Decentralized Currency Issuers May Still Require License

[ShelbyDev]

This is not fun stuff but hard to ignore.

For who's interested about regulation proposals in the US: this article is a bit dated (Feb 2015) but probably still relevant:

"Decentralized Currency Issuers May Still Require License - The first draft of the BitLicense stated that, “controlling, administering, or issuing a Virtual Currency” qualifies as Virtual Currency Business Activity subject to licensing. This remains unchanged in the new draft, and that’s unfortunate."
https://coincenter.org/2015/02/our-initial-thoughts-on-new-yorks-revised-bitlicense-proposal/

I'm not sure how things are going in Europe but I would guess regulation proposals will be fairly similar. From reading multiple articles it sounds like the biggest requirement to get legal will be "KYC" or Know Your Customer.

It's not a matter of "if", but "when" and if we can come up with a system that satisfies some of those requirements we can have a chance to play, otherwise it looks like much of the innovations will be pushed underground.

EDIT: here's the full text of the first New York proposed regulations: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf

Any thoughts?

[username18333]

Great Empire Coin™ (GEC) is the official currency of Great Empire of Earth, is divisible into cents and mills, and has denominations of mega-, terra-, and exacoins. Earth has a heterarchical monetary authority: anyone may “mint” coins through an official channel (e.g., Writcoin) and have these coins certified “Great Empire Coin (GEC)” by the Empire.

Great Empire of Earth > (The) United Nations > (The) United States of America > (The) State of New York

[adhitthana]

Does Satoshi need one too?

[muddafudda]

It's America, who cares?

[username18333]

It's America, who cares?

The government of New York (or [perhaps, more precisely] its lobbyists) likely does.

[muddafudda]

It's America, who cares?

The government of the State of New York (or [perhaps, more precisely] its lobbyists) likely does

Only a very small amount of people in the world reside in New York. I think it's a joke and makes the American financial system look like a bit of a joke.

[username18333]

Only a very small amount of people in the world reside in New York.

Likewise, the financial life of New York is irrelevant as well. 

[kelsey]

decentralised requiring a licience lol you do know the whole point of decentralisation?

[muddafudda]

decentralised requiring a licience lol you do know the whole point of decentralisation?

Yeah it's quite frankly a joke. Coins can be released with full anonymity.

[ShelbyDev]

Yeah it's quite frankly a joke. Coins can be released with full anonymity.

I agree with all of this and indeed coins can run anonymously... just wondering the effect on alt coin developments once licensing becomes a requirement to stay on the legal side of the law.

One of the issues that keeps coming up is the "KYC" aspect to prevent money laundering (is the governments argument). But I guess once you know your customer, there's no more anonymity.

Is there a balance possible?

[username18333]

Coins can be released with full anonymity.

And are likely to achieve ubiquity therefor.  

[tokeweed]

This is not fun stuff but hard to ignore.

For who's interested about regulation proposals in the US: this article is a bit dated (Feb 2015) but probably still relevant:

"Decentralized Currency Issuers May Still Require License - The first draft of the BitLicense stated that, “controlling, administering, or issuing a Virtual Currency” qualifies as Virtual Currency Business Activity subject to licensing. This remains unchanged in the new draft, and that’s unfortunate."
https://coincenter.org/2015/02/our-initial-thoughts-on-new-yorks-revised-bitlicense-proposal/

I'm not sure how things are going in Europe but I would guess regulation proposals will be fairly similar. From reading multiple articles it sounds like the biggest requirement to get legal will be "KYC" or Know Your Customer.

It's not a matter of "if", but "when" and if we can come up with a system that satisfies some of those requirements we can have a chance to play, otherwise it looks like much of the innovations will be pushed underground.

EDIT: here's the full text of the first New York proposed regulations: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf

Any thoughts?

But what about POW coins.. There was no issuer, the coines were mined.

[username18333]

But what about POW coins.. There was no issuer, the coines were mined.

A miner of a cryptographic currency, upon transferring ownership of the "mined" currency, would, presumably, be considered (at least, under the law being discussed) a "distributor" of the currency.

[tokeweed]

But what about POW coins.. There was no issuer, the coines were mined.

A miner of a cryptographic currency, upon transferring ownership of the "mined" currency, would, presumably, be considered (at least, under the law being discussed) a "distributor" of the currency.

There has to be a legal loophole there.

[BSdetector]

Poster of this topic totally clueless.

[sdmathis]

Yeah it's quite frankly a joke. Coins can be released with full anonymity.

I agree with all of this and indeed coins can run anonymously... just wondering the effect on alt coin developments once licensing becomes a requirement to stay on the legal side of the law.

One of the issues that keeps coming up is the "KYC" aspect to prevent money laundering (is the governments argument). But I guess once you know your customer, there's no more anonymity.

Is there a balance possible?

That's the whole purpose of "KYC" laws, to eliminate anonymity. The U.S., EU, China, Russia, and others will eventually try to eliminate anonymous coins through regulation making them useless in most of the developed world.

[MicroGuy]

I think regulation will be limited to the more easily definable targets such as merchants and exchanges. However, the current (and proposed) regulation is itself a stifling blow as it creates another barrier to entry for new businesses, and makes obtaining cryptocurrency more difficult.

The fundamental flaw at this point is people lack the incentive to buy crypto so they can then go out and buy something they could have already bought with the debit card in their pocket. What is the point in taking that extra step?

Regulation just means businesses are less likely to accept cryptocurrencies, and consumers have one more reason not to take that extra and "unnecessary" step of exchanging their fiat.

[ShelbyDev]

That's the whole purpose of "KYC" laws, to eliminate anonymity. The U.S., EU, China, Russia, and others will eventually try to eliminate anonymous coins through regulation making them useless in most of the developed world.

That's indeed the intention of those regulations. Will crypto coins continue to exist without anonymity? I would think so, although it's unclear in the long term how that will affect the evolution of alt coins.

[username18333]

The fundamental flaw at this point is people lack the incentive to buy crypto so they can then go out and buy something they could have already bought with the debit card in their pocket. What is the point in taking that extra step?

Code:

sendfreetransactions=1

Code:

sendtoaddress [address] [balance + amount]

Your “poor” could appropriate a greater portion of the (monetary) value of the GEC economy to themselves.

[ShelbyDev]

I think regulation will be limited to the more easily definable targets such as merchants and exchanges. However, the current (and proposed) regulation is itself a stifling blow as it creates another barrier to entry for new businesses, and makes obtaining cryptocurrency more difficult.

The fundamental flaw at this point is people lack the incentive to buy crypto so they can then go out and buy something they could have already bought with the debit card in their pocket. What is the point in taking that extra step?

Regulation just means businesses are less likely to accept cryptocurrencies, and consumers have one more reason not to take that extra and "unnecessary" step of exchanging their fiat.

Some interesting arguments and I thought about it for a while and I agree that the comparison of buying power of alt coins vs debit/credit cards lacks incentives for the every day user. Some advantages I can thinks of (feel free to add to the list) are:

• Low transaction cost
• International transactions
• Fast transactions
• Low entry threshold (no money/paperwork needed to setup an account)

[username18333]

Some interesting arguments and I thought about it for a while and I agree that the comparison of buying power of alt coins vs debit/credit cards lacks incentives for the every day user. Some advantages I can thinks of (feel free to add to the list) are:

• Low transaction cost
• International transactions
• Fast transactions
• Low entry threshold (no money/paperwork needed to setup an account)

1. Exchange fees.

2. Exchange fees × 2.

3. 30 min. for 3 confirmations.

4. KYC at exchanges.

[ShelbyDev]

Yes, once alt coins are converted to fiat, there are expenses, loss of privacy. But regular coin transactions have the benefits of the first column.

I see we'll need to split this up in 2 sections:

Coin transactions (no exchange to dollars)	Fiat Exchange (exchange to dollars, euro, etc...)
Low transaction cost International transactions Fast transactions Low entry threshold (no money/paperwork needed to setup an account)	1. Exchange fees. 2. Exchange fees × 2. 3. 30 min. for 3 confirmations. 4. KYC at exchanges.

[Zer0Sum]

Yeah it's quite frankly a joke. Coins can be released with full anonymity.

I agree with all of this and indeed coins can run anonymously... just wondering the effect on alt coin developments once licensing becomes a requirement to stay on the legal side of the law.

One of the issues that keeps coming up is the "KYC" aspect to prevent money laundering (is the governments argument). But I guess once you know your customer, there's no more anonymity.

Is there a balance possible?

That's the whole purpose of "KYC" laws, to eliminate anonymity. The U.S., EU, China, Russia, and others will eventually try to eliminate anonymous coins through regulation making them useless in most of the developed world.

Encryption is already illegal in Russia, China, Israel, etc (see link)...
Meaning your standard, corporate encrypted laptop may be confiscated...
But in Eastern Europe, for example, a small bribe... and you're on your way.

In corrupt kleptocracies everything is illegal... and nothing is illegal. It depends.

An enormous amount of crypto originates in China (big exchanges, ASICs) and Russia (NXT)...
And anon coin networks will always be welcome in the "underground economies" of lawless countries...
Because many of these countries are enemies of America... and will be happy to subvert the US economy.

The big problem with anon coins is amateur cryptography and backdoors... not lack of host countries.

http://www.princeton.edu/itsecurity/encryption/encryption-and-internatio/

[username18333]

Encryption is already illegal in Russia, China, Israel, etc (see link)...
Meaning your standard, corporate encrypted laptop may be confiscated...
But in Eastern Europe, for example, a small bribe... and you're on your way.

You conflate law and law enforcement. Tyranny demands the latter more than it does the former.

[not altcoin hitler]

Living in the USA must suck even harder than living elsewhere.

I'm seeing it positive. It means Ipo's will require license. It also means all the american scamcoins are in danger and most scams come out of the USA right now. So why cry?

Scammy presales will go away. That's great.

[Snail2]

This is not fun stuff but hard to ignore.

For who's interested about regulation proposals in the US: this article is a bit dated (Feb 2015) but probably still relevant:

"Decentralized Currency Issuers May Still Require License - The first draft of the BitLicense stated that, “controlling, administering, or issuing a Virtual Currency” qualifies as Virtual Currency Business Activity subject to licensing. This remains unchanged in the new draft, and that’s unfortunate."
https://coincenter.org/2015/02/our-initial-thoughts-on-new-yorks-revised-bitlicense-proposal/

I'm not sure how things are going in Europe but I would guess regulation proposals will be fairly similar. From reading multiple articles it sounds like the biggest requirement to get legal will be "KYC" or Know Your Customer.

It's not a matter of "if", but "when" and if we can come up with a system that satisfies some of those requirements we can have a chance to play, otherwise it looks like much of the innovations will be pushed underground.

EDIT: here's the full text of the first New York proposed regulations: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf

Any thoughts?

This guys are clearly have no clue what cryptoes really are . Once is started there are no controller or administrator. Issuer (= miner) could be a Chinese or Brazilian bloke who just have mined the block on a school computer... they surely going to line up in NY for bitlicense .

[sdmathis]

This is not fun stuff but hard to ignore.

For who's interested about regulation proposals in the US: this article is a bit dated (Feb 2015) but probably still relevant:

"Decentralized Currency Issuers May Still Require License - The first draft of the BitLicense stated that, “controlling, administering, or issuing a Virtual Currency” qualifies as Virtual Currency Business Activity subject to licensing. This remains unchanged in the new draft, and that’s unfortunate."
https://coincenter.org/2015/02/our-initial-thoughts-on-new-yorks-revised-bitlicense-proposal/

I'm not sure how things are going in Europe but I would guess regulation proposals will be fairly similar. From reading multiple articles it sounds like the biggest requirement to get legal will be "KYC" or Know Your Customer.

It's not a matter of "if", but "when" and if we can come up with a system that satisfies some of those requirements we can have a chance to play, otherwise it looks like much of the innovations will be pushed underground.

EDIT: here's the full text of the first New York proposed regulations: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf

Any thoughts?

This guys are clearly have no clue what cryptoes really are . Once is started there are no controller or administrator. Issuer (= miner) could be a Chinese or Brazilian bloke who just have mined the block on a school computer... they surely going to line up in NY for bitlicense .

Most crypto is not decentralized though. Most coins are controlled by the developer or a foundation who can be held responsible. True decentralization in crypto is very rare.

[illodin]

Most crypto is not decentralized though. Most coins are controlled by the developer or a foundation who can be held responsible. True decentralization in crypto is very rare.

When you say "controlled", what exactly do you mean by that?

[minerpage]

Most crypto is not decentralized though. Most coins are controlled by the developer or a foundation who can be held responsible. True decentralization in crypto is very rare.

When you say "controlled", what exactly do you mean by that?

"Controlled" probably means that if the dev pulls out, the coin fails.

Decentralized means nobody is in control and the coin transactions basically "runs itself" like SpreadCoin (SPR) does https://bitcointalk.org/index.php?topic=1045373.0

[coins101]

....Most crypto is not decentralized though. Most coins are controlled by the developer or a foundation who can be held responsible. True decentralization in crypto is very rare.

The bitcoin developers have never been issued with legal enforcement orders because they hold the keys to the repo (well, not any that I am aware of).

The Bitcoin Foundation did get a legal letter saying that it was a money transmitter and was in breach of AML laws, but that never went anywhere.

If a project can be forked and continued, then that is a pretty robust test for decentralization.

From memory, the bitlicences were going to carve out exceptions for developers. But let's wait and see.

btw, America does not run the global monetary system, despite its propaganda machine trying to persuade you otherwise. Bitcoin works just fine in the North Pole, Tuvalu and Bermuda, plus around 195 countries whose 7bn population far exceeds that of the USA.

[sdmathis]

The bitcoin developers have never been issued with legal enforcement orders because they hold the keys to the repo (well, not any that I am aware of.

Neither has the Federal Reserve. What's your point?

If a project can be forked and continued, then that is a pretty robust test for decentralization.

That's the test for decentralization? Your kidding, right? Decentralization is the goal, but we're far from achieving that goal. That's right. Even Bitcoin has yet to achieve the goal of decentralization.

I know. That's blasphomy. Let the stoning commence.

[coins101]

The bitcoin developers have never been issued with legal enforcement orders because they hold the keys to the repo (well, not any that I am aware of.

Neither has the Federal Reserve. What's your point?

I was responding to the position that a project is not decentralized because the developers can be held accountable.

So what?

Fork and continue.

When you can fork the Federal Reserve, come back and we'll talk.

[sdmathis]

The bitcoin developers have never been issued with legal enforcement orders because they hold the keys to the repo (well, not any that I am aware of.

Neither has the Federal Reserve. What's your point?

I was responding to the position that a project is not decentralized because the developers can be held accountable.

So what?

Fork and continue.

When you can fork the Federal Reserve, come back and we'll talk.

Your point about forking is irrelevant. Decentralization has nothing to do with the ability to fork a project.

Perhaps you're unfamiliar with the defination of decentralization. http://en.m.wikipedia.org/wiki/Decentralization

[coins101]

The bitcoin developers have never been issued with legal enforcement orders because they hold the keys to the repo (well, not any that I am aware of.

Neither has the Federal Reserve. What's your point?

I was responding to the position that a project is not decentralized because the developers can be held accountable.

So what?

Fork and continue.

When you can fork the Federal Reserve, come back and we'll talk.

Your point about forking is irrelevant. Decentralization has nothing to do with the ability to fork a project.

Perhaps you're unfamiliar with the defination of decentralization. http://en.m.wikipedia.org/wiki/Decentralization

This comment you made tells me you need to read that more than me:

...Most crypto is not decentralized though. Most coins are controlled by the developer or a foundation who can be held responsible. True decentralization in crypto is very rare.

You can't make a claim that devs controlling projects voids their decentralized nature, then say the exact opposite when your point is given the slightest challenge.

It's been fun. Not very educational, but fun nonetheless.

Never getting those minutes of my life back.

See ya, and........