Bitcoin Forum

http://www.bloomberg.com/news/2013-08-12/n-y-regulator-subpoenas-firms-over-bitcoin-crime-risks.html

"New York’s top banking regulator sent subpoenas to 22 digital-currency companies, including BitInstant LLC and Dwolla Corp., to determine whether new regulations should be adopted to govern the emerging industry, according to a person familiar with the matter."

...

"In addition to BitInstant, Dwolla and Coinsetter, the regulator sent subpoenas to the following service providers: BitPay, Coinabul, Coinbase Inc., CoinLab, eCoin Cashier, Payward, Inc., TrustCash Holdings Inc. and ZipZap, the person said."

"Butterfly Labs, a technology company, also received a subpoena, according to the person familiar with the matter."

 Interesting times ahead.

dude is confused about people complaining about late orders with hardware vs conversion

Why didn't Bitsyncom get one?

 If I were to hazard a guess, I might speculate that the Bitsyncom issue became a problem after all the paperwork and investigation had been done into this filing.

Why would you say that, he clearly identifies the service providers and then calls BFL a tech company.  I don't think he is confusing the two at all.  It also mentions in another article (WSJ I believe) that the subpoena was for information on a wide range of topics.  One of which named specifically was consumer protection.  It makes all the sense in the world they would want to talk to BFL.

Point is it now can, and should concern Bitsyncom enough to stopping running away from issues...

Is there a public copy of the subpoena anywhere?  Is that information released normally?

Guys, understand what the New York Department of Financial Services does and you will realize this is about bitcoin as a currency, and fraud related to it ala Pirate40. In fact most likely a direct result of that case.

http://www.dfs.ny.gov/about/press2013/memo1308121.pdf

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First, safety and soundness requirements help build greater confidence among
customers that the funds that they entrust to virtual currency companies will not get
stuck in a digital black hole. Indeed, some consumers have expressed concerns about
how quickly their virtual currency transactions are processed. Taking steps to ensure
that these transactions – particularly redemptions – are processed promptly is vital to
earning the faith and confidence of customers.

Second, serving as a money changer of choice for terrorists, drug smugglers, illegal
weapons dealers, money launderers, and human traffickers could expose the virtual
currency industry to extraordinarily serious criminal penalties. Taking steps to root out
illegal activity is both a legal and business imperative for virtual currency firms.

Finally, both virtual currency companies – and the currencies themselves – have
received significant interest from investors and venture capital firms. Similar to any other
industry, greater transparency and accountability is critical to promoting sustained, longterm investment.

We look forward to working with the virtual currency industry and other stakeholders as
our inquiry proceeds, and we move to put in place appropriate regulatory guardrails to
protect consumers and our national security.

Correct. The investigation has more to do with financial products and transactions, that is the only concern of this agency.

Which law firm is representing BFL?

Is a money printer not a financial product, even in it's crudest sense?

wrong that statement covers everybody. BFL receiving millions of dollars in funding is a financial transaction. Their statement involves every exchange and company that deals with bitcoin and virtual currencies.

Exchange of money to buy an actual product is not in the realm of this agency. Only psuedo financial products and transactions. You can insert your own jokes of what a real product is in regards to BFL i guess. Doesnt change what this agency is meant for. NY has a whole agency for consumer protection that exchange of money for product falls under.

If someone is committing a fraud connected with Bitcoin (like pirate40 for instance), then the NTDFS would have the wherewithal to do an investigation.

"The Department has five divisions: the insurance division; banking division, financial frauds and consumer protection division ("FFCPU"), capital markets division, and real estate division."

Maybe they will add a 6th division, the Bitcoin division! Since there are no banks or insurance companies involved yet with Bitcoin, I would imagine their primary concern at this point is consumer protection or financial frauds.

no... BFL is not located in NY - NY the state has jurisdiction within its borders.

noone on this forum seems to understand jurisdiction. it's like AsicMiner getting a subpeona from him. does it make sense?

i mean they can ask nicely after all- subpeona is not asking nicely

According to the terms set forth in his probation, Sonny Vleisides has to report to his probation officer that the company he resides over was served. But that's such a small price to pay for fleecing hundreds of millions from the elderly with his 15 year running lottery scam.

But not when that transparency and accountability is the result of government bureaucracy and regulations.

New York is a big economy. Would your company want to risk being denied the ability to do business there? Also NY and CA tend to work in lockstep. If NY starts finding anything, you can be sure that CA will start looking too. CA's economy is larger than many countires.

Texas is the largest economy in the US, 3rd largest economy in the world (or something like that).

When you do business in any state (regardless of where the company is incorporate or operates) you must comply with laws of the state you are doing business in.  If BFL has customers in NY state and the authorities feel they have broken NY state laws they can go after them.

The DFS has very broad powers to investigate and regulate. Since every major bank on the planet has large sums of money flowing through New York, most financial institutions are subject to the reach of the DFS (Standard Chartered found this out and capitulated). If they find a company committing a fraud using Bitcoin, the DFS can go after them through their bank and refer the case to the Department of Justice for criminal prosecution.


Second largest, California is almost half again as big. Texas would be the 15th largest in the world.
http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP
http://en.wikipedia.org/wiki/Economy_of_Texas
http://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_(nominal)

Texas has a big economy, it's third behind California and NY.  It's 14th in the world if comparing the state against other countries.  Texas residents don't fare too well, though, ranking 25th among US states, which earns TX the "impoverished" state qualifier for their below-average earnings per capita.

And they are running out of water too:
http://www.theguardian.com/environment/2013/aug/11/texas-tragedy-ample-oil-no-water

One word:  China

Wrong.  It's a Nevada corporation.

How does China affect an American LLC getting a subpoena.

With a corporate address in Westchester County, NY, I believe.  It has been posted on Avalon pitchfork threads and should be easy to find.  I'm certain it's NY, though.

He is an American... just have them add his name right? One email all that is required.

There goes BFL's refunds!

Oh wait...they weren't offering any willingly. LOL

Seeing that none of this has anything to do with BFL's late delivery on their products.. or anything to do with what BFL is called out for on these forums.. it's obvious nothing is wrong with this picture.  If they have a subpoena.. they will go talk to a commission in NY.. hash things out.. answer some questions.. and that's it.  A subpoena is not a "charge" or anything to do with threats against BFL to "SUE YOUR PANTS OFF!!" or "..GOING TO CONTACT THE BBB, FTC, FBI, ETCETC".

Re: "Butterfly Labs...also received a subpoena" dated 2013-08-12

LOL. JUST LOL.

OT rambling on TX comment
TX is in 2nd (~$1.3t) for US, way behind CA (~$1.9t, bigger than India) in 2010. Using same year, TX would be 13th between Mexico (~$1t) and Spain (~$1.4t). Some data-collectors combine European countries into one big "EU" blob, where TX would be in 10th place. (put TX one more place down if you include CA in those lists, too)

If it makes TX feel any better, they have a bigger economy by nominal GDP than New Zealand, Israel, Thailand, and Switzerland combined. Houston alone has a significantly higher GDP than Greece. In the US, when we think about CA's troubled economy and $.4t debt, it seems small and inconsequential (it's not very rare to be talked about where I am), but it's roughly the same amount of debt as Greece holds where a default is supposed to be catastrophic. Even the default by Detroit, the largely-irrelevant living dinosaur, was ~50% larger than Iceland's GDP in 2010.

Nations' GDP (2010) http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf
TX GDP (2010) http://www.usgovernmentrevenue.com/state_rev_summary.php?chart=Z0&year=2010&units=d&rank=a
Houston GDP http://greyhill.com/gross-metropolitan-product/
Other sources you can find for yourself :)