the same as the financial supervisory authority obv.) organizes finance and IT-employees and have nearly 40K members in Norway.

This is relevant, because most of these employees are bound by the rules set forth by the financial supervisory authority, so if nothing else, this makes them aware of that something like bitcoin does exist.

Magazine printed in 38550 copies.

They publish a magazine called 'Finans Fokus', and they've used the speculative headline 'Cryptocurrency is taking over' in their 4th magazine of 2012.

It can be downloaded from here:
https://anonfiles.com/file/c31894b1ed098cdffbf4db364b5b859f

English translation (used google translate) and fixed some spelling erros.

Heading in the start of the magazine:

Heading for article, page 11:


The financial turmoil after the finance                                              
crisis spread like rings in the water. Occupy
Wall Street was widely covered. Meanwhile,
aqnother protest movement created waves silently.

It is about a revolutionary new form of
currency - a global payment platform called 'creeping carded currency'. (Comment: I kid you not, that was what Google Translate suggested. lol. The correct term should be crypto currency)
Bitcoin is the first creep carded currency cryptocurrency.
The currency is, as the name suggests, a digital
single currency.
                                                  
We get our payment check electronically. We
do not consider electronic money that
unnatural. Our online payroll receive physical
life by being associated with a country's physical
currency.
                                                  
Bitcoin is an electronic code. It uses encryption to prevent falsify-
schemes. The same code can be used several times. In practice, works as a small bitcoin
program that runs continuously.
                                                  
                                                  
                                                  
"Not based on trust"
                                                  
It began on 3 January 2009. Satoshi Nakamoto presented its global currency
completely out of the financial system. Neither the
banks, central banks or governments can stir (Note: I thought of James Bond at this point: Shaken but not stirred!, the correct term would be 'touch')  currency.


In an announcement in about 30 pages Nakamoto lashes out with fury and how the
financial crisis inspired him to innovate.

He would create a system "that is not based on trust. "


From Nakamoto's view, the financial crises proved that we
 could not trust
 unpredictable bankers, central banks and
 politicians.
                                                  
                                                  
                                                  
   fact-box:
                                                  
                                                  
                                                 
     - The central bank requires customer confidence
 that banks will not dilute the value of the fiat currency.
But history is rich in examples
 that confidence will be abused. Banks get our money.
They will protect them and
    forward them electronically. But they
 invested them during the credit bubble, with
 only a fraction in reserve, according to the announcement.



                                                
Bitcoins on 44 exchanges

                                                
 Nakamoto freed piece of software to
 Initially, worth 200,000 kroner. This
 was certainly braggy for a piece of software and
 claiming that the code represents a value.

 The thing is that bitcoin not based on anything
 other than itself. Neither gold
 or other currencies back BITCOIN.
It is strange that the value of the BITCOIN was accepted.
Bitcoin has a real  purchasing power.
You can buy everything from electro-
 nod to rent hotel rooms with bitcoin.
 coin)
 The value of bitcoin was 8 per June 2011 at
126,116,250 euros.

Today there are 44 stock exchanges
 that can switch bitcoins to general
 currency. The total number bitcoins goes against 21
 million in 2030.

     All transactions are free.
Bitcoin operates in a field where neither central banks,
 banks, country or governments have control of it.
Nobody can quite figure out if the currency is legal.


For a half years ago, something shocking happend.
         startling: Satoshi Nakamoto disappeared. Before this, nobody knew if he really existed.
                - He had
                 communicated online with
                 many who helped him during
                the initial phases, but he had
               never revealed anything about himself. And
             since April noone has heard from him.

           He has left a extremely sophisticated software. It is
designed to eliminate many of the pitfalls by - traditional currencies.


To earn bitcoins

Bitcoins are distributed online in a highly sophisticated way.
Users can earn bitcoins by setting its computing power available
for bitcoinsystem.



A quote:




  Emphasize:


           "Whoever is behind the
       coding is of world-
           class, knows all about
    Encryption and peer-to-peer
        and has very good
       knowledge of the Economy
    and politics. It is either a
      fantastic team
    behind, or we're talking
              about a genius. "
        
  
           Quote, Dan Kaminsky, cyber expert
  
  

  

    A process called "Mining" has created a gold fever among
computer nerds. The more computing power to set the
available to bitcoin, the more you can bitcoins
serve. Computer nerds are therefore over
mining in the Klondike pure style.
    The site bitcoinminingaccidents.com
 if ("Bitcoin Mining Accidents - get rich or die
Trying ") tells of a student who was
injured in his attempt to recover bitcoins.
He had stacked up to five computers
each other. It took place around the clock.
One day it was generated so much heat from
machines that he had heat stroke while
asleep. It was so severe that the doctor described it
as a minor brain injury.
                                              
    - A brain injury is of course better
than to die. There is some dirt, but it could
worse, the student wrote on the website.
                                              

World class coding

The structure of bitcoin are so cleverly
constructed that leading cyber security
experts believe that in practice it is impossible
that Nakamoto is only one man.
(My comment: Who are therese leading experts?)
                                              
    - Whoever is behind the coding is a world class coder, knows all about encryption and
peer-to-peer, and has very good knowledge
about economics and politics. Either there is
a fantastic team behind, or we are talking about a genius, said cyber-
expert Dan Kaminsky of the magazine The
New Yorker.

But if the creator is a genius, he can
also be able to show up and run off with
everything as more bitcoins are coming into
circulation (Comment: Lack of understanding here).

If we can imagine such a case, we're talking about the most elaborate cybercrime possible.

Bruce Wagner is a New Yorker. For some
over a year ago he was a kind of spokesman
for Bitcoin. He was fascinated by the currency and
wrote a practical guide on how businesses
can use Bitcoin. Since then it is he who has spoken out about bitcoin (Comment: WTF!).

    - There is a kind of mystique about Satoshi
Nakamoto, because he is unknown. But it is
not the point. The most important thing is that he has
left a brilliant tool. The fact that he remained anonymous, shows that he is a genius. He
would surely have been in prison if
government had got hold of him, according to
Bruce Wagner, referring to the proceedings
against Wikileaks founder Julian Assange.
                                            
                                            
Perhaps the ideal currency
                                            
The myth of Nakamoto is colorful and in real-
ity an effective PR machine for bitcoin.
                                            

 But on a more general plan is bitcoin a response to
the criticism that financial institutions have experienced, as an extension of the crisis.


                                                
     It seems that there are three different

subgroups in bitcoin. Geeks  are attracted to the technical elegance behind
 bitcoin. Then there are the liberals, who are scpetic to everything centrally governed, including a central bank.
Finally there are those who operate in a grey zone and who are in favor of a system abolishing the suitcases full of cash
 and where the transactions are tax-free and hard to track.
                                                
An investment object
                                                
                                                
 Skeptics say that perhaps bitcoin is a sophisticated piece of software.
As a currency it is a primitive size. Nobel Prize recipient
 Paul Krugman is one of the critics.

He thinks that the progress is what hampers it's successful growth.
The cause of this is that since NAkamoto released bitcoins it has grown so much in value that people keep it as an investment object.

It is pointless with a currency system that rewards people who do not use money. What we want is to facilitate trans-
actions, and thus make society richer, writes Paul Krugman in his Homepage.

     He believes that what is now happening with
bittcoin, can be compared with deflated intent
 problems in Japan, where the currency for years
 became more and more valuable.

     - The bitcoin economy has in essence gone trhough a massive deflation, says Krugman.
     But for the Bitcoin spokes man Bruce Wagner, this is no problem.
     - I think there are many who agree with
 me that the financial crisis has shown that simply
 not a bad idea that ordinary people
 start saving again, says Wagner. He is
 now underway to launch a television program about
 bitcoin. Online, of course.



Creep Tova Luta (acc. to Google translate, lol) aka Crypto Currency

This is just a straight copy of some text from the Norwegian wikipedia about bitcoin and I saw no point in quoting it here, since it adds no value over what can already be read at the wikipedia site.

My comment: It seems like this was more of an old recycled article printed just to stirr some controversion, but printing this in a trade union magazine brings awareness of bitcoin to a larger group, and even if there are some incorrect statements in the article, it may spur more bitcoin interest.

Interesting read, thanks for sharing!

That seems more like it.

I think what they are referring to with the "signalizing" comment is Sen. Chuck Shumer's rant about bitcoin back in 2011.

http://www.techdirt.com/articles/20110605/22322814558/senator-schumer-says-bitcoin-is-money-laundering.shtml (http://www.techdirt.com/articles/20110605/22322814558/senator-schumer-says-bitcoin-is-money-laundering.shtml)

Hum.. today I did call the financial supervisory authority in Norway over this issue.

First of all I was interested in knowing what Bitcoins are classified as in Norway. After being put on hold and transferred between various departments, I finally was told that it's not classified as anything. To get a more detailed answer, I've written an answer to the person that I spoke with.

I've also asked if they could elaborate on the fact that the us govt has signalized they want to shut down the bitcoin system.

I would actually donate a tiny sum for someone to get a lawyer (or a student of law) to set up a letter in norwegian AND ENGLISH in which all these questions are FORMALLY demanded to be answered.

That could be arranged, but expect it to take months and months, before an answer is finally produced. The Norwegian bureacracy is mind blowing.

I was just on the phone with the 'Tax Department' as well, and asked about the VAT issue in regards to Bitcoin. First I talked to an old lady, and I could just as well have been talking Galactic Basic as far as she was concerned. So she put me on hold to someone else, and I had tro try to explain what bitcoin is to a non-tech person again, I was promised they would call me back. But the answer I would get then might not be authorative. To get a binding and authorative answer from 'The Tax Department', you need to pay 1720 NOK or 286.67 USD if you run a small company, or 430 NOK/ 71.67 USD if you don't have a company.

When you finally get an answer, which could take 4 weeks. If it is a complicated question it might take 3 months to process. The answer will be valid for 5 years, however, this is just in regard to the tax question of a future planned disposition, and doesn't have anything to do with VAT, only with tax.

A sample question could be:

"If I sell 1000 BTC, how much tax would I have to pay, if I made 30000 NOK in profits."

However, what would be more interesting to know, is: "What is Bitcoins classified as, and will a company have to pay VAT if they trade Bitcoins?"

Everybody seems to turn into a question mark when Bitcoins are mentioned. And when I say the word 'crypotocurrency' I loose most people apparently. So I try to explain it so a 'normal' person can understand, but if you need to do that, they're most likely unable to answer the question at all.

And in the end, when I finally receive some kind of an answer, I'm not at all sure I will get a correct answer, I'm used to get 3 different answers if I contact a large organization 3 times.. Perhaps going to a lawyer would be the best option, but still it wouldn't be a guarantee what he/she tells me would be correct, but it surely would cost a lot of money.

So let's see now. The tax department is going to call me back, and I'm waiting for an e-mail from the Financial Supervisory Authority.

For sure, bitcoin is not something most norwegians are familiar with.

FTFY

For sure, bitcoin is not something most members of the human race are familiar with.

I got an answer from the Financial Supervisory Authority of Norway, they didn't answer exactly my questions, but gave general answers, that's in essence saying the following:

Bitcoins are not regulated by Norwegian law. Payment services in general is regulated by ..snip.. Service providers of money payment services are also subject to anti money laundering law

We know there are talks on an European level whether bitcoin should be embraced by the directives governing financial services. It is also a discussion going on on a European level if there should be a specific regulation of Bitcoins/virtual currencies, because of the money laundering risk that is present when using such virtual currencies. We note that association to money laundering is punishable ..snip.., no matter what kind of laws that is appropriate for the business.


Still haven't heard anything from the Tax department.

Wow! Brussels bureaucrats are developing regulations for bitcoin, without any representative from the bitcoin community having an input. Just Visa and Mastercard whispering in their ears about how dangerous bitcoin is. That is not good!

Could you post the exact wording (in norwiegian) that you recieved please?

The bureaucrats in Bruxelles passing insane laws could do more harm to Bitcoin than anything else has so far.

Yes, this is actually quite bad. Any ideas what we should do ? What would the consequences of any legislation be, should we not get in touch with these people and communicate ?


See pm. Yes, I agree with you. Any hint as to what we should do ?