Bitcoin-Central, first exchange licensed to operate with a bank. This is HUGE

[2weiX]

Just for the few people here who seem a little confused : Bitcoin is legally neither currency, nor electronic money.

It is a financial instrument, tho (at leas so sayeth BAFin).

[paraipan]

Just for the few people here who seem a little confused : Bitcoin is legally neither currency, nor electronic money.

It is a financial instrument, tho (at leas so sayeth BAFin).

Not at all 2weiX, but digital property like for example a domain name. We've been having allot of talks with our lawyers here in Spain, and the most probable course of action will be to follow laws and regulations regarding personal property that are already in place for the digital realm.

[becoin]

and the most probable course of action will be to follow laws and regulations regarding personal property that are already in place for the digital realm.

That'll be a big mistake! If you follow this course of action all bitcoin exchanges will have to apply sales tax in the US or VAT in the EU which is roughly 20% on every bitcoin sale. You understand that bitcoin can not compete with any fiat currency if 20% "fee" is applied on all currency conversions!

[paraipan]

and the most probable course of action will be to follow laws and regulations regarding personal property that are already in place for the digital realm.

That'll be a big mistake! If you follow this course of action all bitcoin exchanges will have to apply sales tax in the US or VAT in the EU which is roughly 20% on every bitcoin sale. You understand that bitcoin can not compete with any fiat currency if 20% "fee" is applied on all currency conversions!

Please read again, I said digital property not digital goods, although you can find certain tax exempt goods too.

[becoin]

Please read again, I said digital property not digital goods, although you can find certain tax exempt goods too.

I'm not aware of any judicial system that makes distinction between digital property and digital goods. The article you've pointed me to is describing only the digital property:

Intellectual property rights also can exist in digital property, such as pictures, music, movies, literary works, Web pages, computer code, and other creative works.

If above items are digital property I wonder what would be digital goods then?

[davout]

Surprisingly, becoin is right, if you sell stuff there's VAT.

Please read again, I said digital property not digital goods, although you can find certain tax exempt goods too.

Oh, so that's where you were going, be a fixed-rate exchanger, sell BTC, pay VAT on sales but find some sort of category that benefits from a VAT full/partial exemption and get lawyers to make it fit in said category. Right?

[paraipan]

Please read again, I said digital property not digital goods, although you can find certain tax exempt goods too.

I'm not aware of any judicial system that makes distinction between digital property and digital goods. The article you've pointed me to is describing only the digital property:

Intellectual property rights also can exist in digital property, such as pictures, music, movies, literary works, Web pages, computer code, and other creative works.

If above items are digital property I wonder what would be digital goods then?

Explaining the difference would be quite lengthy and off-topic for this thread. You can look at it like the difference from real estate, house or land deeds, and chattels which are your possession too but can be moved with ease. Bitcoin would be the equivalent of real estate in this case, and the only thing that changes would be their possession in the blockchain. This is similar to a central register that is maintained by your local Town Hall with all the people's property on available land.

Sorry for derailing this topic.

[paraipan]

Surprisingly, becoin is right, if you sell stuff there's VAT.

Please read again, I said digital property not digital goods, although you can find certain tax exempt goods too.

Oh, so that's where you were going, be a fixed-rate exchanger, sell BTC, pay VAT on sales but find some sort of category that benefits from a VAT full/partial exemption and get lawyers to make it fit in said category. Right?

That's right davout. We found out this could be applied to a floating rate exchange too, so a a license for money transmitting would only be required in case we want to provide extra services to our clients, but not the basic exchange of bitcoins for fiat. A recent similar decision was made public by the Canadian FinTRAC authority.

http://www.theregister.co.uk/2013/05/20/canada_welcomes_bitcoin_traders_fintrac_letter/

[davout]

That's right davout. We found out this could be applied to a floating rate exchange too, so a a license for money transmitting would only be required in case want to provide extra services to our clients, but not the basic exchange of bitcoins for fiat. A recent similar decision was made public by the Canadian FinTRAC authority.

http://www.theregister.co.uk/2013/05/20/canada_welcomes_bitcoin_traders_fintrac_letter/

It depends on what you call a floating rate exchange.

As soon as you touch the clients funds you need a license because you're escrowing them, aka holding them on deposit.

The alternative is "we buy from the seller, and sell to the buyer in the very same operation, the money on deposit is just a pre-payment to us" but then the whole VAT mess sneaks back in.

So your thing is "Bitcoins aren't sold or bought, only their 'property titles' are negotiated" that's really interesting. I'll look into it

[paraipan]

...

So your thing is "Bitcoins aren't sold or bought, only their 'property titles' are negotiated" that's really interesting. I'll look into it

Exactly, I recommend you look into SEDO, the biggest marketplace for domain names around. I think I already did enough thread derailing for today.

[becoin]

You can look at it like the difference from real estate, house or land deeds, and chattels which are your possession too but can be moved with ease.

In all the countries I've lived so far transactions in real estate, house or land deeds, and chattels are NOT tax exempt! You have to pay both federal and local taxes. So, back to square 1.

[paraipan]

You can look at it like the difference from real estate, house or land deeds, and chattels which are your possession too but can be moved with ease.

In all the countries I've lived so far transactions in real estate, house or land deeds, and chattels are NOT tax exempt! You have to pay both federal and local taxes. So, back to square 1.

Sit back and relax, you have the answer in your post. NOT tax exempt, but you don't pay VAT 

[becoin]

...

So your thing is "Bitcoins aren't sold or bought, only their 'property titles' are negotiated" that's really interesting. I'll look into it

Exactly, I recommend you look into SEDO, the biggest marketplace for domain names around. I think I already did enough thread derailing for today.

I appreciate when somebody is trying to find a solution but believe me, this is the wrong way to follow. Domain names are very different from bitcoins. For instance, there is only one "manufacturer" worldwide of .com's, .net's, .org's etc. This is why they have special treatment. While with bitcoins every miner is a "manufacturer" of bitcoins and will have to pay sales tax when they sell their product if, of course, bitcoin don't get the status of a currency.

[becoin]

You can look at it like the difference from real estate, house or land deeds, and chattels which are your possession too but can be moved with ease.

In all the countries I've lived so far transactions in real estate, house or land deeds, and chattels are NOT tax exempt! You have to pay both federal and local taxes. So, back to square 1.

Sit back and relax, you have the answer in your post. NOT tax exempt, but you don't pay VAT  

It is worse. You pay a dozen of different taxes and fees depending on the location and there are also different restriction upon subsequent resales.

[davout]

It is worse. You pay a dozen of different taxes and fees depending on the location and there are also different restriction upon subsequent resales.

Relax. And go do something of your own.

[MPOE-PR]

You can look at it like the difference from real estate, house or land deeds, and chattels which are your possession too but can be moved with ease.

In all the countries I've lived so far transactions in real estate, house or land deeds, and chattels are NOT tax exempt! You have to pay both federal and local taxes. So, back to square 1.

Sit back and relax, you have the answer in your post. NOT tax exempt, but you don't pay VAT 

Pure nonsense. Nobody has any title to any Bitcoin.

Because of these reasons it can not be said that anyone holds any title in either law or equity to any Bitcoin. Since there is no first owner of the Bitcoin that could then pass title as part of a contract, all purported Bitcoin "purchases" are contracts for no consideration and as such legally without merit.

The reasons why Bitcoin securities can't be regulated by the SEC.

[2weiX]

Just for the few people here who seem a little confused : Bitcoin is legally neither currency, nor electronic money.

It is a financial instrument, tho (at leas so sayeth BAFin).

Not at all 2weiX, but digital property like for example a domain name. We've been having allot of talks with our lawyers here in Spain, and the most probable course of action will be to follow laws and regulations regarding personal property that are already in place for the digital realm.

the german SEC (called bafin) has stated that as soon as the BTC is traded for money, it is a financial instrument.
the FinCEN has called Bitcoin a "digital currency".

i do not for a minute subscribe to this "digital property" bull.

[2weiX]

You can look at it like the difference from real estate, house or land deeds, and chattels which are your possession too but can be moved with ease.

In all the countries I've lived so far transactions in real estate, house or land deeds, and chattels are NOT tax exempt! You have to pay both federal and local taxes. So, back to square 1.

Sit back and relax, you have the answer in your post. NOT tax exempt, but you don't pay VAT 

Pure nonsense. Nobody has any title to any Bitcoin.

Because of these reasons it can not be said that anyone holds any title in either law or equity to any Bitcoin. Since there is no first owner of the Bitcoin that could then pass title as part of a contract, all purported Bitcoin "purchases" are contracts for no consideration and as such legally without merit.

The reasons why Bitcoin securities can't be regulated by the SEC.

irrelevant since the SEC can control many/most (the biggest and most important) veins INTO and OUTOF the BTC.

[sturle]

You're assuming someone is trying to run a bitcoin bank versus an exchange.

Bank or exchange it doesn't matter. Under the current regulatory framework they are parts of one chain and operate in the same fashion. If you are not able to confiscate the funds on a customer account you are not compliant. Period.

They can confiscate funds, bitcoins or fiat, on a customer account.  Easily.  They can't confiscate funds in the customer's private wallet.  Neither can banks.

[becoin]

They can't confiscate funds in the customer's private wallet. 

This is exactly what I'm saying. If you offer your customers services that help them transact from one private wallet to another without being capable of confiscating their funds if you're ordered to, then you don't comply with current regulation. You'll be tagged money launderer.