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Author Topic: Sharing costs in relation to lawyers statements  (Read 1346 times)
Herodes
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January 30, 2013, 09:07:59 AM
 #1


I've talked with various payment processors, banks and other entities, and there's often a lot of confusion in regards to bitcoin. As there are various bitcoin business models, I'm sure more people have encountered these kinds of problems. I think a statement from a lawyer working with a reputable lawyer company specializing in financial law stating the legal situation of bitcoin in a particular jurisdiction could ease the worries of many people working for various financial institutions.

However, I guess at this point, everyone sits on their own turf, trying to figure this out. I think we would be more powerful if we were united.

What's the legal status for bitcoin in the UK, Netherlands, Germany, Scandinavia (Norway, Sweden, Denmark), Spain, Italy and so on ? Ie. what is bitcoin defined as within the current legal framework. I think that the community could pose different questions, and then we could have specialized lawyers answering these questions.

Questions could be like this:

What licenses are necessary to operate a Bitcoin exchange in the UK ?

What taxes apply to the sale of bitcoins in Italy ?

So basically, it would be possible to make an association with a specialized financial lawyer in all relevant jurisdictions, that could release a general statement that could be used with various financial services that a bitcoin company wants to cooperate with.

For instance:

Quote
Lawyer firm so and so hereby declares that within the jurisdiction of Belgium, the legal standing of Bitcoins are.... bla bla..

Then the bank, psp, or other financial institution or relevant company can see black on white what the current legal status of Bitcoin is. We could link to news articles all that we want, also from reputable sources like Reuters, Bloomberg etc, but I think a document from a lawyer would be very beneficial.

Because many bitcoin companies are run on shoe string budgets, not all of them can afford the expensive lawyers fees. So instead of paying 3K EUR to a lawyer, 10 companies would pay 0.3K EUR each, and all gaining the same benefit as if they did it all by themseves.

What do you think, would it be interesting to share these costs?

The first countries I would be interested in learning about the legal status of bitcoin is, UK, Germany and the Netherlands.
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Bitcopia
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January 30, 2013, 05:23:03 PM
 #2

I think this is the start of a good idea, but I think cohesion might be difficult. Each company is going to have its own specific set of questions, making the time spent with the law firm much higher than if just one company had its own consultation. Also, most companies are only going to be interested in their own jurisdiction. I live in the US and don't need to know what any other country's take on bitcoin is.

The other issue is that a lawyer doesn't decree the legal status of bitcoin. They can help others in the legal system understand what it is and how it relates, but they do not make the laws. Maybe they can help move towards a final decision by government officials, but do we really want to push that right now? Personally, I think we should let that unfold as slowly as their bureaucracy allows. It will give more time for higher market cap, more wide spread use, and better understanding by the general public. The more people who use bitcoin and understand its beauty, the harder it will be for governments to proclaim it evil because it thwarts their control.

I do agree that a lot of business are operating in a very grey area, and it would be nice to know where they stand. However, I think most of these companies are going to be interested only in there own jurisdiction. For instance, if a few other bitcoin businesses in the US want to collectively seek legal counsel, I am interested.




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January 30, 2013, 09:40:11 PM
 #3

Can the Bitcoin Foundation look into this kind of thing?

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
Herodes
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January 31, 2013, 07:27:15 AM
 #4

Yes, we could contact the Bitcoin Foundation in regards to this.

Naturally, different businesses will have different questions. But sometimes a business is rejected from opening a bank account or opening an account with a psp, simply because the financial provider are unsure of the legal status of bitcoin, so instead of risking anything, they just reject the application.

If you then can present a paper from the most reputable law-firm in the country saying that bitcoin has so and so legal status  and that it is not illegal within the current legal framework of that jurisdiction, then the clerk handling your case may look at it and say: "Ah, well, this looks good, we will open the account for you!".

So what I was wondering that was if businesses would be willing to share the costs of getting a general statement about bitcoin from a lawyer specialized in financial law. Later, others wanting to retrieve the same information, could pay a little fee to get the same document.

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February 08, 2013, 07:00:00 AM
 #5

Yes, we could contact the Bitcoin Foundation in regards to this.

Naturally, different businesses will have different questions. But sometimes a business is rejected from opening a bank account or opening an account with a psp, simply because the financial provider are unsure of the legal status of bitcoin, so instead of risking anything, they just reject the application.

If you then can present a paper from the most reputable law-firm in the country saying that bitcoin has so and so legal status  and that it is not illegal within the current legal framework of that jurisdiction, then the clerk handling your case may look at it and say: "Ah, well, this looks good, we will open the account for you!".

So what I was wondering that was if businesses would be willing to share the costs of getting a general statement about bitcoin from a lawyer specialized in financial law. Later, others wanting to retrieve the same information, could pay a little fee to get the same document.



We will be happy to share all legal work, and also donate towards work of other business to help them share and get their legal opinions. Really we should open bitcoin-legal.org where anyone getting any written legal advice/opinion can submit it there, from the lawyers per respective its a great place to advertise themselves as legal advisors for bitcoin business and it will create a great database. Willing to donate 20 btc to setup this website.

Founder @etoro
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Herodes
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February 08, 2013, 03:49:40 PM
 #6

Yes, we could contact the Bitcoin Foundation in regards to this.

Naturally, different businesses will have different questions. But sometimes a business is rejected from opening a bank account or opening an account with a psp, simply because the financial provider are unsure of the legal status of bitcoin, so instead of risking anything, they just reject the application.

If you then can present a paper from the most reputable law-firm in the country saying that bitcoin has so and so legal status  and that it is not illegal within the current legal framework of that jurisdiction, then the clerk handling your case may look at it and say: "Ah, well, this looks good, we will open the account for you!".

So what I was wondering that was if businesses would be willing to share the costs of getting a general statement about bitcoin from a lawyer specialized in financial law. Later, others wanting to retrieve the same information, could pay a little fee to get the same document.



We will be happy to share all legal work, and also donate towards work of other business to help them share and get their legal opinions. Really we should open bitcoin-legal.org where anyone getting any written legal advice/opinion can submit it there, from the lawyers per respective its a great place to advertise themselves as legal advisors for bitcoin business and it will create a great database. Willing to donate 20 btc to setup this website.

In the spirit of open source, letting legal papers be available for everyone could be the way to go. The showstoppers I can see for this would be that the parties actually paying for the information, or the partien getting paid (lawyers) would not want to give it away for free. So perhaps the way to go would be to have some member subscription service, so that members get access to the legal papers in question ?

Of course, if the parties involved wanted to make the information available for free, that would be fine. But I'm thinking more along the lines of that the cost should be distributed among the members.

Let's take a specific example:

In the UK, there's probably a lot of shoe string budget companies, and of course some with bigger budgets, wanting to offer some bitcoin services, so naturally they'd be interested in the current legal status of bitcoin within the applicable legal framework.

So in regards to their connections with traditional banks, direct payment services, mobile payment services and so on, some statement from a lawyer would be interesting.

A lawyer's paper could be somewhat comprehensive detailing a lot about different aspect of bitcoin usage, like licenses required to operate a legal exchange, how bitcoins trade will be taxed etc. I think also a lot of banks/psp's are interested in minimizing their own exposure, so in cases like that, perhaps detailing who would held be responsible if 'money laundering' occured might also be interesting.

These are all loose thoughts from my side, but I think working together is better than everybody seeking advice for themselves. It would also be possible to discuss between several parties which questions would be most interesting to ask a law firm about.  I'm sure there's also the general questions like:

What's bitcoin defined as in country x ?
How will trade with bitcoins be taxed ? (ie. VAT of trading fee, or as value added TAX of the entire amount - that's some kind of showstopper, but I digress)
What licenses are required to operate an exchange ?
And I assume there could be a lot of other questions that could be answered as well.

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February 08, 2013, 03:56:08 PM
 #7

What licenses are necessary to operate a Bitcoin exchange in the UK ?

AFAIK, in UK proper exchange would need to get FSA licence. This basically means employing a "fit and proper person" (read: a lawyer) as a compliance officer, having some minimal reserves. Whenever some unhappy customer after exhausting exchange's complaint procedure escalates the complaint to FSA the exchange automatically would have to pay 400£ to FSA to cover expenses of investigation of the complaint and then make the customer whole as FSA directs. The compliance can get quite expensive rather quick.

On the other hand anyone with a brain would prefer this exchange to others due to FSA provided "safety net"


How will trade with bitcoins be taxed ? (ie. VAT of trading fee, or as value added TAX of the entire amount - that's some kind of showstopper, but I digress)

This indeed a show stopper. I would love to hear how all those proposed UK based exchanges expect to get around 20% VAT. They can only play with fire until HMRC decides to go after them. Alternatively such UK based exchange would not accept anyone from EU or UK as customers and work only with the rest of the word and as such make VAT not applicable. Given all the troubles, some offshore jurisdiction would be quite a viable route.

My conclusion: a UK based exchange is a non starter. I'd love to be proven wrong.

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February 08, 2013, 05:22:45 PM
 #8

Yes, we could contact the Bitcoin Foundation in regards to this.

Naturally, different businesses will have different questions. But sometimes a business is rejected from opening a bank account or opening an account with a psp, simply because the financial provider are unsure of the legal status of bitcoin, so instead of risking anything, they just reject the application.

If you then can present a paper from the most reputable law-firm in the country saying that bitcoin has so and so legal status  and that it is not illegal within the current legal framework of that jurisdiction, then the clerk handling your case may look at it and say: "Ah, well, this looks good, we will open the account for you!".

So what I was wondering that was if businesses would be willing to share the costs of getting a general statement about bitcoin from a lawyer specialized in financial law. Later, others wanting to retrieve the same information, could pay a little fee to get the same document.



We will be happy to share all legal work, and also donate towards work of other business to help them share and get their legal opinions. Really we should open bitcoin-legal.org where anyone getting any written legal advice/opinion can submit it there, from the lawyers per respective its a great place to advertise themselves as legal advisors for bitcoin business and it will create a great database. Willing to donate 20 btc to setup this website.

Registered the address Smiley I will work on a website this weekend.

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Herodes
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February 08, 2013, 05:39:55 PM
 #9

Yes, we could contact the Bitcoin Foundation in regards to this.

Naturally, different businesses will have different questions. But sometimes a business is rejected from opening a bank account or opening an account with a psp, simply because the financial provider are unsure of the legal status of bitcoin, so instead of risking anything, they just reject the application.

If you then can present a paper from the most reputable law-firm in the country saying that bitcoin has so and so legal status  and that it is not illegal within the current legal framework of that jurisdiction, then the clerk handling your case may look at it and say: "Ah, well, this looks good, we will open the account for you!".

So what I was wondering that was if businesses would be willing to share the costs of getting a general statement about bitcoin from a lawyer specialized in financial law. Later, others wanting to retrieve the same information, could pay a little fee to get the same document.



We will be happy to share all legal work, and also donate towards work of other business to help them share and get their legal opinions. Really we should open bitcoin-legal.org where anyone getting any written legal advice/opinion can submit it there, from the lawyers per respective its a great place to advertise themselves as legal advisors for bitcoin business and it will create a great database. Willing to donate 20 btc to setup this website.

Registered the address Smiley I will work on a website this weekend.

Ok, great. Are you into this because you do want to advance the legal stuff regarding BTC, or just because you wanted that 20 BTC ? 

Also, it's kind of important that anyone running this does it for the right reasons, and not because they want to make money. Do you have any trust rating to your name, and do you currently run any bitcoin businesses.

As much as I love the initiative, and you registering the domain name, I don't know where you're going with this. Also, what should the website contain, how should it be laid out, should we use some existing open source software to run it etc.

Everything needs to be transparent here, and I think there needs to be more admins of such a site. I also think it's good if it's run by someone that has some business experience and preferrably of age 30+. Point blank, it needs to be run by someone that's responsible, and want to stick around for months and years to come, not someone just building a site and collecting 20 BTC.

Sorry if this came forward as whimpy, but I am serious about this issue, and it needs to be done in a serious fashion as well.

All the best!
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February 09, 2013, 12:28:36 AM
 #10

Ok, great. Are you into this because you do want to advance the legal stuff regarding BTC, or just because you wanted that 20 BTC ?  
I really do want to advance the legal status around the world. I've been taking an interest in the legalities recently and have started trying to work out any relevant definitions for Bitcoin in Australia. I would be happy to help research law for other countries as well.

Also, it's kind of important that anyone running this does it for the right reasons, and not because they want to make money. Do you have any trust rating to your name, and do you currently run any bitcoin businesses.
Valid concern - yes, I am leotreasure http://bitcoin-otc.com/viewratingdetail.php?nick=leotreasure&sign=ANY&type=RECV

As much as I love the initiative, and you registering the domain name, I don't know where you're going with this. Also, what should the website contain, how should it be laid out, should we use some existing open source software to run it etc.
I was thinking of using Media Wiki. Open to suggestions.

Everything needs to be transparent here, and I think there needs to be more admins of such a site. I also think it's good if it's run by someone that has some business experience and preferrably of age 30+. Point blank, it needs to be run by someone that's responsible, and want to stick around for months and years to come, not someone just building a site and collecting 20 BTC.

Sorry if this came forward as whimpy, but I am serious about this issue, and it needs to be done in a serious fashion as well.

All the best!
Agreed. I'm happy to appoint senior members of the community as admins for the site. I have some real life business experience in website development. I completely understand where you're coming from. You can rest assured I am in Bitcoin for the long haul and not just trying to make a quick buck.

A bit of background on me:
Studied law and computer science for one year each and been actively studying bitcoin since April 2011. Been mining since June 2011 and have investments in various Bitcoin endeavours. I have just started a course in Communications and Media with a goal to produce a short Bitcoin film. It will mainly be about explaining what it is, how it works etc. Legal status in Australia will have a strong focus.

I am happy to prove myself in setting up this website. If I produce substandard work I will happily oblige in passing the domain on to yourself.

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Herodes
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February 09, 2013, 12:41:24 AM
 #11

The responses seems satisfying at this point, I could ask you to sign a message with the private key of leotreasure to prove that you're really him later on, but it's not really urgent.

I am glad that somebody took the initiative, as the idea is open for anyone to work on.

I am thinking, would it be possible to have a lawyer make a statement in regards to bitcoin for certain jurisdictions that would actually be useful in terms of working with financial companies? Surely, larger companies will have custom made queries, but smaller companies can benefit greatly from having some standard legal papers to show the bank or whatever. It seems like showing a document from a lawyer has a larger effect than just giving someone a link to an article online. Wink

But most clearly, there will be a need for this. Perhaps we should sent a request to the Bitcoin Foundation, perhaps they have some ideas too.
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February 09, 2013, 12:49:28 AM
 #12

I'm happy to clear sign a message, though still learning the ropes with gpg. I think starting a thread in the Bitcoin Foundation is an excellent idea! I am a lifetime member too. I need to go out for lunch now and Chinese new years eve later but I will be working solidly on setting up the page tonight.

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Herodes
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February 09, 2013, 12:53:21 AM
 #13

I'm happy to clear sign a message, though still learning the ropes with gpg. I think starting a thread in the Bitcoin Foundation is an excellent idea! I am a lifetime member too. I need to go out for lunch now and Chinese new years eve later but I will be working solidly on setting up the page tonight.

Enjoy, there's no rush man.
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February 09, 2013, 02:41:03 PM
 #14

I'm happy to clear sign a message, though still learning the ropes with gpg. I think starting a thread in the Bitcoin Foundation is an excellent idea! I am a lifetime member too. I need to go out for lunch now and Chinese new years eve later but I will be working solidly on setting up the page tonight.

Enjoy, there's no rush man.

Hey just thought I'd provide an update - got back from the dinner, been arguing about tax, bitcoin, societal issues for a few hours. Just uploaded the wiki software on ftp and it looks like it's going to take a bit. Will resume work on it tomorrow - we should have the bare bones of a wiki in about 12 hours! Smiley

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