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Author Topic: FinCEN addresses Bitcoin  (Read 28092 times)
alexanderanon
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March 19, 2013, 03:22:45 AM
 #81

The anonymous BTC<-->USD exchanges are going to go two ways: Those that comply with FinCen and ask customers for full information

Yup.  There's really no way the exchange could prove the withdrawal was not to a third party.


Doesn't such an exchange need to be "aware" that a fiat withdrawal was sent to a 3rd party for it to be violating any laws? If fastcash (for example) merely puts in its policy that 3rd party payments are "prohibited" (as they do), then wouldn't they be safe?
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Severian
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March 19, 2013, 03:27:25 AM
 #82

Have you ever heard of the bank for international settlements?   

Here's one a few years older than BIS.

In 1895, the Rothschilds and JP Morgan Sr. saved the US government from bankruptcy by essentially taking over the gold supply for the government. Here's the contract:

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US Congressional Record, Feb 1895

Contract

This agreement entered into this eighth day of February, 1895, between the Secretary of the Treasury of the United States, of the first part, and Messrs. August Belmont and Company, of New York, on behalf of Messrs. N. M. Rothschild and Sons, of London, England, and themselves, and Messrs. J. P. Morgan and Company, of New York, on behalf of Messrs. J. S. Morgan and Company, of London, and themselves, parties of the second part...

Banking families took over the American money supply in 1895. This isn't conspiracy, it's just simple fact as mentioned by even politicians of the day:

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    “The active cooperation of Grover Cleveland in the manipulation of the currency by the Rothschilds of London and J. Pierpont Morgan of New York was very unpopular with the people. He was accused by both leading Democrats and Republicans of having betrayed his party and of having turned his back upon the Democratic platform of 1884 upon which he was elected.”

    Reminiscences of Senator William M. Stewart (Nevada, 1908)

BS talk about the Illuminati and UFOs are uttered by foolish people that will believe anything, even coincidences.
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March 19, 2013, 03:28:48 AM
 #83

Me thinks somebody should get working on a decentralised exchange if its even technically feasible.
I've been considering how to do it. I'll need to obtain legal advice, though - there's one piece of it that will probably require a lawyer's advice (especially in the light of the guidance memo's mention of "e-precious metals").



/Facepalm 

Why would you set up a decentralised exchange that could be hosted on multiple computers in multiple jurisdictions if you were going to comply with all their endless rules & regs?, especially if you are in multiple countries it will be infeasible to comply. What would be the point of the decentralisation?

look at bitcoinx.  Imagine a bunch of different xxxcoin currencies, all trading on the same blockchain.  Most of them are backed by someone for something (like USD).  Now, you pay the backer 50 BTC (say) and he gives you 250 usdCoins.  First trap... are you "printing" (counterfeiting) USD b/c your usdCoins are not really USD?  Ok this may be avoidable by issuing DUScoins (some other name).  But you have the reputation paradox -- anyone with a good enough reputation and $ to back DUScoins doesn't want to risk going to jail.  And cannot be anonymous.

But let's say it happens.  Someday someone wants to return DUScoins to the backer and get real physical bills (or a wire transfer) of USD.  I'd imagine that that would be the moment when you as the backer need to comply with AML and insist on ID.  

BTW, IANAL.



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March 19, 2013, 03:41:05 AM
 #84

BTC-e.com is going to have to get all it's ducks in a row.

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whitenight639
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March 19, 2013, 03:41:59 AM
 #85


Here's one a few years older than BIS.




Did you know JP morgan and Mastercard run the Electronic Benefit Transfer in the US and are funding lobbying groups here in the UK to implement a similar benefits card, obviously profiting from the poor is not new for J P Morgan there are possibilities of such a program turning into an Orwellian nightmare as our economies falter and more people look to the state for help. When things like this are viewed in the context of increasing globalisation and militarisation of police you have to be a dumb ass to not consider the possibility of a conspiracy.


The Rothschild also became majority bond holders in the bank of England or Treasury as may have been at the time, I'm sure you are familiar with the popular story of the the Rothschilds faster courier / horseman bring back news of a British victory at the battle of Waterloo and how Nathan Rothschild promptly sold his bonds to create a fire-sale, thereby buying up everybody else's at much reduced price.

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March 19, 2013, 03:45:59 AM
 #86

This is a "guidance" posting.  It's a summary of how FinCEN feels that the already-existing regulations apply to the situation.  In reality, nothing much has changed except for providing some clarity.  All that verification stuff is required and the fly-by-night folks have got some worrying to do.

I'm wondering how things like the Linden Labs stuff comes out of this.  They have centralized virtual currency with an administrator.   On the other hand, they have third parties doing conversions so they might be ok.



Interesting point.

It might make better business sense for them to switch to bitcoin.  Less paperwork.

Dankedan: price seems low, time to sell I think...
Severian
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March 19, 2013, 03:54:12 AM
 #87

JP morgan and Mastercard run the Electronic Benefit Transfer in the US

JPM controls about half of the EBT cards in the US. If the US govt. lets JPM fail, the 25% or so of Americans that depend on JPM's EBTs would be out of luck. Imagine LA, Chicago, NYC, etc. within two weeks of no EBTs. Cities would burn. JPM has the government, and Americans, by the short hairs.

It's simple extortion as any occupier does to a servant state: prop us up or we'll burn your cities.  



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March 19, 2013, 04:07:49 AM
 #88

Why would you set up a decentralised exchange that could be hosted on multiple computers in multiple jurisdictions if you were going to comply with all their endless rules & regs?, especially if you are in multiple countries it will be infeasible to comply. What would be the point of the decentralisation?
The exchange needs cryptographic objects to buy and sell and trade.

The ones who provide those objects (which, at launch, will probably include me) ought to be aware of the laws that will apply to them - whether in order to comply, or merely so that they know what the risks are if the country in which they live finds them out.

If there is something that will make Bitcoin succeed, it is growth of utility - greater quantity and variety of goods and services offered for BTC. If there is something that will make Bitcoin fail, it is the prevalence of users convinced that BTC is a magic box that will turn them into millionaires, and of the con-artists who have followed them here to devour them.
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March 19, 2013, 04:16:40 AM
 #89

I don't think this is a big deal.  As already pointed out this is just a clarification of rules that are already in place and it was pointed out it only applies to over $1000/day.  

For practically everything but bitcoin and other cryptocurrencies. Bitcoin->$0.01, no MSB/MT=criminal.

oakpacific
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March 19, 2013, 04:21:03 AM
 #90

Hmmm, so if I just buy bitcoins, and do not resell them later, I am neither a money transmitter nor an exchanger and thus is not subjected to any regulation? OK, thanks government! BUY!BUY!BUY!

https://tlsnotary.org/ Fraud proofing decentralized fiat-Bitcoin trading.
repentance
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March 19, 2013, 04:26:25 AM
 #91

This is a "guidance" posting.  It's a summary of how FinCEN feels that the already-existing regulations apply to the situation.  In reality, nothing much has changed except for providing some clarity.  All that verification stuff is required and the fly-by-night folks have got some worrying to do.

I'm wondering how things like the Linden Labs stuff comes out of this.  They have centralized virtual currency with an administrator.   On the other hand, they have third parties doing conversions so they might be ok.

While it's true that it's a "guidance" statement, such statements generally indicate how they intend to apply regulations.  The validity of their interpretation of regulations is rarely tested because most businesses can't afford the cost of the legal challenges which would be required.  Services agree to civil forfeitures or to become licensed because the potential sanctions they would face if they lost a court challenge are absolutely staggering - in the millions of dollars per offence (and a single transaction can involve multiple offences).

We've possibly seen the end of the era of under-capitalised exchanges - and that's certainly not a bad thing.  Compliance imposes a significant administrative burden, though, and that may ultimately be reflected in fees charged by exchanges.

Quote
Hmmm, so if I just buy bitcoins, and do not resell them later, I am neither a money transmitter nor an exchanger and thus is not subjected to any regulation?

The transaction itself may be reportable by whoever sells you the Bitcoins, though.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
redbeans2012
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March 19, 2013, 05:19:18 AM
 #92

I don't think this is a big deal.  As already pointed out this is just a clarification of rules that are already in place and it was pointed out it only applies to over $1000/day.  

For practically everything but bitcoin and other cryptocurrencies. Bitcoin->$0.01, no MSB/MT=criminal.

You are saying that any bitcoin transaction for cash even if its 1 penny requires you to register as a MT? I dont see that.  If you stick to selling under 1k a day this doesn't effect you. 

Maybe I'm reading your thing wrong.
bitlizard
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March 19, 2013, 05:22:05 AM
 #93

So now I'm wondering; is anyone free to use bitcoin? Or, is it only for those granted special permission by FinCEN to use in a specified way?  

I suppose if this community endeavors to interface with the establishment, it will have to get used to being constrained by its rules.  

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Stephen Gornick
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March 19, 2013, 05:27:19 AM
 #94

If you stick to selling under 1k a day

For clarity, that "$1K per-day" threshold is for use in determining if you would be considered a Money Service Business (MSB), and is not relevant in the discussion about whether or not an activity causes you to be considered a "money transmitter".

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No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

 - http://www.fincen.gov/financial_institutions/msb/definitions/msb.html

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March 19, 2013, 05:41:18 AM
 #95

If you stick to selling under 1k a day

For clarity, that "$1K per-day" threshold is for use in determining if you would be considered a Money Service Business (MSB), and is not relevant in the discussion about whether or not an activity causes you to be considered a "money transmitter".

Quote
No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

 - http://www.fincen.gov/financial_institutions/msb/definitions/msb.html

Wow you are correct.  Thats retarded.
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March 19, 2013, 05:54:14 AM
 #96

So now I'm wondering; is anyone free to use bitcoin? Or, is it only for those granted special permission by FinCEN to use in a specified way?  

I suppose if this community endeavors to interface with the establishment, it will have to get used to being constrained by its rules.  
The way I read these rules, the only people affected by it are
1) miners who sell their mined cryptocoins for fiat, and
2) third parties who transfer someone else's cryptocoins as part of an exchange of fiat (i.e. exchanges, BitPay, &c).

If there is something that will make Bitcoin succeed, it is growth of utility - greater quantity and variety of goods and services offered for BTC. If there is something that will make Bitcoin fail, it is the prevalence of users convinced that BTC is a magic box that will turn them into millionaires, and of the con-artists who have followed them here to devour them.
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March 19, 2013, 06:06:58 AM
 #97

The way I read this is that mining for bitcoins and selling those for USD is now illegal unless you are a corporation with the right licenses (which cost many thousands) and hundreds of thousands (or even millions) of dollars for bonding requirements, etc.
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Let's talk governance, lipstick, and pigs.


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March 19, 2013, 06:08:40 AM
 #98

After over four years this is the best they could come up with? This is so full of loopholes. Essentially this outlaws all barter and exchange of services. Nowhere does it mention any money. In fact, Bitcoin is not a virtual currency, it is getting help with a math problem. They will have to ban math tutoring. Perhaps the attack on the education system was planned all along.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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March 19, 2013, 06:13:04 AM
 #99

Anyone who thinks this is a good thing for bitcoin is in for a rude awakening.
I had my fingers crossed that bitcoin would get much further along before this happened.

+1

We are still too small to take on uncle sam just yet. Too much btc trade is concentrated in the US. Though as someone pointed out, this isn't a new law but rather FinCen clarifying what they think current regulations mean, we really need to get more decentralized such that uncle sam doesn't have us by the cojones.

Long Live BITCOIN!
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March 19, 2013, 06:18:52 AM
 #100

I'll just offer to sell bitcoin wallets instead of bitcoins then, after the sale is made I'll make a donation into their wallet.
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