lulz. 

Are you a "coin shop", though?  Or are you offering unregistered securities to non-accredited investors?  FinCEN isn't the only agency in the US which those operating Bitcoin enterprises need to consider.

I'd be very careful about implying that your "coin shop" is legal given that you repeatedly describe it in terms of an investment fund. 

Given how close the target transition time is, there needs to be a lot more communication from both CoinLab and MtGox about what's happening.  You've got a hell of a lot of customers who need to agree to CoinLab's ToS before the transition date and that really needs to be happening now, not at the eleventh hour.

People are also going to have a ton of questions about the FinCEN guidance statement and how it relates to CoinLab's operations.

This transition can go very badly if MtGox and CoinLab don't constantly remind customers that it's happening and what actions customers themselves need to take.  Maybe you and Mark could take it in turns to keep customers updated because this close to showtime someone needs to be making statements pretty much every day.

While it's true that it's a "guidance" statement, such statements generally indicate how they intend to apply regulations.  The validity of their interpretation of regulations is rarely tested because most businesses can't afford the cost of the legal challenges which would be required.  Services agree to civil forfeitures or to become licensed because the potential sanctions they would face if they lost a court challenge are absolutely staggering - in the millions of dollars per offence (and a single transaction can involve multiple offences).

We've possibly seen the end of the era of under-capitalised exchanges - and that's certainly not a bad thing.  Compliance imposes a significant administrative burden, though, and that may ultimately be reflected in fees charged by exchanges.


The transaction itself may be reportable by whoever sells you the Bitcoins, though.

Jered, how will the latest guidance from FinCEN affect your plans?  While limiting participation to accredited investors overcomes risks associated with offering unregulated securities, the FinCEN guidance statement makes pretty clear that Bitcoin exchanges operating within the US will be regarded as both exchangers and money transmitters and subject to the regulatory requirements which apply to those types of financial services providers.  This obviously imposes a significant financial and administrative burden on any US exchange as neither licensing nor compliance are cheap.  Is Prime in a position to meet those additional burdens?

Probably not.  "Real currency equivalent" is specifically mentioned and that would almost certainly apply to MtGox codes.

Selling someone the private keys would almost certainly be regarded as "transmission" as that recipient then has effective ownership of the "units of convertible currency".

In some places, once you trade a certain volume of precious metals you're subject to AML/CFT regulations and need to register and report just like you'd need to if you were providing a financial services.

This news from FinSEC is less about virtual currencies and Bitcoin than it is about the services which have grown up around them.  It makes abundantly clear that those services will be subject to regulation - which people were pretty much expecting would be the case.  It just pre-empts the possibility of another PayPal style legal battle where a particular service argues that it's non subject to financial services regulations and AML/CFT requirements.

Bitcoin is covered under (c), quoted in the OP.  Other virtual currencies do meet the criteria for having an administrator.  Don't confuse the two.

A couple of questions.  You're talking about offering a "product" to "accredited investors".  Does this mean you're adopting the stance that Bitcoin is a security?

Also, it might be worth outlining here the process customers will need to go through to verify that they meet the "accredited investor" criteria.

As USD MtGox codes can't be generated after April, will you be accepting MtGox codes for other currencies as long as their value is over USD 5,000?

They're wholesaling chips.  How on earth can they control how much hashing power an end user acquires?  Even if individual vendors limit the amount of hashing power they'll sell to a customer, people can order from multiple vendors and they can acquire additional units on the secondary market. 

Wasn't Satoshi's account disabled after the CosbyCoin incident?

Why should this forum get involved in a BTCJam issue?  Have people even taken it up with BTCJam?

Evidence that Bitcoin is now being regarded as a currency by anyone who has the power to regulate currencies.

Likewise, burying one's head in the sand and saying "I can't hear you" leaves Bitcoin businesses vulnerable to regulatory action.  Businesses who do not recognise and plan for this have only themselves to blame.  If they choice to ignore risks they know exist, then both the businesses themselves and their customers need to accept the possible consequences.  Bitcoin businesses in general have neither the enormous resources of an e-Bay backing them in their legal battles (which PayPal actually lost), nor can they afford to simply write off seizures as a "cost of doing business" like organised crime.

People do not have to believe the government is good in order to want to avoid the consequences of breaking its laws.  Nor does anyone have the right to demand that someone else take the risks involved with setting up unregulated services.  Lead by example if you believe so strongly that someone should take those risks out of pure altruism.  Go open an underground exchange on an onion site accessible only by Tor and let us know how it turns out.

How many people associated with GLBSE also have positive OTC ratings?

Some of Bitcoin's funniest moments have come from shonky operators arguing with each other.

Luke's blog posts aren't official updates.  Josh still needs to explain to customers what the fuck is going on, but I strongly suspect that update won't come before next week now.

And seriously, the order management system still isn't up and running properly - what the hell does Jody get paid for?  Yeah, ASICs are complicated, yada, yada, yada.  That in no way excuses or explains BFL's ongoing inability to get their customer management software working properly - that should have happened long before shipping time got close and the repeated delays in shipping have given them plenty of extra time to sort it out. 

There doesn't seem to be a whole lot to "celebrate" about Jody's one year anniversary at BFL given that customer service is still a clusterfuck and they still haven't shipped their new product line.

Bitcoindrama is already registered - perhaps we should send it there.  BTCJam should probably be renamed BTCesspit, though.

I honestly think that everything associated with the transition to CoinLab needs to be getting a lot more publicity at this point, otherwise it's going to turn into a clusterfuck.  It sounds like US customers will need to redeem their other currency codes prior to 10 April. 

There also needs to be an active drive to get people to agree to CoinLab's ToS before 29 March, otherwise there are going to be endless "WTF is going on" threads when the transition happens and people who haven't visited the forums/used MtGox in a while suddenly find out everything's changed.

As you said, if this is genuine, the last thing he's going to be worrying about right now is paying back existing loans.  If it's a con, then the last thing he's going to be worrying about right now is paying back existing loans.

People really need to stop lending through BTCJam because they have no meaningful recourse.  People also need to realise that they have limited recourse in general when making loans to complete strangers and that in the vast majority of cases there's no cost-effective way to recover the debt.  You might as well lend the money to some guy you meet in a bar - at least there's a chance you'll see him again.

Yeah, the OP's story is a bit iffy but this isn't really a community which encourages the sharing of personal problems so it's not entirely unsurprising that there was never any lead up mention of his son having tests or any mention of the specific treatment plan (people in crisis often gush out this information because they're so overwhelmed).

Setting deadlines isn't especially helpful unless you have an effective form of recourse open to you.  Those who lent through BTCJam already know that it's against their ToS to contact defaulters directly (something I think is ridiculous given that BTCJam has no effective recovery mechanisms, which is what encourages the high default rate in the first place).

It's worth remembering that if people are seeking unconventional loans, it's often because they can't raise funds any other way - and there's often a good reason why friends, family and conventional financial institutions won't lend to them.

Yeah, maybe Josh needs to start cancelling the orders of those who try to incite others to cancel so that their own orders advance in the queue.  Not that opentoe needs to worry - his friends are building their own ASICs. 

https://forums.butterflylabs.com/jalapeno-single-sc-support/1095-i-just-orderd-my-single-sc.html#post17440