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Happy to point you to some attorneys who specialize in this area of the law. PM me or drop me a line: patrick (at) bitcoinfoundation.org.
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I want to know who is the best lawyer, to be dealing with, when it comes to bitcoins?
If you'd like a referral drop me a line: patrick (at) bitcoinfoundation.org. Give me a sense of of what you are looking for and what you are willing to spend. I could refer you to a specialist at an AMLaw 100 firm if that makes sense, but realistically you will probably be better served by a regional firm or solo-practitioner. |
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I'm happy to continue making connections for anyone in the community, just drop me a line: patrick (at) bitcoinfoundation.org.
Would it be possible to make such a list public ? Or semi-public ? I'm sure that lawyers that's already been working on bitcoin-related projects have gained experience, that also others could benefit from. Great idea, I'll ask around and see if I can publish a list on bitcoinfoundation.org. |
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Predicting FinCEN or MTB prosecutions that have a connection to bitcoin is like predicting the sun will rise in the east, you're bound to be right eventually. I've been hearing these rumors for 2+ years now. It's never been a matter of if, but when. Maybe it's soon, maybe not. I know for certain that there is action bubbling up from the States and it's not all bitcoin related. Part of the Foundation's mission is to protect bitcoin, and that's why we have taken FinCEN's guidance very seriously from the beginning. It's why I spend time interfacing with bank and financial crimes associations to educate them about bitcoin. We are ready, willing and able to work toward educating FinCEN, or if necessary to challenge FinCEN in court. As I pointed out here: https://bitcoinfoundation.org/blog/?p=152 the guidelines are clear as mud and if FinCEN tried to rely on the guidelines for a prosecution they would very likely face an APA challenge, possibly from me. In the meantime, it behooves anyone who wants to build or operate an exchange service to discuss these issues with a lawyer. I have a broad network of attorneys (from Top 100 law firms to solo-practitioners) that have experience with these issues and understand bitcoin. I'm happy to continue making connections for anyone in the community, just drop me a line: patrick (at) bitcoinfoundation.org. |
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It seems to me that using Bitcoin.org to promote certain individuals is a bad idea. This entire thread demonstrates exactly why.
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Neat project. I like the idea of creating model rules and I really like the idea of doing it in GitHub  Let me know if you want me to fork it into the Foundation's legal repo. |
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Patrick, do we also run up against the issue of people laying themselves open to sanctions if they take intermediate steps to avoid these provisions - such as purchasing something with BTC they have mined but then selling their purchases? As the original source of the BTC isn't a "serious crime" or predicate offence (which is key in relation to how FATF defines money laundering), then it's hard to argue such a strategy is money-laundering per se and yet my instinct is that taking such steps could well be an offence in its own right (especially if done repeatedly).
That sounds an awful lot like Structuring (structuring transactions), which is one technique for laundering money. One example of structuring would be attempts to avoid triggering the FinCEN reporting that kicks in at $10,000 per transaction by breaking up high value transactions and sending them in sub-$10,000 batches. Most financial institutions have algorithms and other detection techniques to catch and report this kind of behavior and it can land you in very serious trouble. As I recall, under the BSA you don't need a predicate offense to be found guilty of structuring. The act of avoiding or attempting to avoid BSA reporting is itself a crime. In your example, it's not textbook structuring (or smurfing), because you are moving value from bitcoin to goods to real money (if I'm reading this correctly). In addition you are assuming there was no predicate offense, so it would appear that there is no money laundering issue. |
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Just to clarify, is there anything in this that affects the direct exchange of bitcoins for goods and services?
No. FinCEN seems to be focusing on the exchange of virtual currency (bitcoin) for "real money". The direct exchange of bitcoin for goods and/or services was specifically excluded from FinCEN registration requirements. |
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It's probably worth pointing out that the requirement to register with US Treasury also applies to those outside the US who do business as a money transmitter in the US.
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This provision doesn't require that you act as a money transmitter on a regular basis or that you be an organised/licensed business concern. It has a lot of potential to be interpreted very broadly.
You're absolutely right, if you provide "Exchanger" services in the US you would come under FinCEN jurisdiction. Also, right that this rule could be and has been very broadly interpreted. |
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I read the "guidance" as being this type of individual would have to register with FinCEN since they would be "a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency.” (depending, as you say, on the definition of 'engaged as a business').
Why do you come to the alternative conclusion of MAY rather than MUST - is it just the uncertainty around the definition of 'engaged as a business'?
Will
Thanks Will. I said "May" rather than "Must" for a couple of reasons. 1. "Engaged as a business" is a whole can of worms that FinCEN left untouched for now. As you correctly pointed out. 2. This "Guidance" is FinCEN's way of identifying a few common facts and circumstances that they definitively view as money transmission. They don't directly say that receipt of money would place you in the category of "Exchanger" but one could easily infer that from rest of the guidelines. Therefore, I went with "may" be required to register not "must". I try to use my "musts" sparingly |
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Excerpt from prepared remarks of
Jennifer Shasky Calvery,
Director,
Financial Crimes Enforcement Network
She gave the keynote in Miami this morning for today's session of the MoneyLaundering.com's 18th annual AML conference.
Thanks for finding this, interesting follow-up. |
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Apparently anyone selling any type of virtual currency on ebay or craiglist is now a money transmitter, and as such a MSB, and as such now in violation of FinCEN interpretation if they haven't registered as an MSB.
There has to be some lawyer out there who is interested in Bitcoins and who can offer their interpretation on this matter.
Yes, me. I wrote up a quick take for the Bitcoin Foundation here: https://bitcoinfoundation.org/blog/?p=152 |
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Hi all and sorry for the wait.
I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.
Best,
Patrick Hi Patrick, please could you answer the question myself and others have asked repeatedly: What/Who has given you the legal authority to take custody of these stolen goods? As I'm sure you can tell, I really would like a clear and full answer on this. BB. I don't have custody of the funds, they are all held at MtGox. This is widely known so I'm not sure what answer I could give that would satisfy you? If you are asking me to divulge confidential information and break privilege, that is not going to happen. If you are concerned about who can exercise control over the funds, I can clearly state that I do not have any control over or access to the funds. They are frozen at MtGox pending formal procedures. Best, Patrick |
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You are correct that Zhou stated $140,000. My understanding is that the additional $40,000 includes funds frozen (rightly so) at ArumXchange. I would hope that Zhou would cooperate with authorities in apprehending and prosecuting the hacker.
Zhou has misinformed you. He has clearly stated here on multiple occasions that the $40,000 which AurumXchange has frozen is from a transaction he conducted on behalf of a friend and that those funds have nothing to do with the hacker. AurumXchange has frozen an additional $5,000 in funds which are presumed to be related to the hack and which are in an account which Zhou claims was opened without his knowledge using an email account belonging to him. I realise that your legal involvement does not extend beyond ensuring the recovered funds are secured until control of the assets is passed into receivership and liquidation, but I wanted to clarify for you why you may be asked questions about why the amount recovered is less than what was promised by Zhou. Thanks for the clarification, that is helpful. |
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Hi all and sorry for the wait.
I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.
Best,
Patrick
I thought Zhou promised the return of USD 140,000. It's good to hear that a substantial amount of funds have been recovered and that this mess can now proceed to receivership and liquidation. It's unfortunate, however, that the perpetrator of the theft is still being shielded from legal consequence. You are correct that Zhou stated $140,000. My understanding is that the additional $40,000 includes funds frozen (rightly so) at ArumXchange. I would hope that Zhou would cooperate with authorities in apprehending and prosecuting the hacker. |
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Hi all and sorry for the wait.
I can confirm that as of last night all the funds Zhou promised to retrieve (approx. $100,000 USD and 20,000 BTC) have been returned to Bitcoinica, LP's MtGox account. The receivership and liquidation process is underway and I'll post updates here as things move forward.
Best,
Patrick
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Hey Forums, I am Patrick Murck,
I have clients in several states, but my firm is based out of Washington, DC. The type of work I do you could hire a firm anywhere to do: it's Federal law. When something comes up that requires state law knowledge (in NY or WA, or wherever) that is contracted to someone licensed to practice there.
I cannot comment on any questions covered by Attorney-Client privilege, but if you'd like to ask me something, you can email me at patrick at engagelegal dot com.
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All,
I know you would all like more frequent updates. I am doing my best to keep people informed while also maintaining confidences and frankly finding time to post.
So it's clear, my first priority is to help get funds distributed back to claimants in a fast, fair and orderly process. Unfortunately, there are some things that need to be addressed and processes followed to make that happen. These things take time and effort, so if you feel that I'm not keeping people in the loop it's probably because I'm spending my time aggressively pursuing the objective stated above.
There will be more news to announce soon. Things are happening and getting resolved. I'm sure everyone here can appreciate that this is a complex matter and it's not going to happen overnight.
Additionally, so there isn't any confusion or misunderstanding. The funds that have been most recently recovered are being moved to a safer form of cold storage. I will post details of the transaction here shortly.
Thank you for your patience,
Patrick
How much do you understand about bitcoin? Are you briefed on how to store it properly? I hope you don't forget the password or something No offense to you, but if Tihan managed to screw it up by storing bitcoin in a hot wallet, then I am going to be skeptical of anybody who's holding money. I can't discuss any details for obvious, security reasons. But I do understand your concern. |
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