Bitcoin is not ready for prime-time in africa. but https://kipochi.com/ is trying to do something about it. |
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What type of business what type of work?
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Regardless of what happens in the civil case I would expect criminal prosecution. "bitcoin is money" He sole money from people. And other may have been complicit in this effort. There is a reason none of the PT's wanted to talk to the SEC. However they may already be cooperating with the government in exchange for leniency. Madoff took a whole slew of people down with him. http://en.wikipedia.org/wiki/Participants_in_the_Madoff_investment_scandal |
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Well sadly FinCEN guidance doesn't just stop at third party funds they include second party as well (but only for Bitcoin) so that was not entirely expected.
Example: you send money to BCB by WU.
you ----> WU -----> BCB
Obviously a Money Transmitter.
Example: you exchange USD for Euros with a currency exchanger at the airport.
USD: You ----> Broker
EUR: Broker ---> You
Not a Money Transmiter. It is a MSB (dealer in foreign currency) but the rules at the state level are negligible compared to a money transmitter
Example: you exchange USD for BTC with a BTC dealer/broker (coinbase)
USD: You ----> Coinbase
BTC: Coinbase ----> You
Between the three scenarios, the later two have far more in common then the first one. The last two only involve two parties (a business and its customer) while the "classic" MT example Western Union involves three parties (sender, MoneyTransmitter, receiver). However FinCEN ruled that an exchanger of virtual currency is a money transmitter while an exchanger of real currency (under MSB regs of BSA) is NOT a MT but a different class of MSB.
This is the result of FinCEN trying to force a round peg into a square hole.
this is interesting and you have a good point. but if you take MtGox for example there are no You << >> MtGox exchanges, there are You authorizing MtGox to handle your funds and orders on your behalf with other parties - clearly a transmitter, such as paypal btw. I agree although ironically again Forex companies are not MT they are broker dealers. Still if FinCEN articulated third party that would at least be consistent with existing classification. However FinCEN didn't leave the line there. They went with ANY exchange (unless exempt) of real currency for virtual currency or virtual currency for another virtual currency they felt the need to include virtual to virtual yet real to real is not consider a MT by existing law. The funny (if it wasn't costing me a small fortune) part is that means it works like this (unless an exemption applies): Exchange Virtual Currency for Virtual Currency = Money Transmitter Exchange Virtual Currency for Real Currency = Money Transmitter Exchange Real Currency for Virtual Currency = Money Transmitter Exchange Real Currency for Real Currency = Not a Money Transmitter In the Bitcoin Foundation answer to the cease and desist from the State Of California DFI they also made the Forex argument: "This conclusion is confirmed by the DFI's December 6, 2011 opinion letter entitled "Foreign Currency Exchange Services - Not Subject to money Transmission Act."21 In that opinion, the DFI determined that the receipt of dollars and the delivery of pesos for a fee did not constitute money transmission." http://www.scribd.com/doc/151346841/Bitcoin-Foundation-Response-to-California-DFI |
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I guess this paves the way for more regulations and other B/S as well. Then again with all the trouble Mt. Gox was having maybe we're already at that point.
Not necessarily more regulation but hopefully more clarity. That is how this process works in the US. |
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the precedent with this particular case is that
- snip -
This case isn't over yet. There is plenty of time for both defense and plaintiff to make a variety of arguments about what bitcoin is or isn't. How bitcoin is defined, how its value is determined, and how ownership is determined could all play a part in this case. There is no way to know for certain what precedent will be set by this case until after it is over. Trendon Shavers is currently defending himself. He's slick but obviously not that smart. This will not end well for him. |
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If he used toothpicks instead of bitcoins, Judge would rule investment securities either way.
Right. The judge's opinion is simply that "Bitcoin investments met the requirements of an investment contract and thus constituted “securities” under federal securities laws." This is based on a Supreme Court decision: "An investment contract is any contract, transaction, or scheme involving (1) an investment of money, (2) in a common enterprise, (3) with the expectation that profits will be derived from the efforts of the promoter or a third party." That's Bitcoin. Deal with it. This has some implications. One is that anyone operating a "Bitcoin exchange" in the US will have to meet the SEC requirements for being a broker/dealer. Would this apply to those that exchange Bitcoin<->USD and vice versa out in the open (Satoshi Square)? I'm thinkin of starting an open exchange where I live but don't want to get in trouble for it. well, if you make a business out of it instead of an occasional swap here and there you probably would want to cover your bases with your State and FinCEN Nagle, these implications were understood well in advance to this 'precedent', well before FinCEN/GAO guidelines released earlier this year. I remember saying it here on this forum back in 2011, if a business is in handling and processing 3rd party USD here in States, first-most thing such business needs is to become licensed for money transmitting and money business service and fully AML compliant in every state it's going to operate. I just don't see how current case relates to or affects any of this. it's called Precedenthttp://en.wikipedia.org/wiki/Precedentthe precedent with this particular case is that if you operate bitcoin securities business here in states you fall under SEC jurisdiction, that is all, no other precedent had been ruled and established with it. Right but I expect other precedents to be set by this case. |
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If he used toothpicks instead of bitcoins, Judge would rule investment securities either way.
Right. The judge's opinion is simply that "Bitcoin investments met the requirements of an investment contract and thus constituted “securities” under federal securities laws." This is based on a Supreme Court decision: "An investment contract is any contract, transaction, or scheme involving (1) an investment of money, (2) in a common enterprise, (3) with the expectation that profits will be derived from the efforts of the promoter or a third party." That's Bitcoin. Deal with it. This has some implications. One is that anyone operating a "Bitcoin exchange" in the US will have to meet the SEC requirements for being a broker/dealer. Would this apply to those that exchange Bitcoin<->USD and vice versa out in the open (Satoshi Square)? I'm thinkin of starting an open exchange where I live but don't want to get in trouble for it. well, if you make a business out of it instead of an occasional swap here and there you probably would want to cover your bases with your State and FinCEN Nagle, these implications were understood well in advance to this 'precedent', well before FinCEN/GAO guidelines released earlier this year. I remember saying it here on this forum back in 2011, if a business is in handling and processing 3rd party USD here in States, first-most thing such business needs is to become licensed for money transmitting and money business service and fully AML compliant in every state it's going to operate. I just don't see how current case relates to or affects any of this. it's called Precedenthttp://en.wikipedia.org/wiki/Precedent |
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This will continue to be a precedent setting case and I believe we'll see criminal prosecution of Trendon and maybe even some of the pass throughs.
As well as an official US legal opinion that bitcoin is legal tender? its not an official us government legal opinion. It's just a court ruling that simply stated just because bitcoin is not officially sanctioned money doesn't mean one can accept it without responsibility. The next interesting concept will be how to legally prove ownership of addresses and BTC inside it. Again, This will be a precedent setting case.... |
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Bitcoin can be both a currency and a commodity. Regulators have yet to figure that out. Or that have figured it out and they have NO idea what to do with it. They can't allow it cause it will over take the current fiat currency and end their ability to take advantage of seiniorage. They can't ban it cause it will just continue to thrive underground. I don't think they know what to do. Any anyone smart enough in the current legacy fiat financial system knows they will be about as useful newspaper publishers are today in another 10 year. Jeff Bezos is buying The Washington Post http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/06/jeff-bezos-is-buying-the-washington-post-heres-what-you-need-to-know-about-the-sale/I can see the headline now. "Charlie Schrem to Buy HSBC" |
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file sharing has not ended movie rentals
iTunes has not ended CD sales
email has not ended the post office.
True. But currency is very different from those examples. It is the most important commodity. There won't be two somewhat equally used forms of currency around, like with CDs and iTunes. There will either be one or the other. And email won't end the post office. You can't email a package.  But you can send VIA UPS or FEX EX both successful private forms of package delivery. Bitcoin too is a private currency. It is very possible that there emerges bot a public and private payment systems. UPS and FedEx private? Think so? http://www.talkleft.com/story/2012/11/16/183045/99/crimenews/DEA-vs-Fedex-and-UPS-Why-a-Criminal-Probe-yes Private. (well they may be publicly traded) But the point being is that they are successful in that they operate within the boundaries of law. Even if that law requires them to co-operate with government investigations. Sorry. This is unfortunately the world we live in. You certainly don't have to participate. Any many choose not to. Check out: http://agorism.info/ |
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I think many have forgotten: "Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system." http://bitcoin.org/en/Stop opening the doors for government control! My $.02!  LostDutchMan what you fail to understand is that NO ONE opened doors to government control. Laws currently exist with regards to the transmission and use of currency. FinCEN only clarified that with their March 18 Guidance. Now you may not think that is fair, or it may not be right, but you can not deny that it exists. And that guidance was handed down without any effort by DATA or the Bitcoin Foundation or anyone else. What DATA is trying to do is prevent more doors from being closed. I suggest you research the pre-paid card industry. They faced similar regulation and now you can find rack of them hanging in every Walmart, K-Mart, Wallgreens, CVS etc. And if that industry did not interact with the government and regulators through the Network Branded Prepaid Card Association ( http://www.nbpca.com/) that would currently not currently be the case. |
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file sharing has not ended movie rentals
iTunes has not ended CD sales
email has not ended the post office.
True. But currency is very different from those examples. It is the most important commodity. There won't be two somewhat equally used forms of currency around, like with CDs and iTunes. There will either be one or the other. And email won't end the post office. You can't email a package. But you can send VIA UPS or FEX EX both successful private forms of package delivery. Bitcoin too is a private currency. It is very possible that there emerges bot a public and private payment systems. |
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file sharing has not ended movie rentals iTunes has not ended CD sales email has not ended the post office. YET. So don't expect digital currency to replace fiat anytime soon but it is a pretty slick alternative and the more people learn about it the quicker the economy will grow. Look for extensive use first in -international remittance -on line payments much work has to be done on the UI and the payments protocol. I'm very much looking forward to bitcoin v. 0.8.9 if they can implement BIP 70 https://en.bitcoin.it/wiki/BIP_0070 |
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I agree.
If you are familiar with the M-pesa history in Kenya, they encountered the same problem. Family members in the cities were remitting funds to their villages and the villages were running out of funds to distribute. M-Pesa agents were charges with carrying bundles of money to these vendors to replenish their supplies. As the use of M-Pesa grew and the digital currency was used for payments of goods and services this problem did diminish. I'm not certain of the current situation.
The solution seems to lie is keeping the economy within the digital currency. That may be a longer time coming.
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I completely understand your position and thank you for understanding mine.
Not possible for governments to control crypto?
Wanna bet?
How about the USA govt or any govt anyplace on the planet decides that since crypto cannot be controlled, crypto simply gets shut down?
The USA feds have a strong history of domain seizure and any or all of the exchanges and the sites of the cryptocurrencies themselves could be shout down literally by the push of a button and the right software. They have done it already (See Megaupload for example) and as soon as they figure out that there is no real way to tax crypto, they will hammer away at it until there is.
The NSA could use Narus software to track down every miner on the planet if they haven't already.
Crypto was designed and intended to be an essentially underground economic system and should remain that way.
My $.02.
Anything is possible. But I don't this this statement is accurate. " Crypto was designed and intended to be an essentially underground economic system" |
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Anonymous buyer my ass! Eric paid off the shareholders, threw them a bone to keep them off his back and kept the rest of the profits. Moving to Panama would not protect him from prosecution and he's smart enough to know that.
If/when this anonymous buyer emerges or SD return in another form I'd gladly apologize.
Unfortunately since the beginning of bitcoin time Bitcoiner have proven to be an awfully gullible bunch.
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