The recent FinCEN guidance states that any bitcoin business that buys or sells bitcoin for non-personal use (my interpretation and IANAL) must register with the Financial Crimes Enforcement Network (FinCEN) as a Money Service Business (MSB).  

FinCEN is a Federal regulatory agency within the US Department of Treasure entrusted to aid law enforcement in the fight against Money Laundering and Terrorism Finance as per the Currency and Financial Transactions Reporting Act of 1970 which was amended by the USA PATRIOT Act in 2001. A legal framework with falls under the broad umbrella of the Bank Secrecy Act (BSA).

The two most important functions of this regulation are Know Your Customer (KYC) an Anti Money Laundering (AML) regulation.

To my knowledge TC only accepts bank wires for his business.  To send or receive a bank wire you must have a bank account.  And if you have a bank account in the US you know the kind of documentation required. So I doubt there is much anonymous activity going on in his business  TC also has limits on the amounts of funds you can send and receive (I'm assuming as per this guidance).  

I believe payout options also include paypal, dwolla, etc who are also regulated not only by FinCEN but also by Money Transmitter (MT) laws and regulation which provide  consumer protection for citizens of each state in which a MSB has clients.  Which again links these funds and their transfer real people.

To my knowledge NO states except possibly Texas and (depending on your interpretation) possibly New York currently requires a bitcoin business to be licensed in their states.

I am in no way associated or affiliated with TC (but I have used there EXCELLENT and PROFESSIONAL service on a few occasions) so again I would assume that TC is currently complaint with any existing regulations (however gray this area currently is).

Now FinCEN, The Department of Treasury and/or the State may and probably will rule further in this area, but until then, I don't see any reason why TC would be operating illegally.

However the bigger problem for bitcoin businesses and obviously for Liberty Reserve is that it does not matter if regulation applies to a your business because federal criminal laws apply (as we see with the LR case) which prohibit anyone from not only being involved in the movement of the proceeds of criminal activity but also aiding this movement or ignoring the potential source of such proceeds. (SEE E-GOLD)  

As we have seen in the LR case and as we may see in the pending MT Gox case, this gives law enforcement discretion to prosecute criminally.   And since bitcoin businesses are potentially open to abuse from money laundering and other financial crimes, they may now become  targets for prosecution if these businesses enable this type of activity.

What this does mean is that to operate legally,  bitcoin business will be required to abide by these developing regulations (which it seems TC is doing) and the biggest impact will be the end of anonymity in (the regulated) bitcoin economy which is probably not a bad thing.
 
And after all the hacks and scams and financial fiascoes we have seen in bitcoin, if there is one business I see leading the way it is Tangible Cryptography.

just my 2c.

Jonathan,

Thanks for your response.    I'm not trying to discourage new bitcoin businesses but if you are serious about your business you have to at least have to connect it to a real world person.  This give you credibility and also hopefully makes you more accountable.

(ie. Whether or not BFL is a scam - we know who they are and should users chose to do so they can pursue them legally.)



I wrote the following post before reading your response but I'll leave it here for posterity.

Good luck with your endeavor.

BCB



////////////////////////////////////////////////////////////////////////////////

The problem with too many bitcoiners is they are (probably) well meaning hobbyists who see the limitless possibilities of the protocol (as we all do). But what that fail to realize is that they are essentially opening financial service business which mean you are responsible for the custody of other peoples' funds (not to mention laws and regulation in every country not only in which they operate but in which they also have customers).

And as we've seen toooooo often in the community are Business come along  and provide a popular service that starts on a $5/month shared server that grows to control hundreds of thousand or even millions of dollars of value.

Then it gets hacked, or a nefarious owns absconds with the funds or the inexperienced ownership just make bad business decisions and everyone is FUCKED

See:

Bitcoin Savings and Trust (HA!)
Bitcoinica.com
Mybitcoin.com
bitcoin-24.com
bitmarket.eu
GLBSE.com
CryptoxChange.com
Bitfloor.com

etc.
etc.
etc.

And to my knowledge (to date) not one bitcoin business or business owner has been civilly or criminally prosecuted nor has a DIME of user funds been recovered.  EDIT (sorry in my hyperbole: this may not be true. I do know bitcoin some of these business have returned fiat but to my knowledge much of of the BTC value remains unavailable.)

Wake up people!!!

Bitcoin is not play money.

hmmm,
The website is pretty.

Sign up leads to a google doc form, (NOT ENCOURAGING) 

Domain name it private. (somewhat suspect)

We need more transparency in bitcoin.

Who are you.  Why should we trust you.  What do you offer that we can't already get.   Where do our bitcoin go.  How do we know we will receive the bitcoins or the fiat, etc, etc, etc.


    
Registrant:
 Domain Privacy Group
 10 Corporate Drive
 Suite 300
 Burlington, MA 01803
 US

 Domain name: BITPROCESSORS.COM


 Administrative Contact:
    Privacy Group, Domain  bitprocessors.com@domainprivacygroup.com
    10 Corporate Drive
    Suite 300
    Burlington, MA 01803
    US
    +1.6027165339
 Technical Contact:
    Privacy Group, Domain  bitprocessors.com@domainprivacygroup.com
    10 Corporate Drive
    Suite 300
    Burlington, MA 01803
    US
    +1.6027165339


 Registration Service Provider:
    Domain.com, support@domain-inc.net
    +1.8004033568
    This company may be contacted for domain login/passwords,
    DNS/Nameserver changes, and general domain support questions.


 Registrar of Record: Domain.com
 Record last updated on 18-May-2013.
 Record expires on 18-May-2014.
 Record created on 18-May-2013.

 Domain servers in listed order:
    NS2.DOMAIN.COM   
    NS1.DOMAIN.COM   


 Domain status: ok


This domain's privacy is protected by domainprivacygroup.com. To reach the domain contacts,
please go to http://www.domainprivacygroup.com and follow the instructions.


      The previous information has been obtained either directly from the registrant or a registrar of the domain name other than Network Solutions. Network Solutions, therefore, does not guarantee its accuracy or completeness.
 
        Show underlying registry data for this record



where as

https://bitpay.com/

shows

Domain Name: BITPAY.COM
Registrar: MONIKER

Registrant [3841095]:
        Tony Gallippi tony@bitpay.com
        BitPay, Inc.
        3423 PIEDMONT RD NE
        Suite 200
        Atlanta
        GA
        30305
        US


Administrative Contact [3831037]:
        Stephen Pair stephen@bitpay.com
        BitPay, Inc.
        3423 Piedmont Rd NE
        Suite 200
        Atlanta
        GA
        30075
        US
        Phone: +1.8554248729


Billing Contact [3841095]:
        Tony Gallippi tony@bitpay.com
        BitPay, Inc.
        3423 PIEDMONT RD NE
        Suite 200
        Atlanta
        GA
        30305
        US
        Phone: +1.8554248729


Technical Contact [3831037]:
        Stephen Pair stephen@bitpay.com
        BitPay, Inc.
        3423 Piedmont Rd NE
        Suite 200
        Atlanta
        GA
        30075
        US
        Phone: +1.8554248729


Domain servers in listed order:

        DORA.NS.CLOUDFLARE.COM
        HUGH.NS.CLOUDFLARE.COM

        Record created on:        2004-11-15 14:24:23.0
        Database last updated on: 2013-05-13 13:52:22.48
        Domain Expires on:        2014-11-15 14:24:23.0

would you trust that much funds on either of those exchanges??

thx puik

So while services try to enhance security for their users they can not help use how don't help themselves.

don't use and alias?

use STRONG password.

use two factor authentication (like google Authentication)

https://support.google.com/accounts/answer/1066447?hl=en

Unfortunately for some user they don't think they are vulnerable and they don't apply this added layer of security until after they are a victim of an attack.

is there a fingerprint or anymore info on this dedicated bitcoin stealing malware

I gave up trying to arb over 18 months ago because is was such a pain trying to move funds between exchanges.  However this question is asked again and again on this forum and all the time on freenode at #bitcoin-otc  so I thought I run some rough number. 

As you can see if the price continues to move in your favor you can make a profit.  But it seem to me more risky and costly than it is worth.

But again I'm curious to hear others opinions.

Just updated.

An OTP  (one time password) can be generated by Google authentication (http://en.wikipedia.org/wiki/Google_Authenticator) or could be transmitted to your mobile phone by text from the server you are trying to authenticate with.

Once you as the client enter that OTP on the server, the server should immediately invalidate that otp so that it can not be used again by you or an attacker.  With google auth a new pass code, based on time, is generate every minute and should be invalidated every minute or when use by the server.  (some servers allow a slight delay for ease of use).

However if the server you are authenticating with does NOT invalidate the OTP immediately after you enter it correctly,  an attacker with code or a keylogger on your local machine could also log in to your account with the same OTP and gain full access to your secure account.

I tested this on mount gox and an otp replay attack was possible, however they have since patched this.

01BTC10 says he tested this on blockchainwallet.info and this vulnerability does not exist there.

You can try is your self.  If you use otp on any account, long in successfully with one client then open another tab or browser and log in again with the same otp.  Then let time pass.  The longer period of time the server allows you to use the same OTP token the move vulnerable it is.

Not sure but is this related:

https://bitcointalk.org/index.php?topic=214795.0;topicseen

puik: can you comment on any known or suspected attack vectors.

Thank you.

I recently tried an experiment to document the idea of buying low on BTC-E and selling high on Mt Gox Arb opportunity.

I'm from the US.

Price on BTC-E was about 20% below Gox price when I initiated the wire.

On Monday I wired $1000 USD to OK PAY  -                          COST $30.00    Total: 30.00
On Friday OK Pay Received my wires                                     COST 12.00      Total:42.00

OKpay deposits disappeared from btc-e for about a week

The following week I sent 987.00 From OK PAY to BTC-E       COST 2.99       Total: 44.99
BTC-E charged Me 2% to deposit                                            COST 19.74     Total: 64.73


So now I have 967.26 in BTC-E (which is effectively 934.27 when you account for the 30 wire fee and 2.99 ok pay transfer fee)

I buy bitcoin at 127.878 for a 2% fee                                      Cost  19.35      Total:  84.08

Now I transfer these coins to Mt Gox.                                      Cost 1.25         Total: 85.32
Price at the time of transfer 130.03695
Waiting for 6 confirms for the coin to show up in gox.            so far the effective premium is 8.53%

An hour later I was able to sell the 8.8289
btc on Mt gox  for an avg price of 129.755                                    Cost  $6.87       Total 92.19

So I currently have  $1,138.83  cash in gox.  less the 30 wire transfer and the 2.99 ok pay fee =  $1,105.84

Time 2 weeks
profit 105.84.  or  10.58%
cost:  92.19    or   09.22%

(fyi this is not scientific and numbers are only back of the envelope calculations)  To me is seem then unless you can hold large amounts of cash and/or coin on the various exchanges it it a bit more trouble then it is work. - Then what do you risk if one of these exchanges gets shut down/hacked or disappears?

Be curious to hear anyone else's experience. 

np.  I'm selling at a premium.

thx.

I'm selling

You guys still doing this?

If you guys are going to do this here is the addy

1H2hgXiqDbHg9Lv1spHmRHRYnBfc5RBFaR

I'll be back on line in about an hour.

Sorry can't wait.

Dude I was just in San Jose.  Let me know if it does not work out.

I'll do it for .5%

cool

I could do about 500.

OP, Sorry for you loss. We've all had some experience with bitcoin loss and or fraud this and it no fun.   Unfortunately wallet security is a real challenge for bitcoiners.   An until we can get wallet security right this is going to be a very large hurdle to greater adoption.  I'm not sure about anyone else but I  get the following email several times a week.



So blockchain (as are any other high volume bitcoin businesses) is clearly target.

I think Tangible mentioned it first -  does any know that the blockchain.info OTP is really "ONE TIME."  I know when I started using gox OTP it was actually possible to reuse the OTP for up to 5 minutes after the first successful login which would renter the otp inneffectual for any virus resident on your box (GOX has since fixed the issue).