Wait...Does the March 18th finCen legislation make it illegal to trade bitcoins?

[mjsbuddha]

While researching the whole Mt.Gox warrant thing I started reading the actual legislation that they are alleging Mt.Gox has violated. http://www.fincen.gov/news_room/nr/pdf/20130318.pdf

A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.
A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter. In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.

Does that mean anyone trading Bitcoins for USD is now breaking the law if they are not registered as a Money Service Business?!

[mjsbuddha]

I'm seriously not trying to spread any FUD here but unless I'm reading it wrong... ANYONE who sell Bitcoins or any other cryptocurrency for fiat money is now considered a 'Money Service Business' and has to register as such with finCen or be subject to the same sort of penalties as Mt.Gox, including fines and up to 5 years in prison.

For real... can anyone point out why I'm wrong on this one? I desperately want to be wrong.

[vesper39]

I'm pretty sure this deals with miners that CREATE bitcoins, thus creating currency. If you buy bitcoin with USD, you are not "creating" it, but merely trading.

[mjsbuddha]

Ok... that makes sense but still... every single miner having to register with finCen isn't much better.

[jackjack]

USA. Lol.

[tutkarz]

Ok... that makes sense but still... every single miner having to register with finCen isn't much better.

they cant check that so who cares.

[k3t3r]

ANYONE mwho sell Bitcoins or any other cryptocurrency for fiat money is now considered a 'Money Service Business' and has to register as such with finCen or be subject to the same sort of penalties as Mt.Gox, including fines and up to 5 years in prison.

For real... can anyone point out why I'm wrong on this one? I desperately want to be wrong.

Anyone = All people of all countries
FinCen etc blah blah = US of Amerika

[mjsbuddha]

still. even if it only applies to miners in the united states, isn't that a big deal? Am I the only one that thinks so? I almost fell out of my seat when I read that.

[leopard2]

And this is why scrypt coins are way safer than SHA256 coins, since the govt goons could control dedicated Asic hashers, but never GPUs.

[mjsbuddha]

And this is why scrypt coins are way safer than SHA256 coins, since the govt goons could control dedicated Asic hashers, but never GPUs.

It doesn't apply only to bitcoins. It's any currency generated by using computer power

[QuestionAuthority]

'merican are just ducks. As soon as you come in to land some government worker picks you off with their shotgun! LOL

[leopard2]

Hey read again. If you mine and sell for goods (say gold) you are fine. You just cannot mine and sell into USD directly. You could also mine and convert into LTC, for example. Then sell the LTC or the gold.

[morningtime]

The quote indeed applies to the US only.

Simply put: anyone in the US who mines Bitcoin and sells them for fiat currency is a 'money transmitter'.
Anyone who accepts Bitcoin and sells them for fiat currency is both a money transmitter and a money exchanger.

This law is clearly put in place for restricting Bitcoin. This is a hurdle for Bitcoin becoming mainstream, but also for Ripple or any other crypto-currency.

[leopard2]

And this is why scrypt coins are way safer than SHA256 coins, since the govt goons could control dedicated Asic hashers, but never GPUs.

It doesn't apply only to bitcoins. It's any currency generated by using computer power

You do not understand. Anyone who buys an asic buys it to create coins right? So they could come to your home and ask, what did you do with your coins? Sell them? Uh oh.

But if you buy a GPU it could just be for gaming. So GPU is not controllable.

[morningtime]

still. even if it only applies to miners in the united states, isn't that a big deal? Am I the only one that thinks so? I almost fell out of my seat when I read that.

It's a very big deal. It's basically the end of Bitcoin-to-USD-and-back. You will need an official -centralized- company to handle your Bitcoins from now on. My guess is that no company in the US will be able to do the paperwork for Bitcoin. So that's that: the end of Bitcoin in the US.

[jimafternoon]

It doesn't make it illegal, but you have to comply with the regulations.

[jimafternoon]

So that's that: the end of Bitcoin in the US.

lol no

[mjsbuddha]

Hey read again. If you mine and sell for goods (say gold) you are fine. You just cannot mine and sell into USD directly. You could also mine and convert into LTC, for example. Then sell the LTC or the gold.

Again, litecoin counts under this legislation just as much as bitcoin

[morningtime]

Hey read again. If you mine and sell for goods (say gold) you are fine. You just cannot mine and sell into USD directly. You could also mine and convert into LTC, for example. Then sell the LTC or the gold.

No, you cannot. If you convert BTC to LTC to USD in the US, then you are considered a 'money exchanger'. From now on, only centralized companies are allowed to handle Bitcoin exchanges. Such a company does not exist in the US. Or perhaps only CoinLab?

[morningtime]

It doesn't make it illegal, but you have to comply with the regulations.

Correct, but no individual is allowed to exchange Bitcoin in the US anymore. You have to be a registered Money Service Business. Currently there are none?