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Author Topic: FinCEN responds to clarification requests  (Read 8757 times)
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March 20, 2013, 09:40:47 PM
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Unlike traditional banking where clients have only a few account numbers, with Bitcoin people can create an unlimited number of accounts (addresses). This can be used to easily track payments, and it improves anonymity.
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March 20, 2013, 09:45:37 PM
 #2

Lets get Jon Matonis to send them an e-mail, lets see how thaey address that one!

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March 20, 2013, 10:36:15 PM
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Lets get Jon Matonis to send them an e-mail, lets see how thaey address that one!



If you have a question then send it to them as well.  If they get many questions they may be more likely to respond.  if they don't answer a list of unanswered questions may show their guidance is not clear enough to be enforceable if they ever try to prosecute.  These are serious penalties so FinCEN has a certain level of responsibility to answer clarification requests.  I have never been involved with any activities that would be a MT or MSB so I don't mind insisting on answers.

FinCEN already made a ruling in legalese. If you want an additional clarification, typically you'd need to ask a lawyer, and even that could potentially be a *different* opinion, especially in a court of law. If I were working for FinCEN, I'd shy away from giving blanket statements of the legality of things to a wordpress blog operator too. I doubt asking Jon would help much in this particular case.

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March 21, 2013, 06:16:14 AM
 #4

Some enterprising activists are creating services and means pf exchange that these desk jockeys never even imagined.

Let those necktie oxygen deprived fuckers know not to fuck with the Internet.
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March 21, 2013, 05:48:12 PM
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I would recommend contacting Timothy Lee or Jon Matonis at Forbes with your story of being denied clarification, and see if they can get a response, being from big financial media.

If the ruling is all that is published, it can be interpreted as a law, where you should get legal advice from a lawyer, and decisions on violations of the ruling will be made by a judge. Your lawyer would probably advise you not to get on FinCEN's radar. FinCEN is likely used to strong-arming big banks with their play-ball tactics into handing over unfettered back-door access to individuals, not dealing with the individuals directly. It is likely the "new" MtGox now includes a nice government portal for downloading customer transaction data.

The "Bank Secrecy Act" is the "your bank account is no secret to the government act". The secret is that telling people about it is punishable, and records are exempt from the freedom of information act.

Title 31 of the United States Code, section 5324, provides (in part):

    No person shall, for the purpose of evading the reporting requirements of section 5313 (a) or 5325 or any regulation prescribed under any such section, the reporting or record keeping requirements imposed by any order issued under section 5326, or the record keeping requirements imposed by any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508— [...] (3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.

Section 5324 further provides that a violation of this provision may be punished by a fine or up to five years in prison, or both.[6]

http://overlawyered.com/2012/04/structuring-who-can-get-away-with-it-and-who-cant/
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March 21, 2013, 09:53:29 PM
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easy rule to live by...

dont offer a person bitcoins for fiat for over $1000

so do $500 a day for each person and you don't have to worry about KYC Fincen rules.

just be sure you double check that one person doesn't create multiple usernames just to get around your daily limits

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Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
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March 22, 2013, 01:29:06 AM
 #7

We see this type of BS "guidance" in the self-defense rights movement all the time. California Department of Justice's Bureau of Firearms loves chilling the exercise by making shit up (formally called "underground regulation"). Gotta report their shit to the Office of Administrative Law, which overrules the underground regulations. Maybe there is a similar office to OAL charged with weenie-whacking corrupt bastards in the fed gov.

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March 22, 2013, 09:34:21 PM
 #8

I tried asking some questions via that email. I got a response stating 'I’ve forwarded your inquiry to our regulatory affairs division. You should hear back from them shortly.'

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March 23, 2013, 03:04:03 AM
 #9

The whole point of that report is to throw as much intelligible gibberish at the issue as possible so it's meaning has to be decided in the courtroom. That's when the stage will be set for the future and its not worth speculating on a wording that makes any sane person's brain itch. Your not supposed to understand it because its there for the legal vultures to spend months fighting over.

Along the same lines, I was just talking a lawyer friend of mine, and he mentioned FERC (Federal Energy Regulatory Commission) as an example of why you shouldn't read too much into something like the FinCEN guidelines.   He said that FERC is notorious for having a set of rules, publishing guidelines for following the rules, then slamming companies with millions of dollars in fines for violating the rules, even if they followed the guidelines exactly.  The reason?  "Well the guidelines are not the law, the law is the law, and it should be perfectly clear how to interpret them.  We're not sorry if you got it wrong." 

I asked what was the point of publishing guidelines at all if it offers you no legal cover for "misinterpretations" of the underlying laws?  He didn't have a good answer for me, other than they publish guidelines because of all the requests they get for clarifications.  Perhaps such clarifications can do more harm than good, giving actors a false sense of security about what they're doing.

I'd like to think there's more sanity in the world than that.  I'd like to think that the FinCEN guidelines gives you something legally-meaningful to use in self-defense in these cases.  It might be worth someone (probably a lawyer), doing a bit of research on the past cases involving FinCEN to look for precendents of this type.   You know it's true of FERC because of all the cases where this has happened... perhaps we can find similar evidence for FinCEN.  Perhaps, cases where a judge ruled in favor of someone following the guidelines instead of trying to interpret the law.  Or vice versa.

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March 23, 2013, 07:14:51 PM
 #10

Here is an interesting perspective from Russia on the US FinCEN

http://english.ruvr.ru/2013_03_22/Bitcoin-to-become-borderline-illegal-in-the-US/

Pretty much what I'd been saying.

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March 23, 2013, 07:38:40 PM
 #11

Good work Milly, also nice blog (bookmarked).

I fear we won't get any straight answers until the first person gets thrown in jail.



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March 24, 2013, 12:34:21 AM
 #12

You know it's true of FERC because of all the cases where this has happened... perhaps we can find similar evidence for FinCEN.  Perhaps, cases where a judge ruled in favor of someone following the guidelines instead of trying to interpret the law.  Or vice versa.

It would really be interesting if you could cite some actual examples with FERC where this has happened.

For the most part the rule of lenity applies, particularly if there is any prosecution that could result in jail time due to due process constitutional requirements.

The guidelines concept is used all the time in tax law with things like revenue rulings, private letter rulings, etc.

If an area of the law is unclear and guidelines have been issued and the party has attempted in good faith to follow those guidelines then it is going to be extremely difficult to prosecute that party and even if the trial judge rules against them it will likely be overturned by appellate judges..

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March 25, 2013, 07:13:06 AM
 #13

Has FinCen issued responses to anyone?

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March 25, 2013, 01:10:59 PM
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Like moths to a flame.
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March 25, 2013, 01:12:16 PM
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Like moths to a flame.

Meaning what, exactly?

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March 25, 2013, 02:17:33 PM
 #16

Like moths to a flame.

Meaning what, exactly?

People are listening (and bothering to care) what FinCEN thinks about something that was invented to avoid organizations like FinCEN from having any say in your money.

It's like being a drug dealer and asking the police where the safest areas to peddle are.

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March 25, 2013, 03:10:53 PM
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That's different because it's illegal to deal drugs. I'm all for a decentralized currency that's free from governmental control in issuing the currency, but, it still needs to play by the rules. I will operate my bitcoin transactions under the law, as I feel that you shouldn't be using it to evade taxes and use it for other illegal purposes (ie buying drugs, etc) in the first place. I don't support that.

Just like there are those that buy and sell drugs, there will be those that ignore FinCEN. More power to ya. I live in the US, so I will do what I need to do to stay legal.

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August 09, 2013, 07:48:56 PM
 #18

Did anyone ever get clarification on whether being a miner in the USA requires registration?
The fincen guidance from march 18th says:

' A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter. In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.'

I'm an LTC miner, and i convert LTC to BTC and I'm thinking of selling that BTC for USD thru campbx.
If I do that, I'm thinking I'm a user of the currency, and the exchange (campbx) is the money transmitter.
I'm not selling them to another person, I'm using an exchange to convert BTC to USD.

What do you guys think?
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August 10, 2013, 01:28:40 AM
 #19

I've been trying to pay very close attention to the legal status of anything related to bitcoin transactions, and it all seems like it's a gigantic grey area for the time being.  I've decided to put 20 % of any profit in a savings account and have it ready should they come knocking for capitol gains.  I have yet to find anyone who can give a solid answer to these questions at all, including FinCen. I think a lot of them don't know what to do because 90 percent of the financial "experts" said bitcoin would never make it.  I spoke with my lawyer which was totally useless (not surprised though) and will probably talk to a CPA should it become necessary.  I think your statement seems right on point, but the government doesn't care what I think.  Looks like there's plenty of room for some lawyer to make a name for himself defending bitcoin clients against Uncle Sam, even though there is no official law in place.  Our government designs laws with loopholes designed for the very people passing the laws as standard practice.  The outcome should be very interesting.   


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August 15, 2013, 04:26:33 AM
 #20

Did anyone ever get clarification on whether being a miner in the USA requires registration?
The fincen guidance from march 18th says:

' A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter. In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.'

I'm an LTC miner, and i convert LTC to BTC and I'm thinking of selling that BTC for USD thru campbx.
If I do that, I'm thinking I'm a user of the currency, and the exchange (campbx) is the money transmitter.
I'm not selling them to another person, I'm using an exchange to convert BTC to USD.

What do you guys think?
Most of exchanges simply match your offer to buy or sell coins to another individual's offer to sell or buy coins. They facilitate the trade between the two of you. They don't buy and they don't sell coins.

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