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Author Topic: FinCEN addresses Bitcoin  (Read 28101 times)
repentance
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March 19, 2013, 12:57:35 AM
 #41

There is good and bad in this news, but the net effect is extremely good. Bitcoin demolishes all resistance, and just entered the next phase of its evolution.

I just wonder how miners will cope with this news. Technically they could just buy gold and silver and sell that to avoid needed a license.. but still..

In some places, once you trade a certain volume of precious metals you're subject to AML/CFT regulations and need to register and report just like you'd need to if you were providing a financial services.

This news from FinSEC is less about virtual currencies and Bitcoin than it is about the services which have grown up around them.  It makes abundantly clear that those services will be subject to regulation - which people were pretty much expecting would be the case.  It just pre-empts the possibility of another PayPal style legal battle where a particular service argues that it's non subject to financial services regulations and AML/CFT requirements.


All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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Severian
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March 19, 2013, 12:59:34 AM
 #42

Maybe I'm just getting cyncial in my old age, but all I see is the billy club they just made for themselves to swing at anyone of us or all of us if they ever see Bitcoin as an economic threat.

Some of my favorite illegal things started out by being "regulated" first before they were banned.
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March 19, 2013, 01:02:30 AM
 #43

One interesting side effect of this is it seems likely that all the 'anonymous' fiat<->Bitcoin services that have sprung up are going to have to start being significantly more nosy about who they do business with...


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March 19, 2013, 01:02:49 AM
 #44

1 million? That is quite expensive. As far as I know that license in Finland costs like 5000 EUR, which our company is prepared to pay if this ruling spreads to Finland. Not sure how much these licenses cost for the whole EU though.

For mining though, I will venture to guess that people will simply not report any of it from now on. If the coins are mixed, there is no way to really know where the coins came from.

And now that you pay for the license, they know who you are and will pester you until the end of time as they keep changing the law to benefit them so they can take more from you.
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March 19, 2013, 01:03:56 AM
 #45



Not yet.
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March 19, 2013, 01:09:03 AM
 #46


With the standard "I Am Not A Lawyer" disclaimer, my read is that miners might be ok if

  • They sell bitcoins for fiat, via a licensed exchange
  • They purchase goods and services entirely within the bitcoin economy

The first is obvious.  The US government is certainly within their rights to regulate the US Dollar, and ditto for other government fiat currencies.

The second is vastly positive.  Stimulative for the bitcoin economy, encouraging a broad market of services priced in bitcoins.

And the third, more general point is implied:  bitcoins are legal for regular users to possess and spend.

It is true that bitcoins were never illegal, but having a big government issuing an affirmative statement "bitcoins are legal" (in effect) is great news.


Jeff Garzik, Bloq CEO, former bitcoin core dev team; opinions are my own.
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TheButterZone
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March 19, 2013, 01:19:02 AM
 #47

http://en.wikipedia.org/wiki/Everything_which_is_not_forbidden_is_allowed

Everything which is specifically allowed will ultimately be regulated out of the hands of the common man via protectionist, pro-monopoly, anti-economic liberty "legal" requirements in the form of licensing, insurance, etc... ad nauseam. Not even a Constitutional Amendment can save anything, as long as the fed courts bend over backward to please tyrants.

Don't get the $1000 threshold mixed up with the BTC>USD definition. Exchange a SINGLE PENNY for your BTC without fulfilling the requirements, and you're a criminal.

It's like saying "since there was no specific declaration that exhaling CO2 was legal, it's great news that the government has now affirmed it is, subject to your paying carbon credits."

FTFY

bitlizard
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March 19, 2013, 01:23:30 AM
 #48

This is pretty much the best news regarding bitcoin we could have gotten from the government.

Are you out of your fucking mind???

No I agree, it is the best news US peoples could have hoped for. Bitcoin is now explicitly legal and will be regulated like real money (we knew it was already real money, but now the "normal business community" will as well).  I've long said that Amazon will not accept Bitcoin until the legal uncertainty is removed. This just removed it.

There is good and bad in this news, but the net effect is extremely good. Bitcoin demolishes all resistance, and just entered the next phase of its evolution.

I understand why people might think this is a good thing, we all knew it was inevitable so I guess I shouldn't be too surprised. Right now we know very little about the scope and or future enforcement of whatever regulation is being cooked up. What I think we do know very well is that, bitcoin and government don't really mix. At all.

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matonis
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March 19, 2013, 01:24:44 AM
 #49

From BLOGDIAL's "FinCEN sounds death knell for US based Bitcoin businesses" (it's worth a read):
http://irdial.com/blogdial/?p=3488

"Finally, this is a great opportunity for a country to cause Bitcoin startups to congregate in their territory. A 150 year moratorium on any law that touches anything to do with Bitcoin / Blockchain technology would create a new Hong Kong island of super prosperity, as it becomes the world’s hub for all Bitcoin business, and the trillions of dollars in Bitcoin flowing through it, leaving the pitiful democracies in the dust."

Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
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March 19, 2013, 01:25:05 AM
 #50

I don't think this has anything to do with legality.

This is about regulation: The bureaucrats weapon of choice.

You make a valid and possibly disconcerting point.

Marijuana isn't legal - but the (tax) regulations surrounding it will get you into a hell of a lot more trouble than possession will.

Spitting on the sidewalk might get you a ticket for a fourth degree misdemeanor, if the cop is having a particularly bad day - but agreeing with your buddy to spit together is conspiracy under the law.  That's worth 20 years in a federal pen.

I think Vladimir's exhortation in another (Cyprus-related) thread applies here as well.  Maybe even more so.

Get your BTC into your own wallet.

Clean them up...

Watch how the shitstorm develops.

Dankedan: price seems low, time to sell I think...
nameface
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March 19, 2013, 01:26:07 AM
 #51

Is the bitcoin community radical enough to cut the US gov out? Like, if, says, the gov attempts to forbid bitcoin, or create unreasonable restrictions?
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March 19, 2013, 01:30:24 AM
 #52

Is the bitcoin community radical enough to cut the US gov out? Like, if, says, the gov attempts to forbid bitcoin, or create unreasonable restrictions?

Oh sure.

The question is one of balancing anonymity against paying the rent.

Dankedan: price seems low, time to sell I think...
justusranvier
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March 19, 2013, 01:30:43 AM
 #53

Is the bitcoin community radical enough to cut the US gov out? Like, if, says, the gov attempts to forbid bitcoin, or create unreasonable restrictions?
I expect the restrictions will have the same effect the laws in Argentina have on the unofficial exchange rate.
bitlizard
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March 19, 2013, 01:31:31 AM
 #54

Is the bitcoin community radical enough to cut the US gov out? Like, if, says, the gov attempts to forbid bitcoin, or create unreasonable restrictions?

I'm sure some in the community are more than radical enough. The question is, how many innocent people will have their lives destroyed for non-compliance?

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March 19, 2013, 01:49:15 AM
 #55

Also an I Am Not A Lawyer (IANAL) disclaimer.

I was trying to figure if this applies to a hosted (shared) EWallet provider who holds customer's bitcoins and broadcasts bitcoin transactions, but does not convert to fiat or any other type of currency.

Quote
Administrators and Exchangers of Virtual Currency

An administrator or exchanger that (1) accepts and transmits a convertible virtual currency [,,,] for any reason is a money transmitter under FinCEN's regulations,

Because the EWallet provider isn't providing exchange to fiat or other currency (or value that substitutes as currency) the service is not a money transmitter.

That's good.


Quote
An administrator or exchanger that [...] (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations,

a.   E-Currencies and E-Precious Metals

Examples include, in part, (1) the transfer of funds between a customer and a third party by permitting a third party to fund a customer's account;

One example of this is an exchange that lets a customer have cash deposited into the exchange's bank account.  There's no way to prove the funds were the customer's funds and not some third party that had deposited for credit to the customer's exchange account.  

Because of the difficulties exchanges have had in offering that service I've just assumed that was a gray area.  But what if these funds are bitcoins and not dollars?  Does this mean an EWallet provider [Edit: exchange] needs to know that the bitcoins received to my wallet account came from me, and were not the result of a transfer I received from someone else?  That's the whole point of an EWallet .   This is unclear to me if this "no third party payments" restriction applies to bitcoin transfers as well.

Quote
(2) the transfer of value from a customer's currency or commodity position to the account of another customer;

That's the end of redeemable codes and account-to-account (A2A) transfers (unless, of course, the service providing it is an exchange and money transmitter).  But again, is this just for fiat funds, or do BTC transfers apply as well?

Quote
or (3) the closing out of a customer's currency or commodity position, with a transfer of proceeds to a third party.

So the cash-out services where the withdrawal goes to whichever bank account you provide would make them a money transmitter.  Or the ones that will cash out coins and send a Western Union money transfer or make a cash deposit to my bank account at my bank -- those are money transmitters according to this.

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March 19, 2013, 01:59:32 AM
 #56

I don't think this has anything to do with legality.

This is about regulation: The bureaucrats weapon of choice.

Exactly.

As soon as a state officially recognizes bitcoin .. it's like, the start of an avalanche. This is an amazing thing, for freedom and transparency and end end to corrupt bankers and governments and the damn rothchilds and their ilk
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March 19, 2013, 02:06:40 AM
 #57

On the

"Bitcoin and government don't mix"

I'm a politician, I love bitcoin, I belong to a small party (atm, just wait until Cannabis is legaised in the UK Wink

And ye, bitcoin IS the future. Regulation IS key (and as someone rightly mentioned, it's the next stage of its evolution).

https://bitcointalk.org/index.php?topic=152651.0

It would be better to say "current governments (corrupt, greed, banker controlled) and bitcoin don't mix"

But the governments of the future, ohhhh, they're gonna LOVE IT, because using bitcoin will enable the people to love you (as you save them from this horrible state the planet is in).
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March 19, 2013, 02:12:44 AM
 #58

On the

"Bitcoin and government don't mix"

I'm a politician, I love bitcoin, I belong to a small party (atm, just wait until Cannabis is legaised in the UK Wink

And ye, bitcoin IS the future. Regulation IS key (and as someone rightly mentioned, it's the next stage of its evolution).

https://bitcointalk.org/index.php?topic=152651.0

It would be better to say "current governments (corrupt, greed, banker controlled) and bitcoin don't mix"

But the governments of the future, ohhhh, they're gonna LOVE IT, because using bitcoin will enable the people to love you (as you save them from this horrible state the planet is in).

we must have different definitions of the word government. I define government as a group of people who have claimed a monopoly on the use of violence within a geographical area.

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March 19, 2013, 02:13:43 AM
 #59

So does this FinCEN shit apply to anybody trading in BTC ->USD even if they are not from the US?


This is the beginning of the end for no questions asked exchanges,  Me thinks somebody should get working on a decentralised exchange if its even technically feasible.


Anyway they can pry my bitcoin from my cold dead brain.

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March 19, 2013, 02:14:05 AM
 #60

tl;dr...  bitcoins are legal


WOO HOO!!!!!!!!!!!!!!!!!!!!!!!!!!


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