THE PLEDGE

[Bruce Wagner]

I've made the following commitment to Bitcoin.   Can you make the following statement / pledge as well?

I hereby make the following three commitments:

(1)  All of my businesses (products or services I sell) will accept Bitcoin for payments as of now, and I will advertise that fact.  

(2)  I ONLY make donations in the form of Bitcoins.  If a benefactor wants my donation, I insist that they must accept it in the form of Bitcoin... until they do.

(3)  I act as a local Bitcoin-for-Cash (and vice versa) dealer for my local community, and I list myself as such (whether I chose to charge a transaction fee or not) on BitcoinBuy.com

If you can also make this pledge, to these three statements, for yourself...  please state so (as a reply) here.

UPDATE - So far, here are the pledgers posted:

• tyler
• Cryptoman

Did I miss anyone?

[tyler]

I hereby make the following three commitments:

(1)  All of my businesses (products or services I sell) will accept Bitcoin for payments as of now, and I will advertise that fact. 

(2)  I ONLY make donations in the form of Bitcoins.  If a benefactor wants my donation, I insist that they must accept it in the form of Bitcoin... until they do.

(3)  I act as a local Bitcoin-for-Cash (and vice versa) dealer for my local community, and I list myself as such (whether I chose to charge a transaction fee or not) on BitcoinBuy.com

[Cryptoman]

In terms of acting as a local exchanger, what does one need to do to avoid running afoul of the money exchanging/money laundering laws in the US?

[tyler]

In terms of acting as a local exchanger, what does one need to do to avoid running afoul of the money exchanging/money laundering laws in the US?

Deal in cash and avoid the police

[davout]

(1)  All of my businesses (products or services I sell) will accept Bitcoin for payments as of now, and I will advertise that fact. 

(2)  I ONLY make donations in the form of Bitcoins.  If a benefactor wants my donation, I insist that they must accept it in the form of Bitcoin... until they do.

(3)  I act as a local Bitcoin-for-Cash (and vice versa) dealer for my local community, and I list myself as such (whether I chose to charge a transaction fee or not) on BitcoinBuy.com

Dude, it's just a currency

[Cryptoman]

Ok, here's the relevant US Federal code (31 CFR 103.11):

(uu)  Money services business. Each agent, agency, branch, or office within the United States of any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the capacities listed in paragraphs (uu)(1) through (uu)(6) of this section. Notwithstanding the preceding sentence, the term "money services business" shall not include a bank, nor shall it include a person registered with, and regulated or examined by, the Securities and Exchange Commission or the Commodity Futures Trading Commission.

(1)  Currency dealer or exchanger. A currency dealer or exchanger (other than a person who does not exchange currency in an amount greater than $1,000 in currency or monetary or other instruments for any person on any day in one or more transactions).

It looks like you're safe as long as you keep it to less than $1000 per customer per day.  As safe as you can be in a police state like the US anyway. 

I'll take the pledge and email you the details regarding location.

I hereby make the following three commitments:

(1)  All of my businesses (products or services I sell) will accept Bitcoin for payments as of now, and I will advertise that fact.

(2)  I ONLY make donations in the form of Bitcoins.  If a benefactor wants my donation, I insist that they must accept it in the form of Bitcoin... until they do.

(3)  I act as a local Bitcoin-for-Cash (and vice versa) dealer for my local community, and I list myself as such (whether I chose to charge a transaction fee or not) on BitcoinBuy.com

[Anonymous]

Starting next year if you do more than 200 transactions a year through paypal they will report you to the feds.

http://www.auctionbytes.com/cab/abu/y210/m03/abu0258/s03

So how is that going to affect things?

[breandan81]

If (possibly a big if) bitcoins are seen as any other good to be bought and sold, which they should be, this only makes paperwork a bitch.  You will get a 1099 from paypal if you exceed 200 transactions or 20k dollars, you then file this with your taxes, and report any income earned under the "other income" line, or if applicable file self employment taxes on the income.  This has always been the law, it's just the forms are (probably) going to start being issued.  Everyone is expecting the 1099 changes to be seriously toned down before they go into effect though, given the outcome of the recent election and an uproar from small business owners.  To my knowledge, and I base this on a brief unofficial chat with a CPA I know, doing business in bitcoins is considered barter.  As long as you report whatever your final income is honestly (ie bitcoins are not zero, if you sell a product that you would retail at 14.99 for 45 BTC you declare 14.99 as the value of the sale) it doesn't matter what you are selling.  Bitcoins are just a commodity which has traits that make it easy to barter with, when you convert back and forth between bitcoins and dollars you are buying and selling the bitcoins as items, and if you charge a fee you declare that as income.  Keep books just as if you were in any other business and I think you are not violating the law.  I don't fully understand how the money services stuff comes into play, but to be safe I would avoid transactions over 1000 dollars per person*day.  If anyone has more information on that I would be interested, because it seems to me that bitcoins are not a currency, if say we were trading tulip bulbs as currency would that be a problem over 1000 dollars a day?  I can sell most tangible goods, software licenses, services, at more than that without it being money laundering.  Does anyone know what makes bitcoin different from a legal perspective?

[Bruce Wagner]

I am not a lawyer.  But the following is how I understand things to work.  I believe that...

Bitcoin is not legally considered a "currency".   No, no, no.  It's not like Canadian Dollars, or Euros, or Pesos.  Those are legally considered "currency".

Selling Bitcoin for cash is (LEGALLY SPEAKING) equivalent to selling Farmville virtual seeds....., or Angry Birds virtual air strikes.  

LEGALLY SPEAKING, it is not money -- it is "virtual merchandise".  The worst thing they could claim -- legally -- in the US, is... that you are selling something without charging and paying sales tax.  Like, pretty much every gargage sale and craigslist sale and lemonade stand.... for the past 200 years... in the USA.

IMHO, I think you have nothing to worry about if you are doing less than $1000 a day in Cash for Bitcoin transactions.   And, if you're doing it in both directions, you are actually just "refunding" the cash from one person... to someone else... in a sense.

Also, keep in mind that you can certainly set your own "terms" for selling Bitcoin for cash... and/or cash for Bitcoin.   For example, you set the transaction fee %... and you can set a daily limit dollar amount...  and/or a dollar amount limit per transaction...   In fact, your sales can totally depend on the "inventory" of bitcoins (or cash) you have on hand...

PS - For item (3) of this Pledge, please note that I am referring to CASH for BITCOIN...  Nothing else.  PayPal regulations do not apply.   Let's please keep this thread on topic. Thanks. 

[breandan81]

Thanks, that's pretty much how i understand it too.

[nelisky]

PS - For item (3) of this Pledge, please note that I am referring to CASH for BITCOIN...  Nothing else.  PayPal regulations do not apply.   Let's please keep this thread on topic. Thanks. 

You have my sympathy, but isn't keeping the threads on-topic against forum regulations or something? I speak out of experience only

[Bruce Wagner]

You have my sympathy, but isn't keeping the threads on-topic against forum regulations or something? I speak out of experience only

I'm a rule-breaker.... a rebel.... at heart.   

[Stephen Gornick]

Starting next year if you do more than 200 transactions a year through paypal they will report you to the feds.

http://www.auctionbytes.com/cab/abu/y210/m03/abu0258/s03

So how is that going to affect things?

On the merchant's side, if they always reported the revenue, this change requiring the merchant account processer to file a 1099-K shouldn't affect things at all. :-)

There's nothing saying the processor won't send out a 1099-K for every merchant either, regardless of how many transactions or what amount those transactions added up to.

That reporting requirement begins for transactions occurring January 1, 2011 and later.  This may be a catalyst that drives some sellers to request payment in Bitcoin.

But does that mean each Bitcoin recipient in the U.S., being P2P, is a "processor"?  Let's say Ubitious were  U.S.-based, and I send them 0.02 BTC each day in 2012 for Kiba's art http://bitcointalk.org/index.php?topic=1929.0.  Does Ubitio.us then need to send me a 1099-K?  Ha..., I hope not.  There are exemptions for "Single retailer, private cards", so I would surely hope Bitcoin is exempted.  

Additionally, there is a separate 1099 issue. As part of the health reform (Afordable Care) legislation there's yet another requirement that goes into effect for transactions beginning January 1, 2011.  At the end of the year, a business will be required to file a 1099-Misc for every individual and business to whom they've paid $600 or more, in total, during the year.  [This requirement is likely to get pushed back or repealed, however.]

I don't believe it matters any differently whether those payments were in USD or BTC.  If the value was $600 worth in a year -- you gotta file.

I wonder which accounting software will be the first to include the currency symbol BTC.

[bober182]

I will take the pledge expect for the cash exchange part as I wish to remain a bit more anonymous.