Everyone Panic. There's a lawyer among us. [FinCEN Walkthrough on p2]

[NewLiberty]

SECTION 10.

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

What two people contract amongst each other ought not be impaired by the state.

You're misinterpreting Art. I § 10, which is referring to the (currently 50) states.  Only Congress may "impair[] the obligation of contracts."  A legislative action doing such a thing is, for example, bankruptcy.  Even with respect to the states, the prohibition has never been absolute, and certainly is not now.

This section of the Constitution was drafted to prevent practices in which the states would either pass "private bills" relieving (usually) some wealthy person of his contractual obligations, or basically pass laws giving the property of foreigners to colonists, causing a fear by the Framers that this would scare away foreign capital.

Check Federalist No. 10 by Madison for a fuller explanation.

ETA:  Incidentally, not arguing your actual point, at least not here, just your citation.

Thanks for raising this.  Yes, little in the Constitution is absolute.  So much nuance and reinterpretations....

Its not so much a misinterpretation if you look at the question asked, though agree that it is very much a stretch.
Poster was looking for some general constitutional support for putting the breaks on this sort of FinCEN abuse, and there isn't much there on this matter.
So closest is Article 1 § 10, (which arguably limits the state part of FinCEN, even though congress authorized the Fed to delegate this to states),
Or 10th amendment, (which takes significantly more political action, rather than legal action)

This particular incident would not be one I'd pick to take to the supremes though, and constitutional matters end up there.

[1714939713]

1714939713

[grumpy619]

Just to be on  this..

[smith88]

Hi everyone. I'm a business attorney in New York City.  I've been involved in cryptocurrency for some time now.  I hope I can be of some help on this board.  I can't give you legal advice via posts, but if you PM me, we may be able to discuss the particulars of your business.

Full disclosure: There's no such thing as an expert or specialist in bitcoin law, and I am certainly not one.  I'm an attorney with experience in securities, civil fraud and other financial matters with particular emphasis in the tech realm.  There is almost zero judicial and legislative guidance out there for us practitioners, so many of us are trying to keep ourselves out in front of every new development as they arise.

I'm daily fascinated by what bitcoin is and what it can become, and I'm looking forward to becoming part of the community!

Welcome with open arms!  There are many among us and I am extremely happy to see folks working to gain a more authoritative stance on the legalities.  Most Bitcoiners (including myself) are tech/geek types (ok that is a sweeping statement but probably accurate)that have been developing hardware, software, ideas, science, math; their entire lives.  We are becoming business men & women; which is good but painful.  As you are probably aware.  I estimate 95% of the community is developing beautiful businesses and careers of some sort or another; all based upon cryptocurrency implementation.  The more wide spread acceptance in the US; the stronger the community will become.  I see legal advise extremely crucial in this time.  And thanks again.

[Bitco]

Its not so much a misinterpretation if you look at the question asked, though agree that it is very much a stretch.
Poster was looking for some general constitutional support for putting the breaks on this sort of FinCEN abuse, and there isn't much there on this matter.

What sort of FinCEN abuse?  What specifically have they done that violates someone's rights?

If you want a constitutional challenge, there would need to be something specific that you have a right to do, that FinCEN told you that you can't do.

[darkmule]

Its not so much a misinterpretation if you look at the question asked, though agree that it is very much a stretch.
Poster was looking for some general constitutional support for putting the breaks on this sort of FinCEN abuse, and there isn't much there on this matter.

What sort of FinCEN abuse?  What specifically have they done that violates someone's rights?

If you want a constitutional challenge, there would need to be something specific that you have a right to do, that FinCEN told you that you can't do.

Well, I'd say simply having to register to be able to sell BTC would be an issue.  FinCEN, as much as it has a lot of bad things at its disposal that it has not, in fact, done to date, has a fairly lengthy history of creating regulatory uncertainty and then suddenly prosecuting some practice that has been, to date, tolerated.  While I am not a full-bore anti-government loon by any stretch of the imagination, and in fact, FinCEN's public official statements to date have been actually pretty welcome and reasonable, there is still an environment of regulatory uncertainty.

In some senses, this is good.  Sometimes, you really don't want the government all that interested in what you're doing at the moment.  However, it makes it rather difficult for large-scale money and venture capital to make long term decisions when they are considering rolling out physical infrastructure and other things that can't be rolled back and turned back into money should the situation change.  A lot of the kind of tech necessary for large-scale investments in Bitcoin is going to be stuff that is useful for nothing other than Bitcoin.  Therefore, a big investment in this kind of stuff would be rendered worthless by sudden prohibitive actions by the government.  This scares away that kind of big money.

Personally, I don't think FinCEN has yet abused its position, with regard to Bitcoin anyway.  But the possibility of it doing so is always going to be a variable.

I think the probability that Congress would do something insanely stupid if it did anything with regard to Bitcoin is a reason to prefer the current situation.  But that doesn't eliminate the downside of regulatory uncertainty.

[Bitco]

Well, I'd say simply having to register to be able to sell BTC would be an issue.  FinCEN, as much as it has a lot of bad things at its disposal that it has not, in fact, done to date, has a fairly lengthy history of creating regulatory uncertainty and then suddenly prosecuting some practice that has been, to date, tolerated.  While I am not a full-bore anti-government loon by any stretch of the imagination, and in fact, FinCEN's public official statements to date have been actually pretty welcome and reasonable, there is still an environment of regulatory uncertainty.

AFAIK, FinCEN has never stated that you have to register to be able to sell BTC.

There have been some cases where people were charged with money laundering or running an unlicensed money transmitting business, and those cases involved selling BTC, but it wasn't alleged that selling BTC is illegal by itself.

There's a lot of nasty things that FinCEN potentially could do, but until they actually try it, there's not much basis to sue them.

[darkmule]

There's a lot of nasty things that FinCEN potentially could do, but until they actually try it, there's not much basis to sue them.

I certainly didn't suggest suing them.  Nobody I can think of would have standing to do it, since they haven't done anything and do not appear to be about to do anything.  I was just pointing out they're the 800 pound gorilla in the room.  May be calmly eating bananas at the moment, but you always worry maybe he'll decide to eat you instead.  So maybe you don't set up a lemonade stand 20 feet from him.

[c0dex]

There have been some cases where people were charged with money laundering or running an unlicensed money transmitting business, and those cases involved selling BTC, but it wasn't alleged that selling BTC is illegal by itself.

FWIW the guidance has, since last March - May, suggested that if you are selling BTC for USD as a business, you must register as an MSB with FinCen. Additionally, you might need the appropriate state licenses depending on the details.

If you're just doing small trades as a trader for yourself, and not as a business, you might not have to, but I would certainly talk to an attorney!

[darkmule]

If you're just doing small trades as a trader for yourself, and not as a business, you might not have to, but I would certainly talk to an attorney!

Attorneys charge money for talking with you.  Just this prices the cautious casual dealer out of the market, or forces them to charge exorbitant fees themselves.

Yet another example of the actual real-world costs of "regulatory uncertainty."  Such a vague-sounding phrase, but hits you right in the wallet in reality.

[Bitco]

I will point out that Tangible Cryptography (BitSimple) filed a request with FinCEN for an administrative ruling on the issue of whether an exchange between two individuals is money transmission, asserting that it is not.

https://bitcointalk.org/index.php?topic=224553.0

[darkmule]

I will point out that Tangible Cryptography (BitSimple) filed a request with FinCEN for an administrative ruling on the issue of whether an exchange between two individuals is money transmission, asserting that it is not.

https://bitcointalk.org/index.php?topic=224553.0

Thanks for pointing this out.  It is a good idea.  I hope it has good results.