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Bitcoin / Press / 2013-08-17 Coindesk.com - Bitcoin Law: What US businesses need to know
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on: August 17, 2013, 03:14:27 PM
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Bitcoin Law: What US businesses need to know by Marco Santori [Chairman of the Bitcoin Foundation’s Regulatory Affairs Committee] This is a basic primer on the state of US law as it applies to digital currency entrepreneurs. If the last few months have taught us anything, it is that there will soon exist a new and evolving body of law: The Law of Digital Currency, or, as some would prefer it: Bitcoin Law.
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[...] 'virtual currency' is something of a loaded term, and bitcoin may not even be best described as a currency at all.
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[In addition to regulators FinCEN and the SEC, the] consensus among legal professionals is that two more government agencies might soon have a hand in the market as well: the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB).
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Some have called [FinCEN's issuance of guidance] bitcoin’s 'watershed moment' because of its clear, unequivocal positive message: bitcoin is not illegal. The negative consequence, though, was just as obvious: Many bitcoin businesses models are illegal.
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In effect, the [Bank Secrecy Act (BSA)] deputizes financial institutions, requiring them to act as the government’s foot soldiers in its war on money laundering.
- http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know |
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25
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Bitcoin / Press / 2013-07-23 Wired.com - Why the Only Real Way to Buy Bitcoins Is on the Streets
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on: July 23, 2013, 11:32:33 AM
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Why the Only Real Way to Buy Bitcoins Is on the Streets by Robert McMillan Welcome to the quickest, most private way to buy the internet’s most successful digital currency: in-person and face-to-face.
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Buttonwood meetups started in New York a few months ago and fanned out to San Francisco and Los Angeles. Buttonwood is an allusion to the May 17, 1792 agreement, struck under a buttonwood tree at 68 Wall Street, that set down the rules for what became the New York Stock Exchange.
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After some haggling, Light types Copley’s Bitcoin address into his mobile phone and transfers just over half a Bitcoin ($50) to Copley’s digital wallet [for payment of silver bullion].
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He used to buy and sell on a (temporarily shuttered) marketplace called Bitinstant. But a few months ago, 'it started to ask for too much of my information,' the student says. Given the nature of his business, he wants to buy Bitcoins without being tracked.
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These are the kinds of deals that have regulators worried.
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It’s traditionally been tough to quickly buy Bitcoins with U.S. dollars, and recently it’s become tougher. [...] That [regulation has] led to a pretty healthy off-the-books market for Bitcoin traders. [...] Buyers and sellers can also hook up over Internet Relay Chat at #bitcoin-otc
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Buyer’s Best Friend will give you Bitcoins back for cash, much like you can get cash back from a credit card, but you are supposed to purchase something first.
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Though trading an obscure crypto currency may sound very modern, the whole transaction has a decidedly old-fashioned and human flavor to it. - http://www.wired.com/wiredenterprise/2013/07/buttonwood |
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26
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Bitcoin / Press / 2013-07-07 ArabianGazette.com - The curious case of Bitcoin
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on: July 07, 2013, 07:52:54 AM
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It's been a while since a single article has had such a high ratio of erroneous statements and uninformed opinions within. The curious case of Bitcoinby Zain Naeem, Head of equity research at Maan Securities (Pvt) Ltd in Pakistan's stock markets. This does open the opportunity to launder money, as ownership cannot be determined, but this is a bug that can be set right over time.
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There needs to be central authority which can regulate the currency and make clearing of transactions more trustworthy. Till then it seems, this fad of Bitcoin will persist until something new is developed.
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Just like the latest iPhones, the fashion of this currency will fade when something new comes along. This might see the fate of Bitcoin being relegated to a software currency used by gamers and developers for purchase of game content in the MMORPG games. - http://arabiangazette.com/curious-case-bitcoin-20130707/ |
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28
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Bitcoin / Press / 2013-07-01 Mkshft.org - Thin Wire (Hawala networks)
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on: July 02, 2013, 11:39:28 PM
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Thin Wire by Philippa Young This article doesn't mention bitcoin whatsoever, but describes an industry that is begging for the arrival of Bitcoin. Hawala, hundi, chiti, chop, and dozens of other names describe a system that moves billions of dollars across grey and black markets, faster and cheaper than your local bank."
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Before insurance and high-speed travel, moving large amounts of bullion by sea or camel-led caravan was not only slow but also incredibly risky. The answer? Never move the money.
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In its infancy, hawala created a safe and smooth journey for long-distance merchants, facilitating the first movements of globalized trade. Fast-forward a few hundred years, and hawala has a less celebrated reputation.
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For families in developing countries supported by diaspora relatives, hawala is a lifeline.
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Hawala is recordless. With just a name and telephone number, you can transfer thousands of dollars across continents.
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Just one month from now, First Somali Bank will launch a system to allow diaspora communities of Minnesota and London to send remittances from their mobile phones directly to a recipient’s debit card in Somalia— signs of attempts to formalize hawala’s informal success.
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The system differs from neighboring Kenya’s M-PESA system in that the money goes directly into the recipient’s bank account. Each person becomes his or her own hawaladar.
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If money makes the world go round, then hawala is the undervalued engine coughing out a cloak of grey-black smoke.
- http://mkshft.org/2013/07/thin-wire |
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29
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Bitcoin / Press / 2013-07-02 BitcoinFoundation.org - Response to CA DFI Warning Letter
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on: July 02, 2013, 08:43:15 PM
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From Bitcoin Foundation's legal representative: The Bitcoin Foundation does not engage in any of these regulated activities. Furthermore, even if it did engage in these activities, it does not have any business operations in California that would subject it to the Department of Financial Institution's ("DFI") jurisdiction.
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The Bitcoin Foundation does not have business operations in California that would subject it to the DFI's jurisdiction. [...] The Bitcoin Foundation provides no direct money services to any California consumers.
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The Bitcoin Foundation is not in the business of selling bitcoin to consumers and does not otherwise operate a bitcoin exchange.
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Bitcoins are not written or signed notes or drafts, and therefore, are not payment instruments regulated by the California Money Transmitter Act.
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There is no issuer of bitcoin that would be subject to licensure as a money transmitter under California law.
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The fact that bitcoin does not fit within the definition of payment instruments or stored value does not mean it is automatically regulated by the money transmission prong.
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The same rationale that applied to the sale of a peso should prevail under the California statute with regard to the sale of a bitcoin.
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The Bitcoin Foundation requests that your office issue an opinion that [...] the sale of a bitcoin is not regulated under the California Money Transmitter Act. Response of Bitcoin Foundation to May 30, 2013 Warning Letter - http://www.scribd.com/doc/151346841/Bitcoin-Foundation-Response-to-California-DFI |
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31
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Bitcoin / Press / 2013-06-28 TechCrunch.com - Survey: Quarter Of US Consumers Has Heard Of Bitcoin
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on: June 28, 2013, 07:07:57 PM
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Survey: Quarter Of US Consumers Has Heard Of Bitcoin — And Majority Of Them Trust It by Natasha Lomas The firm surveyed more than 22,000 U.S. consumers in May 2013 to test Bitcoin awareness and levels of trust.
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Just over a quarter (25.3%) [of U.S. consumers] have heard of the crypto currency — which means the U.S. is lagging the other two countries also surveyed for the poll, Argentina and the U.K. In those nations,
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62% of U.S. consumers who are Bitcoin-aware said they trust the currency, vs 73% of Bitcoin-aware Argentinians and 69% of Bitcoin-aware Brits.
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The largest group of Argentinian respondents (44%) said the best thing about Bitcoin is ‘not having to deal with financial institutions’. So banks bad, Bitcoin good.
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In the U.S. and the U.K. the most popular response when asked about the best thing about Bitcoin is that “it’s quick and convenient” — cited by 36% and 43% respectively.
- http://techcrunch.com/2013/06/28/bitcoin-awareness-and-trust |
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Bitcoin / Press / 2013-06-21 AmericanBanker.com - In-Person Bitcoin Exchanges Are Thriving
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on: June 21, 2013, 05:37:50 PM
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In-Person Bitcoin Exchanges Are Thriving by Jon Matonis In-person bitcoin transactions allow you to meet interesting new people in your area – and discuss bitcoin.
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For the casual traders seeking more privacy, I recommend in-person trading through LocalBitcoins.com.
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LocalBitcoins has steadily added new cities and market depth. 'We currently have 142 countries and 1700 cities,' [founder Jeremias Kangas] recently told Bitcoin Magazine, 'but that most definitely isn’t enough. We want to expand to at least 170,000 cities'.
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LocalBitcoins offers an escrow facility and a rating system both of which can be extremely valuable for the first-time trader.
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The bitcoin provider sets the price markup and types of payment that will be accepted. [...] Given the robustness of trade in some large urban areas, it is entirely possible to earn a living from buying and selling bitcoin using the LocalBitcoins matching platform.
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In the general classification of commodity, bitcoin's trade is similar to any other collectible item, such as antique diamonds, celebrity autographs, moon rocks, Buddha figurines, and baseball cards.
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Ultimately, until physical paper cash is outlawed, bitcoin will still be bought and sold in person just like any other commodity.
- http://www.americanbanker.com/bankthink/in-person-bitcoin-exchanges-are-thriving-1060061-1.html?zkPrintable=1&nopagination=1 |
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Bitcoin / Press / 2013-06-13 Techliberation.com - Mr. Bitcoin goes to Washington
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on: June 13, 2013, 11:19:41 PM
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Mr. Bitcoin goes to Washington by Jerry Brito On my panel were representatives from the Bitcoin Foundation, the Tor Project, and the DOJ, and we had a lively discussion about how these technologies can potentially be used by criminals and what these open source communities might be able to do to mitigate that risk.
[...]
I was therefore interested in the keynote remarks delivered by Jennifer Shasky Calvery, the Director of the Treasury Department’s Financial Crimes Enforcement Network. [In particular, she addressed the fact that since there have been several enforcement actions against virtual currency exchangers and providers, the traditional banking sector has been wary of doing business with companies in the virtual currency space.
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It would be a shame if [banks] felt they couldn’t do business with an innovative new kind of start-up simply because that start-up has not been (and may never be) adequately defined by a regulator.
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Hopefully FinCEN will revisit its guidance now that the conversation has begun, and as other regulators consider new rules, they will hopefully engage the Bitcoin community early in order to avoid ambiguity and uncertainty. - http://techliberation.com/2013/06/13/mr-bitcoin-goes-to-washington |
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Bitcoin / Press / 2013-06-11 QZ.com - How digital currencies democratize tax evasion
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on: June 12, 2013, 07:11:19 AM
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How digital currencies democratize tax evasion by Tim Fernholz The two tools Liberty Reserve used to evade financial scrutiny—anonymity and layering transactions through multiple companies—are already embedded in the international financial system. The difference now is merely access and scale.
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When offshore financial centers first became trendy many, many years ago, you used to have to go to the offshore location, take the money with you, and deposit it in the bank. Now [open up an offshore bank account] you don’t have to go to Guernsey or Cayman or BVI.
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The internet has shrunk the world, and Liberty Reserve and other digital currencies similarly help bring offshore banking to the masses. - http://qz.com/92842/how-digital-currencies-democratize-tax-evasion |
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36
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Bitcoin / Press / 2013-06-05 Forbes.com - The Politics of Bitcoin Mixing Services
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on: June 05, 2013, 11:47:24 PM
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The Politics of Bitcoin Mixing Services by Jon Matonis If bitcoin exchange regulation becomes so effective that exchange operators are required to link specific bitcoin addresses to individual customers, then users may have few remaining choices should they want to maintain transactional privacy. [...] Mixing services for bitcoin may emerge as the next frontier in the battle for financial privacy.
[...]
Also called bitcoin laundries, these web-based services charge bitcoin holders a nominal fee to receive different bitcoins than the ones initially transferred. The sites never handle national currencies like the dollar or euro so technically they are not exchanges.
[...]
Vitalik Buterin of Bitcoin Magazine argues that [...] the core principles of the bitcoin protocol, such as user-defined anonymity and user-defined transactional privacy, remain intact due to optional mixing services.
[...]
When it comes to bitcoin oversight, regulators and law enforcement must comprehend that which is able to be constrained versus that which is not able to be constrained. - http://www.forbes.com/sites/jonmatonis/2013/06/05/the-politics-of-bitcoin-mixing-services |
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37
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Bitcoin / Press / 2013-06-04 PaymentsSource.com - Why There Is a Demand for Liberty Reserve's Serv
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on: June 04, 2013, 04:48:21 PM
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Why There Is a Demand for Liberty Reserve's Services by Jon Matonis In a free society with a market-driven economy, payment privacy and payment finality are legitimate and useful features of a currency – physical or digital.
[...]
By default, Federal Reserve-issued physical cash comes with payment privacy and payment finality.
[...]
Once troublesome physical cash is finally eradicated, any digital currency with privacy and irreversibility attributes will be next for scheduled termination. In the case of Liberty Reserve, It's not the individual infractions committed by clients of Liberty Reserve that are worrisome to the regulators, it's the fact that a semi-reliable platform for private payments existed in the first place.
[...]
If banks and traditional financial institutions still respected basic client privacy and facilitated some form of digital payments that did not always involve harmful reversibility to the merchants, then companies like Liberty Reserve wouldn't even be necessary.
[...]
To protect themselves, merchants require payment finality or irreversible payment methods. That means using only international wires or services like Liberty Reserve.
[...]
Business sectors that benefit from payment finality include [gold bullion sales,] online casino gaming, sports betting, lotteries, adult services, pawn shops, credit repair services, debt settlement services, and virtual currency exchanges that involve the trade of other negotiable instruments or the loading of prepaid cards.
[...]
The Liberty Reserve payment system acted as an international wire service for regions of the world that were totally ignored or blockaded by SWIFT and the international banking system.
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Choice in currency is a freedom of speech issue. Failing to recognize that fact only serves to strengthen the entrenched payment oligarchies and to undermine personal liberties in the transactions environment.
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Expect to see a lot more [money exiting the digital banking system] especially since the free market has been mostly stripped of digital payment finality and 'Cyprus-ed' has become a verb." - http://www.paymentssource.com/news/why-there-is-a-demand-for-liberty-reserves-services-3014312-1.html?zkPrintable=1&nopagination=1 |
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39
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Bitcoin / Press / 2013-05-30 Guardian.co.uk - Bitcoin will continue to function beyond the reach o
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on: May 30, 2013, 07:37:20 PM
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Bitcoin will continue to function beyond the reach of government and law by James Ball The real transformative power of Bitcoin, or something like it, lies not in a speculative bubble, but in its potential to put currency outside of the control of governments, or law enforcement agencies.
[...]
"Bitcoin makes Liberty Reserve look quaint – as unlike the alleged money launderer, Bitcoin is decentralised. There's no single company or entity controlling the currency, and so it's nearly impossible to shut down.
[...]
"Where real money is exchanged into Bitcoins is still a potential weak spot for authorities – and some Bitcoin exchanges are looking to sign up with regulators.
[...]
"If Bitcoin, or a currency working in a similar way to it, got a stable value and a large user base, it could take cash flows forever out of the hands of government. Whether that's a great thing or a terrible thing depends on what you're trying to do, what you think of government and what country you're talking about.
[...]
The prosecutors of the southern district of New York are very publicly celebrating their shutting down of the Liberty Reserve operation. They should enjoy it – it may be one of their last such victories.
- http://www.guardian.co.uk/commentisfree/2013/may/30/bitcoin-beyond-reach-of-government |
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