Could be smart to really push the fact that credit/debit cards were never meant for use on the internet. Internet didn't even exist when cards were first envisioned and created, whereas Bitcoin is built from the ground up to handle payments over the internet.
Also, in order to accept payments by cards, merchants need to register+pay fees+++. To accept payments in bitcoin, all you need is a private key (i.e. a number with some specific properties).
This. This. This and This. Know your audience. Those in the audience won't care about ending the Fed, the conspiracy of monetary inflation, the abuse of banks, anything about fractional reserve, or the benefits of anarchy and the power of Bitcoin to defund the state. Know your audience. Anyone who has accepted credit cards only and lost money to either identify fraud or so called "friendly fraud" will care about how CC & Internet don't work well together. IIRC something like 90% of all credit card fraud involves "card not present" transactions. It was never designed for that any everything in the past twenty years to reduce/control it has been a bandaid at best. Painting a picture for the audience about how Bitcoin is better for the merchant 1) no chargebacks --- ever 2) no need for a processors however processors (bitpay) can exist because many merchants want a turnkey solution 3) low/negigible fees (don't say "free") 4) open network, anyone can participate, build value added services, etc. 5) merchants can eliminate the cost and expensive of trying to identify their customers to stop payment fraud. 6) merchants can accepted orders from Somolia with no more risk than New York (use name of city where conference is located). 7) merchants don't need to hold on to cardholder information and thus there is less liability to the merchant (identity theft lawsuit) in the event of a breach of the merchant's servers. |
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Self moderation note:
I shouldn't have included the reference to Thailand in my update so the reference has been removed. We aren't launching today, and we will review with counsel our blocked list prior to launch. The list will also be updated as conditions change. I deleted a lot of posts, nobody is at fault, I opened that door with a hasty reference (not including in the original draft). At this point I am closing that foolishly opened door in an attempt to keep this thread on topic. The merits (or lack thereof) of the reported legality of Bitcoins in Thailand are considered off topic and should be discussed in other threads.
Thank You
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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. |
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The article is interesting but you did yourself a disservice by using an inflammatory title. It likely means 99% of replies will focus on that. If Reg E is implemented as you describe it will create some challenges but those are managable, and actually are relatively mild compared to the regulatory burden imposed as a result on MT classification by FinCEN.
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Due to the regulatory environment in certain locales, the new operating entities will require clients to verify the address of their residence before selling Bitcoins. How you deal with this in a frictionless manner is a pretty important question. Frictionless is likely impossible, regulators have shut that door. However it has been our goal to make it as "low friction" as possible as we have worked hard to make it as easy as possible. We will allow multiple methods to verify their address. These include linking a verified PayPal account, linking a verified Dwolla account, providing credit card details to perform AVS (won't be charged), and for those who wish to use any online digital method we will offer a mailed verification postcard at no cost. While we would prefer to service all clients and avoid verification we have worked hard to ensure that users will find an option they are comfortable with. But this means that people from outside the US (with the exception of [blocked locales]) will be able to sell Bitcoins to FC4B? Yes international clients (other than in restricted locations) will be able to sell Bitcoins. The payment options available will depend on the country of residence. In addition we will also be unable to trade with residents of countries that the US has imposed trade sanctions. We are working with counsel to finalize our requirements but likely if your country is on one of these lists you may be blocked: http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx We are also obligated to perform OFAC & SDN checks so individuals and companies which are on those lists will be blocked. Generally speaking this should not be an issue for the overwhelming majority of users but I include it in full disclosure. |
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Will people in these [restricted] locations also be barred from buying bitcoins?
Yes. We will actively block transactions (purchases or sales of Bitcoins) with residents of restricted locations. |
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Update 08/01/2013
It has been more than thirty days since we provided a response to the Commonwealth of Virginia with corrections to errors made by the commission and the legal analysis on why our activity falls outside the scope scope of "transmission" set by Virginia statute. As of today, we have not received an official response confirming or refuting our conclusions. The lack of a response make it impossible to resume operations within the state in a prudent manner. Doing so would put the company's assets and shareholder's equity at risk to potential fines and civil action.
The company has considered forcing the issue by suing the commission. This response is unattractive as it would mean halting business for months if not years and expending a significant amount of capital to reach a resolution. Even if successful it be a hollow victory, if unsuccessful it would mean the same loss of time and capital but with the need for licensure confirmed by the court. Another response at this time would be to obtain a Virginia Money Transmitter license. This is complicated by the fact that the state's position as laid out in the notice is flawed and contains material inaccuracies. Seeking a license without a clarification from the state would be a de facto acceptance of that flawed notice. This would hamper the company's future operation and open it up to legal liabilities with other states. The pending license would be used as acceptance of the need for licensure. Another consequence of seeking a license on flawed ground is that it would create a precedent which would surely be used against other Bitcoin related companies creating a chilling effect on the growth of Bitcoin in general. This means without a clearer notice from the State and correction of the errors we can not in good faith seek a license at this time.
The lack of clarification from regulators in Virginia, has forced management to relocate the company outside the jurisdiction of those regulators. We recognized this as a possible outcome when preparing a response to the notice two months ago. A contingency plan was put in motion to prepare for a reorganization of the enterprise, so that the entities engaged in buying Bitcoins are located outside of the state of Virginia. We have done this by forming two new wholly owned subsidiaries of Tangible Cryptography, LLC. Those subsidiaries are North American Cryptographics, LLC, a South Carolina Limited Liability Company, and North American Cryptographics, Inc, a British Columbia Corporation. Tangible Cryptography as the sole owner of these entities has transferred assets to these subsidiaries in exchange for equity. Going forward it is these subsidiaries which will interact with clients looking to sell Bitcoins. As it it is no longer engaged in regulated activity, Tangible Cryptography has filed to terminate its MSB registration. The operating agreement of Tangible Cryptography, LLC has been updated to limit the scope of operating to exclude activity which could result in the company being classified as a money service business and this change approved by shareholders.
We have also taken the extraordinary step of relocating all servers, workstations, and backups to datacenters in British Columbia, Canada. Employees of NAC, LLC (and NAC, Inc) will work remotely by connecting to their company workstations located in British Columbia. Any computing resources used by employes locally will be solely as dumb terminal for remote connectivity to company assets located remotely. All company software, databases, and other intellectual property for both production and development, will remain exclusively in British Columbia. Likewise all bank accounts, official offices, phone lines, and mailing addresses for the subsidiaries are in South Carolina and British Columbia. This is done as a precaution to prevent Virginia or any other jurisdiction from claiming that the company operates locally and thus creates a nexus under local law. While this sort of structure requires employees to have continual connectivity with their remotely located company workstations, the near ubiquitous availability of 4G wireless and other forms of broadband connectivity make this less of an issue. The use of Virtual Private Networks and workstation virtualization allow this remote access to be accomplished in a secure, private, and cost effective manner.
This advantage of having employees work remotely from home allows the operating subsidiaries to hire employees in most locales without creating an additional nexus and that another regulatory hurdle. This is due to the arrangement between employee and employer as being one of a remote telecommuting employee working for a foreign employer located outside of the jurisdiction. We have been advised by counsel that offering employment to potential employees in most locations will not present an issue. There are some states where this will not be possible due to uncertainty on the treatment of telecommuting workers (another new legal frontier), or the cost of employer compliance but it but in general this should greatly expand our ability to recruit and retain talent. It is our intention to hire additional operational staff and software developers shortly after launching.
This structure has ramifications beyond our enterprise. The continual advancement of technology is allowing the rise of "virtual companies" who can route around the damaged parts of the financial and political systems of the world. This can be accomplished by using decentralized labor and assets, along with choice of jurisdiction to define the presence of the operating entity rather than have the physical location of the entity define the jurisdiction. While this has been possible to a certain extent for some time, technology is allowing this to happen on a level not seen before. We have chosen to still incorporate and thus accept the authority of the state rather than try an operate as virtual entity without incorporation in any jurisdiction. Operating without incorporation is the route taken by some enterprises and it may be viable for ones which can operate without the need of any physical presence. For some types of economic activity, including ours, this is simply not possible. The opening of a bank and other financial accounts requires an identity of some sort and that either requires a natural person or an artificial legal person. Using a natural person breaks the limited liability and organizational advantages of artificial entities like corporations and limited liability companies. It is not possible to create a corporation or limited liability company without the approval of some state as these constructs exist solely as the product of the law of the jurisdiction they are created (incorporated) in. Barring either a recognized legal construct or natural person in most jurisdictions to open financial and other types of accounts. So while the use of incorporation does tether a virtual entity to one or more jurisdictions, the use of technology allows decentralization of presence, assets, and labor at a level not available until recently.
It has been a complex and extensive reorganization made necessary by overzealous regulators, that we neither wanted nor sought. The end result however is companies which will emerge, better positioned to provide unmatched service to our valued clients. I would take the time to again point out that no client or creditor of our company has ever lost funds in dealing with our company, a claim which can not be made by very many Bitcoin related enterprises. Even in times of high volatility we have no canceled transactions due to "high risk" or other stated reasons, we have always honored a contracted price even if it means a short term loss for the company. During this regulatory issue, we have honored all amounts owed to clients and creditors. Moving forward we feel this reorganization will allow us to remain the gold standard for transparency, security, and customer support.
Due to the regulatory environment in certain locales, the new operating entities will require clients to verify the address of their residence before selling Bitcoins. This will ensure we can block clients in locales where regulators have declaration that such activity requires a license, or such activity violates local law. Initially clients who are residents of the states of Virginia, California, and New York, as well as residents of other states or countries which prohibit or license Bitcoin sales, will be blocked from selling Bitcoins. Our decision to block clients in certain jurisdictions was not taken lightly and should not be seen as agreement with the claims of the applicable local regulators. It is merely a prudent step to isolate these "high risk" jurisdictions, so we can continue to serve the most clients possible with the least amount of burdensome governmental interference. The list of blocked locales will be updated as necessary based on communication with regulators and legal counsel. We will have multiple methods available for prospective clients to verify their residence, including methods which provide instantaneous verification. In addition, prior clients of Tangible Cryptography who received physical delivery (mailed check or bullion) will have an option to have the option to have their account information transferred the new operating subsidiary and become pre verified. It is possible that at some point in the future, one or more of these subsidiaries will look to obtain licensing in order to resume operations in blocked locales however residents of blocked locales should consider that even if successful such licensing will take months if not years and we we will be unable to provide service to them for the intermediate future.
At this time we do not have a date for the launch of new services as there are some lingering bureaucratic details to finalize. The companies have the necessary financial resources to operate for an extended period of time even without any cashflow and we are committed to resuming operations in the future. The "silence" from the company is simply due to a lack of official or meaningful news. Simply put we aren't "going away". I want to express to our valued clients that we do read all received email but due to the volume of email we receive we are not been able to respond to all inquiries. I would ask our prior and future prospective clients to trust us. Everyone in the company, employees and investors alike are just as frustrated as you, about the painfully slow progress, which has been mostly out of our hands. Remember we are dealing with issues which move at the speed of government. This doesn't mean our developers have been idle. We have been hard at work behind the scenes building a next generation sales portal which improves upon fastcash4bitcoin is every respect, and it should be worth the wait.
A launch date will be provided when we are comfortable with the timeline for going live. We are from a development standpoint, ready for launch however we are blocked by some bureaucratic issues. It is ironic given the virtual nature of our business the current delays literally involves a missing piece of paper, an EIN letter, which prevents finalizing the setup of bank accounts for our domestic subsidiary. No I couldn't make this stuff up if I tried. All of us at Tangible Cryptography are excited to complete this reorganization, and look forward to getting back to serving the bitcoin community again. While the corporate structure may be changing you can continue to expect the same great service from the same dedicated professionals which made us "the choice" for no-nonsense Bitcoin sales.
Thank You,
Gerald Davis
Director & Chairman
Tangible Cryptography, LLC
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1F8hkAcivgkdQ8PQmugdfPggMz8JH44yhW
Sorry I wasn't clear. Someone can help you sign a statement proving ownership but the way to do it depends on the WALLET. Which client/wallet are you using for that address (Bitcoin QT, Armory, blockchain.info, etc). |
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If anyone knows how to do this, I'd be happy to
Which wallet is the address where you dividends are paid to. |
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any new updates? looking forward to keep working with you guys
Some delays in getting bank account setup for our subsidiaries. We will provide an announcement when we are ready to launch or new service. |
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No new news??  I wish you guy's the best of luck,really missing your service  We are in contact with the state regulators but have not received an official response at this time. I hope our clients understand that while you may not hear much from us, that is intentional on advice of counsel. We haven't been idle though but most of the work we are doing is behind the scenes, researching and preparing a contingency plan in the event that we are unable to operate in Virginia. Tentatively we are looking at resuming services within the next two weeks for some clients in some states. Understand that timeline isn't in stone and is contingent on completing bank/service setup, as any future services will be provided by a wholly owned subsidiary not TC, LLC. The bad news is that instead of treating all US residents as a single class we will be limiting services based on the state of residency. At a minimum services will not be available to residents of VA (unless resolution is reached), CA and NY. The list of restricted states may (and likely will) be expanded based on responses we receive from regulators. On a positive note our communications with Canadian regulators has been very positive, and we will be adding support for Canadian residents with low cost Canadian specific payment methods as quickly as possible. There are some difficulties in opening the required Canadian bank accounts, namely a very long flight from VA to BC and I want to make sure we have a solid understanding with the Canadian bank before jumping on a plane (really not looking forward to it and don't want to do it more than necessary). |
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Equally good luck running any bitcoin services in the lightnet. We can all see how little luck and sliding down slippery slopes to oblivion that system has, on a monthly, if not weekly basis.
Of course just use first international darknet bank (with global ACH and wire service). Why didn't I think of that? |
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Gift cards are not an exchange of currency.
Gift Cards = Stored Value Cards and therefore are regulated by FinCEN "(3) Issuer of traveler's checks, money orders, or stored value. An issuer of traveler's checks, money orders, or, stored value (other than a person who does not issue such checks or money orders or stored value in an amount greater than $1,000 in currency or monetary or other instruments to any person on any day in one or more transactions). " That puts them under FinCEN, but classified as a Money Exchanger ? Money Services Business - The term "money services business" includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities: (1) Currency dealer or exchanger. (2) Check casher. (3) Issuer of traveler's checks, money orders or stored value. (4) Seller or redeemer of traveler's checks, money orders or stored value. (5) Money transmitter. (6) U.S. Postal Service. As I read that, bitcoin falls under 1 and not 3/4 So it is still under MSB regulations but not all those defiinitions are necessarily the same rules, as one would expect there are different regulations for a Check casher than the U.S. Postal Service. Bitcoin does not fall under 1 it falls under 5. 1 is out because it uses the language "currency of a foreign government". 5 is FinCEN way of forcing Bitcoin (round peg) into a MT definition (square hole). It is the only thing which even comes close so FinCEN has used that. Providers and Sellers of Prepaid Access
A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies. 18
Dealers in Foreign Exchange
A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations. http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.htmlAlso you have to remember there is the federal definition and then there are state definitions of which there are fifty and no two are the same. |
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You can pay a fee (it's under settings, main, Pay transaction Fee) and then it goes much faster but if i wanted to pay banking fees i'd just use a bank.
There is no free lunch in this world. The block subsidy will continue to decline (as there is a limit on max number of Bitcoins) and fees will play an increased role in suporting the cost of running the network. Let me know when your bank allows you to wire an unlimited amount of money anywhere in the world in an hour with a cost of $0.01 or less.  |
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Any news guys ?? Hope your back online soon  Best of Luck!!!!!!!!!! I am also interested to hear the latest, if only out of professional curiosity.
We do not have a formal response from the commission at this time. It is unlikely any updates will be provided until we have a formal response either indicating that our activity does not require a license or that we must obtain a license. |
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Your first reaction. Quick click.
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OK, total newb here, but the U.S. IS the land of suit/countersuit. Couldn't Tangible Cryptography take steps to protect itself and any investors by seeking legal redress from the Commonwealth of Virginia for any loss or possible loss of income due to interference with its business on the basis of such a vague charge? Go on the offensive! Fight back! (grin)
Simple answer is no. The notice from the commonwealth only indicates we "may" be engaged unlicensed money transmission. There is only a demand to cease "if" we are engaged in activity which requires licensure. However it is prudent for us to stop at this time until we have clarity on the position of the government. At this point it is our intent to avoid an adversarial situation which likely will be costly and time consuming and instead open a dialog with the commission as Bitcoin is an emergent technology and based on the letter we believe they have some significant misunderstandings on how this technology works. |
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Doesn't criterion 4, "Seller or redeemer of traveler's checks, money orders or stored value", pretty much fit the bill? Our responses in this thread will be limited until the issue is resolved however FinCEN guidance in April 2013 clearly indicates no other category of MSB applies. It is important to understand state law and federal law don't necessarily have the same definitions even for terms with the same "name". Generally speaking the law will define a term and it has that meaning and only that meaning in the scope of that definition. As we indicated in the response at the federal level however FinCEN has provided guidance that Bitcoins are not stored value and virtual currency does not fall under the definition of "currency dealer or exchanger". FinCEN no longer uses the word "stored value" in regulations preferring instead the more inclusive "prepaid access" however some docs are still out of date so you may still see the older term. At the federal level the two terms can be considered synonymous. http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.htmlProviders and Sellers of Prepaid Access
A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies. 18
Dealers in Foreign Exchange
A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations.
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