Mt. Gox is an unlicensed money exchanger dealing in "crypto-currency."

[Qoheleth]

How does anybody need a license to transfer money period. At this point you basically can't do business without transferring money.

FinCEN requirements, by my understanding, are concerned primarily with businesses which transfer money on behalf of other parties. If Alice transfers money to Betty to pay her for goods or services, neither Alice nor Betty is an MSB from FinCEN's point of view. But if you add an intermediary (let's call her Catherine) who takes money from Alice and gives it to Betty, and does that sort of thing commercially or in large volumes, then Catherine is an MSB and subject to regulation (because if Catherine wanted, and didn't have anyone watching, it'd be easy for her to hide questionable money in the cloud of transfers which she manages).

This LLC of Mark's is a separate entity from Mt. Gox, and is also a separate entity from all of Mt. Gox's users, right? So it's a third party which is, in large volumes, transferring money between Mt. Gox and its customers on their behalf. Thus, it's an MSB and subject to regulation.

[myrkul]

How does anybody need a license to transfer money period. At this point you basically can't do business without transferring money.

FinCEN requirements, by my understanding, are concerned primarily with businesses which transfer money on behalf of other parties. If Alice transfers money to Betty to pay her for goods or services, neither Alice nor Betty is an MSB from FinCEN's point of view. But if you add an intermediary (let's call her Catherine) who takes money from Alice and gives it to Betty, and does that sort of thing commerically, then Catherine is an MSB and subject to regulation (because if Catherine wanted, and didn't have anyone watching, it'd be easy for her to hide questionable money in the cloud of transfers which she manages).

Still stupid, unnecessary snooping.

[awakening]

I'll just leave this here...

http://evewho.com/pilot/MagicalTux

WTF is evewho ?

[myrkul]

I'll just leave this here...

http://evewho.com/pilot/MagicalTux

WTF is evewho ?

It's a whois site for EVE Online.

That's right, he named his real-world corp after his MMO one.

[N12]

I'll just leave this here...

http://evewho.com/pilot/MagicalTux

WTF is evewho ?

It's a whois site for EVE Online.

That's right, he named his real-world corp after his MMO one.

What did you expect from the Magic the Gathering Online Exchange?

[myrkul]

I'll just leave this here...

http://evewho.com/pilot/MagicalTux

WTF is evewho ?

It's a whois site for EVE Online.

That's right, he named his real-world corp after his MMO one.

What did you expect from the Magic the Gathering Online Exchange?

I'd like to say I'm surprised, honestly. But my momma didn't raise no liar.

[solex]

How does anybody need a license to transfer money period. At this point you basically can't do business without transferring money.

FinCEN requirements, by my understanding, are concerned primarily with businesses which transfer money on behalf of other parties. If Alice transfers money to Betty to pay her for goods or services, neither Alice nor Betty is an MSB from FinCEN's point of view. But if you add an intermediary (let's call her Catherine) who takes money from Alice and gives it to Betty, and does that sort of thing commerically, then Catherine is an MSB and subject to regulation (because if Catherine wanted, and didn't have anyone watching, it'd be easy for her to hide questionable money in the cloud of transfers which she manages).

Still stupid, unnecessary snooping.

This is enlightening:
http://contrariancompliance.com/2013/04/14/is-us-regulation-the-single-biggest-threat-to-bitcoin/

[awakening]

How does anybody need a license to transfer money period. At this point you basically can't do business without transferring money.

FinCEN requirements, by my understanding, are concerned primarily with businesses which transfer money on behalf of other parties. If Alice transfers money to Betty to pay her for goods or services, neither Alice nor Betty is an MSB from FinCEN's point of view. But if you add an intermediary (let's call her Catherine) who takes money from Alice and gives it to Betty, and does that sort of thing commerically, then Catherine is an MSB and subject to regulation (because if Catherine wanted, and didn't have anyone watching, it'd be easy for her to hide questionable money in the cloud of transfers which she manages).

Still stupid, unnecessary snooping.

This is enlightening:
http://contrariancompliance.com/2013/04/14/is-us-regulation-the-single-biggest-threat-to-bitcoin/

For me It looks like.. Goverment is a big pile of shit. Good post, sad one anyway.

[notlist3d]

I transferred to Dwolla from Mt. Gox yesterday.... now i see no bit coin and no money transferred from all this.

Any idea if i will ever see what was being transferred again?

Happy ending to story!!!   Morning in Japan time after i had emailed i got the USD amount back in my account!  Bought bitcoin's sent to another place lol.  So i even made a few extra bucks with coin going down from when i sold lol.

[myrkul]

I transferred to Dwolla from Mt. Gox yesterday.... now i see no bit coin and no money transferred from all this.

Any idea if i will ever see what was being transferred again?

Happy ending to story!!!   Morning in Japan time after i had emailed i got the USD amount back in my account!  Bought bitcoin's sent to another place lol.  So i even made a few extra bucks with coin going down from when i sold lol.

Very happy! So glad it didn't end the way I said it might.

[oakpacific]

Since when does guidance become law?

[solex]

Since when does guidance become law?

The guidance is meant to be interpreting existing law!

Turns out the legislators used a time-machine to go into the future, learn about cryptocurrency, but did not detail it openly in their legislation. However, FinCen found enough clues to detect this hidden wisdom and produce the detailed guidance needed to cover cryptocurrency.

So Mt Gox broke laws about cryptocurrency which existed before Bitcoin was created.

[oakpacific]

Since when does guidance become law?

The guidance is meant to be interpreting existing law!

Turns out the legislators used a time-machine to go into the future, learn about cryptocurrency, but did not detail it openly in their legislation. However, FinCen found enough clues to detect this hidden wisdom and produce the detailed guidance needed to cover cryptocurrency.

So Mt Gox broke laws about cryptocurrency which existed before Bitcoin was created.

Ha!
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=d5570d7646c5fc13fe1fa42a61d1dcf1&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.1.3.1

See here: "(m) Currency. The coin and paper money of the United States or of any other country that is designated as legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issuance. Currency includes U.S. silver certificates, U.S. notes and Federal Reserve notes. Currency also includes official foreign bank notes that are customarily used and accepted as a medium of exchange in a foreign country."

As if they were worried that they were not clear enough that "currency" must be something issued by a government!

Onto a serious note: what you have said has just given more weight to the hypothesis that Satoshi is employed by the U.S government, that's why they knew!

[solex]

Since when does guidance become law?

The guidance is meant to be interpreting existing law!

Turns out the legislators used a time-machine to go into the future, learn about cryptocurrency, but did not detail it openly in their legislation. However, FinCen found enough clues to detect this hidden wisdom and produce the detailed guidance needed to cover cryptocurrency.

So Mt Gox broke laws about cryptocurrency which existed before Bitcoin was created.

Ha!
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=d5570d7646c5fc13fe1fa42a61d1dcf1&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.1.3.1

See here: "(m) Currency. The coin and paper money of the United States or of any other country that is designated as legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issuance. Currency includes U.S. silver certificates, U.S. notes and Federal Reserve notes. Currency also includes official foreign bank notes that are customarily used and accepted as a medium of exchange in a foreign country."

As if they were worried that they were not clear enough that "currency" must be something issued by the government!

Indeed. Despite their efforts to cover everything they omitted to cover the situation of a foreign currency not issued by any government. They also assume that it is coin or paper. FinCen have performed a herculean job in concluding cryptocurrency is included in this definition.

[DeathAndTaxes]

Ha!
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=d5570d7646c5fc13fe1fa42a61d1dcf1&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.1.3.1

See here: "(m) Currency. The coin and paper money of the United States or of any other country ...

You can't just look at one tiny section of the code.  The money transmitter definition is more broad (one could argue overly broad) and thus covers more than just currency.

5) Money transmitter —(i) In general. (A) A person that provides money transmission services. The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. “Any means” includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system;

FinCEN guidance assets that virtual currencies (even decentralized ones like Bitcoin) fall under "other value that substitutes for currency".  Now the definition is painfully broad and you could argue in court that Bitcoin does NOT meet that definition.

The definition is there.  The definition is the regulation.  FinCEN guidance is there way of saying "when we take you to court this is what we are going to argue".  You can disagree but ultiimately at the end of the day what matters is what the guy in robes thinks.  If he agrees with FinCEN that Bitcoin is "other value that substitutes for currency".  The the activity of exchanging virtual currencies falls under the definition of the MSB.  If he disagrees then the guidance has been overturned.  

Of course even if you won the next logical step would be to FinCEN in Congressional hearings to argue that their scope needs to be expanded to explicitly (by name) regulate the exchange of virtual currency.  If Congress then passed a law giving them that authority well you are right back at the beginning.


TL/DR version:
Do you think lawyers for the state (FinCEN) could convince a judge that Bitcoin is "other value that substitutes for currency"?  If so then you should heed their guidance.  If not then don't but you should EXPECT to end up in court as FinCEN has all but told you that is where you will end up.

[Coinbuck @ BTCLot]

Mt. Gox has just removed their official statement on Facebook about the DHS incident.

[pekv2]

Ha!
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=d5570d7646c5fc13fe1fa42a61d1dcf1&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.1.3.1

See here: "(m) Currency. The coin and paper money of the United States or of any other country ...

You can't just look at one tiny section of the code.  The money transmitter definition is more broad (one could argue overly broad) and thus covers more than just currency.

5) Money transmitter —(i) In general. (A) A person that provides money transmission services. The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. “Any means” includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system;

FinCEN guidance assets that virtual currencies (even decentralized ones like Bitcoin) fall under "other value that substitutes for currency".  Now the definition is painfully broad and you could argue in court that Bitcoin does NOT meet that definition.

The definition is there.  The definition is the regulation.  FinCEN guidance is there way of saying "when we take you to court this is what we are going to argue".  You can disagree but ultiimately at the end of the day what matters is what the guy in robes thinks.  If he agrees with FinCEN that Bitcoin is "other value that substitutes for currency".  The the activity of exchanging virtual currencies falls under the definition of the MSB.  If he disagrees then the guidance has been overturned.  

Of course even if you won the next logical step would be to FinCEN in Congressional hearings to argue that their scope needs to be expanded to explicitly (by name) regulate the exchange of virtual currency.  If Congress then passed a law giving them that authority well you are right back at the beginning.

This is why I like deathandtaxes, good explanations. Clean and clear.

Pretty much, they're gonna do, what "they" want to do, regardless. Pitty they have such powers like so.

[esse83]

Mt. Gox has just removed their official statement on Facebook about the DHS incident.

That is astonishing - actually removing critical information after they posted it! My take on it is that they have noticed a substanstial amount of btc being transfered out. On the 6th of may there was about 178k btc for sale, then on may 15th about 150k - and today about 134k (for sale).

[Bitco]

FinCEN guidance assets that virtual currencies (even decentralized ones like Bitcoin) fall under "other value that substitutes for currency".  Now the definition is painfully broad and you could argue in court that Bitcoin does NOT meet that definition.

The statutory language refers to monetary instruments such as travelers checks and money orders.  It's arguable that bitcoin is not "other value that substitutes for currency".  If bitcoin is a substitute for currency, the same argument could be made about gold, silver, seashells, or just about anything else.  It's pretty clear that the law was not intended to apply that broadly.

This question will probably end up in front of a federal judge sooner or later.

[samson]

Mt. Gox has just removed their official statement on Facebook about the DHS incident.

That is astonishing - actually removing critical information after they posted it! My take on it is that they have noticed a substanstial amount of btc being transfered out. On the 6th of may there was about 178k btc for sale, then on may 15th about 150k - and today about 134k (for sale).

About 200k BTC have changed hands in the last 60 hours or so on MtGox so maybe they were sold and are now being held by someone who hasn't relisted them for sale.

For example I purchased about 800 BTC myself yesterday and I'm only a small holder. These BTC aren't listed for sale anywhere today but they were yesterday before I acquired them.

Also more importantly - they are still on MtGox in case I want to sell them again.

The reason people are removing sell orders and buying is because the price is expected to rise.