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juan is here pushing his compliance racket barrow incessantly now ...
... these posts are really not much better than those Ponzi ads pirate@40 was running in the "Projects" section, the racket is less transparent and definitely more sophisticated though I suppose.
That's one way to see it, marcus_of_augustus, but not at all what I really mean. All I'm trying to do is make crypto-currencies viable in my lifetime, at least. There are dozens of self-appointed compliance consultants with inexistent credentials actually selling what I offer for free in my blog. I choose to give it out for free. For years and completely pro bono, I've been advising start-ups and businesses (here is the list of unpaid gigs I've done over the past 9 years: https://juanllanos.backpackit.com/pub/1499894-juan-llanos-aml-compliance-and-risk-management-credentials )on how to navigate the inexorable regulatory minefield that the U.S. society, through its republican institutions, has imposed upon itself. Many companies are unable to launch their products because they have been ill-advised, even by very expensive lawyers who, being paid by the unit of time, have the incentive to procrastinate rather than provide solutions fast; or are ignoring the free advise I'm providing. Had it been read with comprehension, my very first bitcoin post of April 14, 2013 http://contrariancompliance.com/2013/04/14/is-us-regulation-the-single-biggest-threat-to-bitcoin/, would have given a company an edge, and they might be in the market by now, at least in some jurisdictions. Some consultants charge $25,000 for a less comprehensive Virtual Currencies Compliance Program than this one: http://www.slideshare.net/juanbllanos/2013-0814-new-york-presentation-vccc. You choose what food to eat, marcus_of_augustus. For your own good, I hope you make the right choices. |
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Individuals are today selling bitcoins by accepting cash deposits (e.g., using Bitcoin-Brokers.org) through their bank account. Some of them might be considered money transmitters by FinCEN, I suppose. Will banks need to scrutinize every account that sees a cash deposit to try to figure out if the transaction was for a digital currency trade? Unfortunately, the answer to your question, Stephen, is probably yes. I think the government will let Bitcoin be only when all the potential use cases for money laundering have been covered, which may mean an incredibly invasive level of control of each public key and even wallet. |
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First of all, Bitcoin has been surviving without compliance. The question is can it keep growing without compliance? - probably not much more than what we've got today.
Another question: is government-issued cash compliant? Much less than even today's bitcoin. With Bitcoin, there is at least a trace in the blockchain. With cash, not so much - and yet, cash is surviving.
Excellent point, niko. That's one of the main arguments we plan to use to defend virtual currencies at the Bitcoin foundation. |
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This is a great article. Very interesting stuff. I'm a compliance officer at a broker/dealer and deal with all sorts of AML issues on the B/D and Advisory side. The first thing I thought of when I discovered this were the compliance issues that businesses and individuals would encounter. At the end of the day we need strong policies and procedures to make sure FINCEN and the govt will adopt the industry.
Thanks for the kind feedback, CoinChex! |
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... I can't think of an scenario where this would happen since anyone can send bitcoins to anyone anywhere in the world directly without going through a third party.
That was precisely the concern or lack of understanding on my part that prompted me to write the article. Others have said it's a non-issue ( http://www.reddit.com/r/Bitcoin/comments/1itiz3/the_hidden_rule_that_could_kill_bitcoins/) because the technical solutions are trivial. My goal was to raise awareness of the issue, and also understand how the problem was going to be solved technically. I now understand. Thanks, odolvlobo! |
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He is wrong. He assumes that the money transmitting rules apply to all transactions, but he has neglected this paragraph: A user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN’s regulations. Such activity, in and of itself, does not fit within the definition of “money transmission services” and therefore is not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs.
I would recommend you read the article again, odolvobo. I don't think you understood my point(s). Yes, I did misunderstand you. However, I have some questions. Regulation E applies to the Remittance Transfer Rule, which regulates how money transmitters can send money (in this case Bitcoins, I suppose) from customers in the U.S. to customers outside of the U.S. In what scenarios do you see this applying? The only case I can think of is international currency exchanges. As long as virtual currency exchangers and operators are considered financial institutions by the U.S. government, it will apply to any product servicing U.S. consumers from the U.S. Not sure if it will apply to foreign companies servicing U.S. customers anywhere in the world. I will research that. Here's a of the rule: http://files.consumerfinance.gov/f/201305_cfpb_remittance-transfer-rule_summary.pdf |
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Is this article trying to say the irrevocabiliy problem is only for the money transmitters, or the users of bitcoin as well?
I never knew that if I use a currency exchange that I could go back and reverse the transaction within 30 minutes, nor do I understand how my transaction is delayed.
To clarify, I'm NOT talking about USERS. This is all about the duties that all financial institutions in the US have with respect to their consumers of financial products and services. Then use a better title. The rules can't kill irrevocability of the network, that is simply impossible. A title like "Hidden Rules present unique challenges for virtual currency exchangers" would likely have gotten more responses dealing with the actual topic. You're probably right, TangibleCryptography. I appreciate the feedback! |
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He is wrong. He assumes that the money transmitting rules apply to all transactions, but he has neglected this paragraph: A user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN’s regulations. Such activity, in and of itself, does not fit within the definition of “money transmission services” and therefore is not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs.
I would recommend you read the article again, odolvobo. I don't think you understood my point(s). |
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I looked at this piece when it was first posted, noted the counterfactual structure of the lead-in and the narrow US focus and I decided not to bother assessing his individual arguments, figuring that others here would do that hard work for me.  His lead-in goes "If federal anti-money laundering rules ‘killed’ Bitcoin’s anonymity, could consumer protection rules ‘kill’ its irrevocability?" which for me is equivalent to asking "if the moon is made of green cheese then might blah blah be true?" He might well be onto something important, but I'll tune out unless I see something expressed more convincingly. Thanks, aigeezer, for giving me the benefit of the doubt and for your interest. I shouldn't say it myself, but yes, I am onto something important -a new set of federal rules for consumer protection that will become effective in the US next October. Financial institutions (including all virtual currency exchangers) MUST implement Regulation E, which involves the 'design' challenges I explain in my article. |
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