Bitcoin Attorney Will Answer All Questions:

[AttorneyBitcoin]

Thanks for taking the time to answer our questions here.

I have asked this question here some time before but was not able to get much help. When running a bitcoin exchange site, do I need to follow the bitcoin regulations of the countries of all the site's users?

I was looking at localbitcoins.com which is based in Finland but does not engage in trade with New York residents because the site does not comply with the New York bitlicense. This is what really puzzles me; does a non-US based company need to comply with US law (register as MSB and comply with FINCEN etc..) in order to trade bitcoins with US citizens/residents?
Considering that the company has no physical presence in the US I don't understand why localbitcoins needs to comply with the laws of US states.

 

I don't recall your asking your question to me. You may have asked others but that has nothing to do with me. Your question are very broad and cannot be answered simply. Do you currently run a BTC exchange site or are you contemplating doing the same? If you are currently running a BTC exchange then please PM me for private discussion.

It is my understanding that a non U.S. based company, just like a U.S. based company, must comply with U.S. laws both Federal and State. That is a very general answer. Depending upon the laws of a given U.S. State and depending upon how the Bitcoin business operates there may or may not be state regulations to follow.

I hope that helps.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

[1713983036]

1713983036

[1713983036]

1713983036

[1713983036]

1713983036

[btc junkie]

I don't recall your asking your question to me. You may have asked others but that has nothing to do with me. Your question are very broad and cannot be answered simply. Do you currently run a BTC exchange site or are you contemplating doing the same? If you are currently running a BTC exchange then please PM me for private discussion.

It is my understanding that a non U.S. based company, just like a U.S. based company, must comply with U.S. laws both Federal and State. That is a very general answer. Depending upon the laws of a given U.S. State and depending upon how the Bitcoin business operates there may or may not be state regulations to follow.

I hope that helps.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

I am only contemplating running a BTC exchange site and the question was asked before to the forum, not to you specifically. I find it confusing why an online business with no physical presence in the US is is suddenly subject to federal and state laws simply because US residents use the site to trade. Does this apply to other countries as well? If so, then I would need to be registered as a money services business or the equivalent in practically every country in the world.

[AttorneyBitcoin]

I don't recall your asking your question to me. You may have asked others but that has nothing to do with me. Your question are very broad and cannot be answered simply. Do you currently run a BTC exchange site or are you contemplating doing the same? If you are currently running a BTC exchange then please PM me for private discussion.

It is my understanding that a non U.S. based company, just like a U.S. based company, must comply with U.S. laws both Federal and State. That is a very general answer. Depending upon the laws of a given U.S. State and depending upon how the Bitcoin business operates there may or may not be state regulations to follow.

I hope that helps.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

I am only contemplating running a BTC exchange site and the question was asked before to the forum, not to you specifically. I find it confusing why an online business with no physical presence in the US is is suddenly subject to federal and state laws simply because US residents use the site to trade. Does this apply to other countries as well? If so, then I would need to be registered as a money services business or the equivalent in practically every country in the world.

I cannot advise on other countries but in my opinion, if someone wishes to do business in the United States then they are availing themselves of the resources of the population, which are considerable, because, among other reasons, we all pay taxes to support our currency, our military, our freedoms and safety in most areas of life, which creates an environment that is conducive to making money. Businesses pay taxes as well as individuals. If a person does not want to do business here they can do business in other countries and not have to worry about the laws, regulations and taxes of this country.   

[cashintor1]

Hi and respect!

What about the current definition of BTC in most of the states? Is it an asset or a currency?

Thank you!

[j753k]

Hi there, could you please tell me if it is legally possible to run a sports betting website that only accepts bitcoin if I reside in the US?

If so, could you please provide what would be necessary, such as hosting the website in another country, blocking US players, etc,

Thank you!

[AttorneyBitcoin]

Hi there, could you please tell me if it is legally possible to run a sports betting website that only accepts bitcoin if I reside in the US?

If so, could you please provide what would be necessary, such as hosting the website in another country, blocking US players, etc,

Thank you!

It just won't work as sports betting, as far as I know, is only legal in Nevada. It does not matter that you are dealing only in BTC, they will shut you down. If it is a business in the U.S. and if you are only doing business in other countries, well, I just don't really know the answer to that. Any input from anyone else out there?  You could hire an attorney to investigate it but I am not hopeful that the news would be good. Now, you could possibly run one just in Nevada, for Nevada residents only, and try to get approval from the Gaming Control Board.

There is a new law in Nevada where you can accept money from out of state into a business entity, that does sport betting. But you cannot tell the investors what you have wagered on until after you have placed the bets. In addition you need to get a sports book to accept your business entity as a customer, not an easy thing to do. If you want to talk to me more about this venture PM me here please or call my office.

I cannot advise you on the legalities in other countries, it is outside of the scope of my practice.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

[AttorneyBitcoin]

Hi and respect!

What about the current definition of BTC in most of the states? Is it an asset or a currency?

Thank you!

What a great question! Hell, I don't know! Lol! Most of the regulators are not sure either. It is definitely not considered a currency in any state as far as I know. It is not defined at all in some states. Other states hold it to be personal property. I have not read the laws in New York, theirs is the most developed.

If you could give me some context it would help. You can also search State Attorney Generals statements on Bitcoin.

Hope that helps.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

[cashintor1]

OK thank you for taking the time to answer such a question!



Respect!

Hi and respect!

What about the current definition of BTC in most of the states? Is it an asset or a currency?

Thank you!

What a great question! Hell, I don't know! Lol! Most of the regulators are not sure either. It is definitely not considered a currency in any state as far as I know. It is not defined at all in some states. Other states hold it to be personal property. I have not read the laws in New York, theirs is the most developed.

If you could give me some context it would help. You can also search State Attorney Generals statements on Bitcoin.

Hope that helps.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

[johnny_day]

Are business that accept Bitcoin as payment subject to KYC regulations? For example, if I go to the store and pay with cash they don't receive any information about who I am. Does this hold true for Bitcoin as well? Or would they be required to get my identity?

To take it one step further, if I've created a point-of-sales solution that allows merchants to accept Bitcoin, am I subject to KYC/AML? Do I need to identify every user even if the funds don't go through me? I'll never touch the money, it will go directly from the customer to the merchant, I will simply provide software that allows that to occur seamlessly.

Thanks,
Johnny

[AttorneyBitcoin]

Are business that accept Bitcoin as payment subject to KYC regulations? For example, if I go to the store and pay with cash they don't receive any information about who I am. Does this hold true for Bitcoin as well? Or would they be required to get my identity?

To take it one step further, if I've created a point-of-sales solution that allows merchants to accept Bitcoin, am I subject to KYC/AML? Do I need to identify every user even if the funds don't go through me? I'll never touch the money, it will go directly from the customer to the merchant, I will simply provide software that allows that to occur seamlessly.

Thanks,
Johnny

As always, it depends. If the business that is accepting BTC as payment is a money service business, such as a check cashing store or a business that deals in a lot of cash, such as an automobile dealership or big nightclub, then these businesses are going to be subject to FinCEN regulations. It doesn't matter if it is cash or BTC. The degree of tracking and reporting varies and is dependent upon the amount of money for any given transaction; but they still must have a compliance program in place in one form or another.

As to your interesting software, it depends. If you are selling the software and that is the end of the deal, then no, you are not subject to compliance. If you remain involved in the transmission and are taking a fee for each transaction, then you might be. I would have to research that further. If you want to follow up on that PM me here please. Great questions.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

[erpbridge]

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.

[AttorneyBitcoin]

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.

Hello Sir:

I guess I have to say it is not fine. But let's analyze this a bit more. Most income received from most sources is taxable. There are some things that are exempt from income taxes such as inheritance, or income from tax exempt bonds; but if you receive income from BTC then you should declare it as such as part of your entire gross income.

But let's look a little bit closer. You did not state how you obtained the BTC. That is very important. Almost all costs spent in order to obtain the BTC are deductible from your entire gross income. For example; if you spent five hundred dollars on mining equipment, that equipment as well as the cost of electricity needed to run it are deductible. If you obtained the BTC as payment for services, then any costs associated with providing those services are also deductible.

I hope that helps. If you would like to give me more specifics I can analyze this further. 

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Lawyer for Bitcoin and Alternate Coins.

[gianni sperti]

Got a simple question:

Cashing out BTC from a BTC ATM that, as means of identification, requests your phone number, will indicate to some institutions that the person who own that phone number has to pay taxes on that?

How this BTC ATM works?

[erpbridge]

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.

Hello Sir:

I guess I have to say it is not fine. But let's analyze this a bit more. Most income received from most sources is taxable. There are some things that are exempt from income taxes such as inheritance, or income from tax exempt bonds; but if you receive income from BTC then you should declare it as such as part of your entire gross income.

But let's look a little bit closer. You did not state how you obtained the BTC. That is very important. Almost all costs spent in order to obtain the BTC are deductible from your entire gross income. For example; if you spent five hundred dollars on mining equipment, that equipment as well as the cost of electricity needed to run it are deductible. If you obtained the BTC as payment for services, then any costs associated with providing those services are also deductible.

I hope that helps. If you would like to give me more specifics I can analyze this further. 

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Lawyer for Bitcoin and Alternate Coins.

Thanks for the reply. Well its mostly money I get from campaigns or just helping people out online, hence not a lot of amount. I can however declare as btc obtained by helping people out with some modelling, and then justify money spent on the parts to make prototypes first.

Would that be enough to get it exempted ?

[AttorneyBitcoin]

Got a simple question:

Cashing out BTC from a BTC ATM that, as means of identification, requests your phone number, will indicate to some institutions that the person who own that phone number has to pay taxes on that?

How this BTC ATM works?

I suspect that it has much more to do with KYC or "Know Your Client" a common term used for complying with United States Treasury Departments anti money laundering concerns. Every entity dealing with potentially larger amounts of cash or cash as a business has reporting requirements. For example any transactions over $1,000.00 must be kept track of. In addition these businesses are supposed to show some sort of effort or procedure in place in collecting information on who they are dealing with. The more cash, the more information they want. A simple phone number likely means a relatively low amount of cash. If you go on Coinbase or Poloniex, the higher the amount of money you want to deal in the more information they want from you. I seriously doubt that asking you for a phone number has anything to do with taxation.

[AttorneyBitcoin]

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.

Hello Sir:

I guess I have to say it is not fine. But let's analyze this a bit more. Most income received from most sources is taxable. There are some things that are exempt from income taxes such as inheritance, or income from tax exempt bonds; but if you receive income from BTC then you should declare it as such as part of your entire gross income.

But let's look a little bit closer. You did not state how you obtained the BTC. That is very important. Almost all costs spent in order to obtain the BTC are deductible from your entire gross income. For example; if you spent five hundred dollars on mining equipment, that equipment as well as the cost of electricity needed to run it are deductible. If you obtained the BTC as payment for services, then any costs associated with providing those services are also deductible.

I hope that helps. If you would like to give me more specifics I can analyze this further. 

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Lawyer for Bitcoin and Alternate Coins.

Thanks for the reply. Well its mostly money I get from campaigns or just helping people out online, hence not a lot of amount. I can however declare as btc obtained by helping people out with some modelling, and then justify money spent on the parts to make prototypes first.

Would that be enough to get it exempted ?

It's not a matter of exemption, it is a matter of your overall tax picture. You can absolutely deduct money spent for parts for prototypes as a cost of business. This offsets from your income. You are getting the idea! 

[gianni sperti]

Got a simple question:

Cashing out BTC from a BTC ATM that, as means of identification, requests your phone number, will indicate to some institutions that the person who own that phone number has to pay taxes on that?

How this BTC ATM works?

I suspect that it has much more to do with KYC or "Know Your Client" a common term used for complying with United States Treasury Departments anti money laundering concerns. Every entity dealing with potentially larger amounts of cash or cash as a business has reporting requirements. For example any transactions over $1,000.00 must be kept track of. In addition these businesses are supposed to show some sort of effort or procedure in place in collecting information on who they are dealing with. The more cash, the more information they want. A simple phone number likely means a relatively low amount of cash. If you go on Coinbase or Poloniex, the higher the amount of money you want to deal in the more information they want from you. I seriously doubt that asking you for a phone number has anything to do with taxation.

For example, there are some BTC ATMs that for transactions up to US1500 require a phone number. However for transactions over US5000 they require your ID and a (your) phone number.

It's not really clear whether those transaction limits are meant by day, week, month etc. Nor it's clear if by transaction is just meant cashing out or the whole action of buying and selling BTC?

I have also noted that (ATMs) have a camera pointing to you, altough it's not clear to me whether they are recording at all the time or not?

If a person cash out their BTC on a regular basis from a BTC ATM after what amount of money this regular cash out can be seen as an income and become "prey" of the United States Treasury Department?

To answer to your last sentence "I seriously doubt that asking you for a phone number has anything to do with taxation."

Well, during this kind of transactions the phone number is needed as means of confirmation of the purchased or sale of BTC. However, if for example, every month you cash out US1500 from an BTC ATM, I guess the ATM owner will have to provide (also )your data to the United States Treasury Department, and they will start to investigate about you right from your personal information, i.e the phone number you provided, and maybe they have the image of your face throught the ATM and see if you declared to the USTD your extra income and therefore pay taxes on it?

[AttorneyBitcoin]

Yes, as a United States Citizen I pay my taxes. I'm not here to advise on how to avoid payment of taxes. In addition I'm not a C.P.A. nor am I a tax attorney. I have already given my opinion to you. If you want to explore it further then you would indeed need to hire a C.P.A. or a tax attorney to help you.

[johnny_day]

Thank you so much for replying to my question. I have one more question if you have the time!

Does providing a virtual currency -> virtual currency conversion service subject myself kyc/aml regulations? For example, letting users convert from Bitcoin to Ethereum and charging a small fee, do I need to identify the user? I would not be interacting with fiat currency.

[AttorneyBitcoin]

Thank you so much for replying to my question. I have one more question if you have the time!

Does providing a virtual currency -> virtual currency conversion service subject myself kyc/aml regulations? For example, letting users convert from Bitcoin to Ethereum and charging a small fee, do I need to identify the user? I would not be interacting with fiat currency.

That is a GREAT question. The answer is maybe, but I doubt it. It may depend upon how you structure the business venture. For example if you are acting as a business entity such as an LLC or a Corporation then you are more likely to need to comply. If you are doing it for yourself only then you are not handling fiat directly and it becomes less likely. Any fees you earn would be income subject to income tax, if the fees were in fiat that is. If not then when you convert the fee to fiat it then becomes taxable as income. Any costs and expenses would be deductible.

When  you say you collect a small fee, is the fee collected in a virtual coin? That would also remove you one step further away from being regulated as a money transmitter. You can PM me if you want to discuss further.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com