The new FinCEN guidelines don’t do all that much to clear up the legal confusion about whether ordinary Bitcoin users who use the currency as a hobby or investment are subject to the regulations. They are not a strong endorsement of the currency. But neither do they evince any particular hostility toward the concept of decentralized virtual currencies. FinCEN is clearly trying, in its somewhat bumbling way, to squeeze a square technological peg into its round regulatory hole. Reading between the lines, FinCEN is saying that if Bitcoin-based businesses fill out some paperwork and collect some information about their customers, then they’ll be left alone.
By focusing on Bitcoin exchanges, FinCEN is signalling that it isn’t interested in regulating the core Bitcoin network, which allows ordinary users to exchange currency with one another. That will hopefully leave people at the core of the Bitcoin economy free to continue experimenting.
Personally I would have preferred to see FinCEN issue guidance stating that Bitcoin is completely exempt from regulatory requirements. But that probably wasn’t an option given the laws FinCEN is charged with enforcing. Given those laws, FinCEN’s guidance is probably the best Bitcoin fans could have hoped for: it sends a clear sign that America’s anti-money laundering regulators do not consider the currency a threat and isn’t going to try to force it to change or shut down.
