EDIT: Bitpay does perform extensive Know Your Customer(KYC) vetting on it's merchants to prevent being caught up in any fraudulent or illicit activity. This is a MUST for any legitimate virtual currency business. See e-gold ltd.
|
|
|
|
|
I have some info that may be helpful.
|
|
|
|
It is my understanding that bitpay is a "third party payment processor" which is EXEMPT from "money transmitter licensing"
Essentially Bitpay has a contract with their clients, the merchant and when a consumer sends bitcoin to bitpay and bitcoin converts that to cash and sends it to the merchant, the consumer is "legally" sending "other value that substitutes for currency" directly to the merchant. There for bitpay is not a "money transmitter."
But is it not possible for a drug dealer to sell drugs for btc then buy a couple of lamborghinis at a dealership for btc and sell them for dollars. In that scenario isn't BitPay enabling money laundering? That's a good question. I'm certainly no legal expert, but my take is that it is no different than that same drug-dealer buying his Lamborghini in cash. In Canada (where I'm from) a drug-dealer could do this, but the car-dealership would need to report the transaction to FINTRAC (our version FinCEN). So regardless of whether the drug dealer purchases the car in cash or in bitcoin, the dealership knows who the buyer is and reports the transaction. BitPay is just facilitating the transaction between buyer and seller; they are outside the scope of any reporting requirements. What you are discussing is called "Trade Based Money Laundering" and it is a bit problem. Auto dealer are required to file currency transaction report (CTR's) with FinCEN for the reason. EDIT: http://www.ice.gov/cornerstone/money-laundering.htm |
|
|
|
If I'm reading this right, you are predicting the inevitable failure of Bitcoin as a mainstream financial tool. Start-ups can't afford the cost of entry and power-brokers with deep pockets will crush new legislation, yes? Well the US isn't the entire world, the rest of the world doesn't really care how dysfunctional the US regulatory structure is. So I see two potential outcomes (and I should state this is my personal opinon doesn't reflect the views or intentions of my employer). One potential outcome is that startups abandon the US market. They operate when regulation while not non-existent is at least not an impossible burden. The ones which are successful gain the resources to handle the large fixed overhead that MT licenses creates. The other scenario is startups in the US comply with federal requirements, and are able to grow faster than the response from states; in essence grow to survive. It certainly is an obstacle to growth, and innovation but progress already routes around the damaged parts of the system. Bitcoin will survive, however the US may simple lose its status as the "tech capital" when it comes to Bitcoin related enterprises. I am not saying that is a forgone conclusion but the regulatory risk and uncertainty doesn't help. Here is what we will see in 2014. Companies like circle.com with $9M invested, Coinbase.com with $25M invested and any of the other companies that receive significant investment moving quickly to spend a lot of that money to become licensed in all the US State. I believe, but I'm don't know, that coinx.com has application in 30 or 40 states (since march 18th 2013) and have only received licenses in about 14 or 15 states so far. And another issue with NO federal regulator is the there is ABSOLUTELY no list of all the money transmitters in every state that requires licensing so there is really no way to tell. |
|
|
|
It is my understanding that bitpay is a "third party payment processor" which is EXEMPT from "money transmitter licensing"
Essentially Bitpay has a contract with their clients, the merchant and when a consumer sends bitcoin to bitpay and bitcoin converts that to cash and sends it to the merchant, the consumer is "legally" sending "other value that substitutes for currency" directly to the merchant. There for bitpay is not a "money transmitter."
But is it not possible for a drug dealer to sell drugs for btc then buy a couple of lamborghinis at a dealership for btc and sell them for dollars. In that scenario isn't BitPay enabling money laundering? A drug dealer would not be able to open an account with bitpay. (If that is what you are asking???) |
|
|
|
|
It is my understanding that bitpay is a "third party payment processor" which is EXEMPT from "money transmitter licensing"
Essentially Bitpay has a contract with their clients, the merchant and when a consumer sends bitcoin to bitpay and bitcoin converts that to cash and sends it to the merchant, the consumer is "legally" sending "other value that substitutes for currency" directly to the merchant. There for bitpay is not a "money transmitter."
EDIT: Bitpay does perform extensive Know Your Customer(KYC) vetting on it's merchants to prevent being caught up in any fraudulent or illicit activity. This is a MUST for any legitimate virtual currency business. See e-gold ltd.
|
|
|
|
|
Bitcoin price will stabilize and adoption will grow to the same degree that we see businesses accepting bitcoin as payment.
Bitcoin as a payment protocol currently holds more value for merchants then for users, as the merchants are the one who are hit with the high charges (which they then pass on to the consumer)
Merchants also need to understand that if they use a company like bitpay.com they assume NO currency volatility risk. That is the biggest fear and the biggest misunderstanding right now.
EDIT: I have no association with bitpay.com
|
|
|
|
|
I'll just leave this here.
The next Steve Jobs may be reading:
“Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”
|
|
|
|
|
We must understand that almost anyone born before 1964 can not possibly understand the tremendous potential of virtual currencies. (My apologies to those that do).
As the younger generation to comes into power in business and government we will see this type of technology fully adopted.
|
|
|
|
|
If you lost money it is a crime. Report it.
|
|
|
|
Am I naive to think that the Senate believes that expanded jobs and business based around cryptocurrency technology could be good for the U.S. (lower unemployment, more tax revenue)? And that politicians don't want to see all the business, talent, and capital associated with Bitcoin go to countries with more favorable attitudes? And perhaps they are able to recognize the parallels to the early days of the internet, and the see how well that worked out (for commerce and spying)?
That is a complicated question. As a political issue of course Legislators are considered about tax revenue, unemployment and consumer protection. Unfortunately the regulators do not care about this. Read the senate testimony. Then are on the record as saying that any benefit gained from moving a business off shore will be short lived as other countries will catch up the the level of US regulation. And we have already seen this most recently in China and India. |
|
|
|
|
I have traded successfully with Projects on a number of occasions. Two scenarios.
He's been hacked or
he's gone rogue.
Unfortunately it happens all the time.
I'll contact him directly.
I fucking HATE scammers.
|
|
|
|
|
Nice! I'll buy a few of those.
|
|
|
|
The current MSB/MT regulation is a massive economic boom for the GreenDots, PayPals, and Western Unions of the world. They will move massive sums of money in lobbying to kill any attempt that opens the flood gates for competitors.
Maybe this time will be different, it certainly is needed.
Classic regulatory capture. This does suggest why Bitcoin businesses should try and fight the regulators and exempt themselves whenever possible. The whole notion that placing a transaction on the blockchain is somehow the equivalent of transmitting sovereign currencies from one place or time to another on behalf of another party seems rather a stretch legally. Exactly. And that is exactly what must be challenged. |
|
|
|
|
QuestionAuthority,
Because "Money Transmitters" and therefore bitcoin businesses, have no Federal Regulator, FenCEN and the Department of Treasury has made BANKS the de facto regulator of "money transmitters." FinCEN has also labeled "money transmitters" "HIGH RISK" so instead of banking money transmitters banks are just closing their accounts and thus putting bitcoin companies out of business. See tradehill.com
A federally chartered bank that would assume the "risks" associated with virtual currency business would be a game changer.
Silicon Valley Bank (SVB) is banking coinbase.com and they are now a front runner in the new economy where the traditional backs may end up like classified advertising in newpapers after the advent of craigslist.com, potentially non-existent.
|
|
|
|
Anyone look at the idea of purchasing a bank seriously. We thought finding a federal charter was interesting but have not pursued the practicality yet. I also like what Milne did at Dwolla through their association with Veridian Credit Union.... you know of other examples that takes care of the register-in-every-state nightmare? CA registration alone takes months and even for those out of state they want to personally visit.....
Bob. If you are serious about a federally charted bank PM me. |
|
|
|
|
Death and Taxes
I hear you and certainly share your frustration. But I really do think there is something very different about the peer to peer nature of individuals transacting with individuals that will make it VERY difficult to regulate it out of existence.
QuestionAuthority, Absolute NOT.
Again i point to the Millybitcoin ruling and the other resent (non-public) ruling that show that individuals can make a difference and individuals united to achieve the same goal can have a HUGE impact regardless of the opposition.
|
|
|
|
|
Show Posts
