https://news.bitcoin.com/the-slow-criminalization-of-peer-to-peer-transfers/ Excerpt: Regulators use financial institutions such as banks to control the flow of wealth. The digital exchange companies that serve as “trusted third parties” are the main control points for bitcoin. That’s the point at which privacy is stripped from users, and the transfer of wealth can be closely monitored. For regulations to work, therefore, users must be herded toward trusted third parties who function as an arm of the government. Because peer-to-peer exchanges sidestep digital exchanges, the former are slowly being criminalized.
Sal Mansy should serve as a cautionary tale.
Criminalizing Localbitcoins Exchanges
On May 17, entrepreneur Sal Mansy of Detroit, Michigan plead guilty to violating Title 18, Section 1960 of the United States Code. The statute specifically refers to Section 5330 of Title 31 in the U.S. Code of Laws, which states, in part, “Any person who owns or controls a money transmitting business shall register the business…with the Secretary of the Treasury.”
Registration involves providing the feds with an impressive list of information which culminates with the vague catch-all statement, “such other information as the Secretary of the Treasury may require.” In short, both statutes forbid a business to act as a money service without obtaining government licenses and turning over any information demanded.
