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Author Topic: Wait...Does the March 18th finCen legislation make it illegal to trade bitcoins?  (Read 3663 times)
amincd
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May 16, 2013, 12:26:49 AM
 #61

Others in the forum have said that miners who sell their BTC through exchanges registered as MSBs are fine.
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Every time a block is mined, a certain amount of BTC (called the subsidy) is created out of thin air and given to the miner. The subsidy halves every four years and will reach 0 in about 130 years.
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May 16, 2013, 12:33:27 AM
 #62

http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

so reading the guidelines. it is clear to me, that we do not have to worry.

Relax everybody, they just want to catch the people buying large quantities of World of Warcraft Gold, or Bitcoins.

They clearly made it into a regulation instead of a law, because they want casual people to use it for what it's intended for, buying stuff at your favourite merchant or buying virtual items...

they do not like people using it to launder money, from one location to another, the only way to do that is to exchange those bitcoins into cash, effectively your cash has just been cleaned, new cash new serial numbers to track.

though Bitcoin is a very bad option for that... the BlockChain ledger.

and don't forget the Guidelines apply to Fiat Currencies too... so if your exchanging money... they want to talk to you about your activities.

so your Golden, they want you to register, they want exchanges to comply, use virtual currencies freely, but please let us make sure you are legit, buy whatever you want, it's not illegal, exchange your currency, if they want to be dicks later, just don't do crazy 10,000 USD transactions.

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May 16, 2013, 12:46:22 AM
 #63

FinCEN's reach ends at fiat, there is nothing they can do if trade is done inter-system anyway, meaning one crypto to another.

If an exchange wants to convert BTC to USD, they must play by the rules or get shut down, just like any other USD exchange.


I still believe P2P exchange is a necessary move in terms of trading one coin for another, take that power away from places like Gox and leave them to handle fiat currency exchanges.

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May 16, 2013, 01:21:23 AM
 #64

FinCEN's reach ends at fiat, there is nothing they can do if trade is done inter-system anyway, meaning one crypto to another.

If an exchange wants to convert BTC to USD, they must play by the rules or get shut down, just like any other USD exchange.


I still believe P2P exchange is a necessary move in terms of trading one coin for another, take that power away from places like Gox and leave them to handle fiat currency exchanges.

agreed, we already have the technology to make a p2p exchange.

setup a Filezilla(ftp server) server and sell your items from home, use YaCy(p2p search engine). upload your directory to YaCy and boom your in business.

now if you need anonymity you'll need to run FreeNet and setup a page.

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chufchuf
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May 16, 2013, 11:49:40 AM
 #65

Also, it doesn't make it illegal to sell bitcoins, no one has actually clarified that I think.

You'd have to become an MSB if you sold dollars or pounds every time you went on holiday. There'd be a rush to buy duty free shit on the plane, from people that had foreign currency to spare.

MSB probably costs very little if anything. What probably costs a ton is, on exchanges all the official KYC documents that have to be filled out for each of your customers I don't know.
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May 16, 2013, 01:50:02 PM
 #66

Here is another article about the same issue:

http://www.forbes.com/sites/robertwood/2013/05/02/irs-takes-a-bite-out-of-bitcoin/

And here is a quote from the comments:

Quote
Part of this is incorrect. I’ve called FinCEN several times and discussed if “miners” need to register as a Money Service Business. They do not.

The act of running a Miner and collecting Bitcoins is not a FinCEN concern. They want to know about the transfer between M1 and M3 types of money. Bitcoin is different than Facebook Points, Amazon dollars, or XBox points. They can be bought and sold for cash.

Anyone who uses LocalBitcoins.com must register. Anyone who runs a service like MtGox is a MSB. People who use MtGox are customers of a MSB and don’t need to register.

How will the IRS know if a profit is made using MtGox or Local Bitcoins? It’s likely that each individuals bank account will be flagged with AML alerts if there is a large ingress or egress of money. This triggers a FinCEN alert which might also go to the IRS.
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May 16, 2013, 01:56:26 PM
 #67

Also, it doesn't make it illegal to sell bitcoins, no one has actually clarified that I think.

You'd have to become an MSB if you sold dollars or pounds every time you went on holiday. There'd be a rush to buy duty free shit on the plane, from people that had foreign currency to spare.

MSB probably costs very little if anything. What probably costs a ton is, on exchanges all the official KYC documents that have to be filled out for each of your customers I don't know.

It can also require being bonded in certain states.

Also its unclear if you have to register in every state your going to do business in.

This is why that think company is suing mtgox, because they aren't reg'd as MSB in CA and thus its unfair for them to be able to compete there.

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May 16, 2013, 02:33:28 PM
 #68


The person selling BTC for USD is a money transmitter if that person mined the BTC. IF they bought, they are a user as well.


"7 How a person engages in “obtaining” a virtual currency may be described using any number of other terms, such as
“earning,” “harvesting,” ”mining,” “creating,” “auto-generating,” “manufacturing,” or “purchasing,” depending on
the details of the specific virtual currency model involved. For purposes of this guidance, the label applied to a
particular process of obtaining a virtual currency is not material to the legal characterization under the BSA of the
process or of the person engaging in the process.
"

This would seem to indicate that it does not matter how you obtain the coins.

QQCoin: QQSRP5u9yL7KtDAsGX7XmQ6QxHiA7BCGAv    doge: D8yy1FW5FdkoFCQP1nQeWGKX3ugcbegpJD

BTC: 15ExWcdDN38o852bC2jBEuC5igqp8gdtAK             EAC: eV9qafrM8uGaNzbvLXRCVVXkmmysUv7fud
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May 16, 2013, 02:56:20 PM
 #69

This is very possitive IMO. So under this regislation, bitcoin will mostly be used to be hoard or buy goods/services, and that is the most important step towards bitcoin's mainstream acceptance. When you can buy essntially everything on the planet with bitcoin, there is no need for an exchange

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