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

[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.

Please don't talk when you don't know shit about what you're saying

Agreed

Sorry if you have a truth allergy, I didn't realize.

Fact is, any US customer of BFL is a potential perpetrator and the goons could easily search their property, by just using the BFL customer list. Since Asics are not used for anything else than BTC mining, owning an Asic miner could be seen as probable cause. This threat would probably deter anyone in the US from owning Asics. If the rest of the world mines on Asic, this development would eventually put US miners out of business, if international Asic ownership is high. Even worse, the government could accumulate enough Asics for a 51% attack, if international Asic ownership is low.

With LTC or YAC, this scenario is impossible because it would be impossible to chase anyone owning a GPU or CPU. Not only are there too many GPUs and CPUs, but also these can be plausibly used for other purposes.

Generic hardware cryptos are much less vulnerable than dedicated hw cryptos.

Not sure why you react like this.

Were not debating the ability to ENFORCE the law. You can break any law as long as you don't get caught. Were talking about our legal obligation if we want to be a member of the general (non-shady) society, which means complying with the law.

[joesmoe2012]

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?!

Geez man, you should probably take a few minutes to read the warrant before making threads. Short answer: MtGox lied about being a transmitter of money on the "MSB Accounts, Identification of an MSB Customer" form.  That's the reason for the warrant.

I read the warrant. I'm not debating Mt.Gox at all here. Im trying to figure out exactly what portion of the bitcoin community is now legally obligated to register, like Mt.Gox tried (and apparently failed) to.

An unenforceable large portion of the BTC community as it currently stands.

From my understanding any miner who exchanges his generated BTC into fiat currency.

[joesmoe2012]

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

Please don't talk when you don't know shit about what you're saying

Agreed

Sorry if you have a truth allergy, I didn't realize.

Fact is, any US customer of BFL is a potential perpetrator and the goons could easily search their property, by just using the BFL customer list. Since Asics are not used for anything else than BTC mining, owning an Asic miner could be seen as probable cause. This threat would probably deter anyone in the US from owning Asics. If the rest of the world mines on Asic, this development would eventually put US miners out of business, if international Asic ownership is high. Even worse, the government could accumulate enough Asics for a 51% attack, if international Asic ownership is low.

With LTC or YAC, this scenario is impossible because it would be impossible to chase anyone owning a GPU or CPU. Not only are there too many GPUs and CPUs, but also these can be plausibly used for other purposes.

Generic hardware cryptos are much less vulnerable than dedicated hw cryptos.

Not sure why you react like this.

Were not debating the ability to ENFORCE the law. You can break any law as long as you don't get caught. Were talking about our legal obligation if we want to be a member of the general (non-shady) society, which means complying with the law.

Seeing as anybody who exchanges fiat for BTC other than for the sole purpose of buying something would be required to register as an MSB, and then potentially have to register in each state....It really is going to be difficult to comply.

New, specialized regulation is needed for this multi-million dollar daily volume currency is becoming widespread.

[freedomno1]

No not illegal recognized as virtual exchange only reported when converted to must pay taxes and declare individuals are not unless they are mining

[Sitarow]

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?

there is one in canada that is working with a MSB

cavirtex.com

[Mastergerund]

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

Please don't talk when you don't know shit about what you're saying

Agreed

Sorry if you have a truth allergy, I didn't realize.

Fact is, any US customer of BFL is a potential perpetrator and the goons could easily search their property, by just using the BFL customer list. Since Asics are not used for anything else than BTC mining, owning an Asic miner could be seen as probable cause. This threat would probably deter anyone in the US from owning Asics. If the rest of the world mines on Asic, this development would eventually put US miners out of business, if international Asic ownership is high. Even worse, the government could accumulate enough Asics for a 51% attack, if international Asic ownership is low.

With LTC or YAC, this scenario is impossible because it would be impossible to chase anyone owning a GPU or CPU. Not only are there too many GPUs and CPUs, but also these can be plausibly used for other purposes.

Generic hardware cryptos are much less vulnerable than dedicated hw cryptos.

Not sure why you react like this.

Actually, I have now obtained and read the original FinCEN document. http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf

A user is a person that obtains virtual
currency to purchase goods or services.⁷

And footnote 7 says

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.

The document also says:

A user who obtains convertible virtual currency and uses it to purchase real or virtual
goods or services is not an MSB under FinCEN’s regulations.

Long story short, if you buy bitcoins, mine bitcoins, etc. you are not subject to MSB regulations. Only if you trade in bitcoins, speculate in bitcoins, or make a business of buying and selling bitcoins to other users do you need to worry.

Having an ASIC does not make you culpable, and is not "probable cause" for anything illegal. Being BFL customer might be probable cause for gullibility, though.

[joesmoe2012]

if you mine the bitcoins and exchange them into fiat currency without the intent to purchase a specific thing, to me that's no longer being a user.


I thought that part was kinda vague thougth (specifically pertaining to mining).

[franky1]

simple answer. if your going to touch fiat... fincen want to know about you.

its not about bitcoin. its about the trading of a currency to fiat.

if it was purely about trading a virtual currency between each other. then all of you zynga games poker fans, world of warcraft and second life fans have more to worry about.

[leopard2]

Having an ASIC does not make you culpable, and is not "probable cause" for anything illegal. Being BFL customer might be probable cause for gullibility, though.

 

Now they just have to find a way to define what speculation is. So if a wallet contains more than 10 btc, is it for speculation? Does the owner need to prove, what he wanted to buy?

It seems as if some Fincen reps have smoked something they obtained from Silkroad, before they wrote that up  

I guess if you have the IQ of Satoshi Nakamoto you won't work for a government agency  

[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.

Please don't talk when you don't know shit about what you're saying

Agreed

Sorry if you have a truth allergy, I didn't realize.

Fact is, any US customer of BFL is a potential perpetrator and the goons could easily search their property, by just using the BFL customer list. Since Asics are not used for anything else than BTC mining, owning an Asic miner could be seen as probable cause. This threat would probably deter anyone in the US from owning Asics. If the rest of the world mines on Asic, this development would eventually put US miners out of business, if international Asic ownership is high. Even worse, the government could accumulate enough Asics for a 51% attack, if international Asic ownership is low.

With LTC or YAC, this scenario is impossible because it would be impossible to chase anyone owning a GPU or CPU. Not only are there too many GPUs and CPUs, but also these can be plausibly used for other purposes.

Generic hardware cryptos are much less vulnerable than dedicated hw cryptos.

Not sure why you react like this.

Actually, I have now obtained and read the original FinCEN document. http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf

A user is a person that obtains virtual
currency to purchase goods or services.⁷

And footnote 7 says

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.

The document also says:

A user who obtains convertible virtual currency and uses it to purchase real or virtual
goods or services is not an MSB under FinCEN’s regulations.

Long story short, if you buy bitcoins, mine bitcoins, etc. you are not subject to MSB regulations. Only if you trade in bitcoins, speculate in bitcoins, or make a business of buying and selling bitcoins to other users do you need to worry.

Having an ASIC does not make you culpable, and is not "probable cause" for anything illegal. Being BFL customer might be probable cause for gullibility, though.

+1 hope you're right

[gmannn]

From what I have read, you need to sell / exchange $1000 worth of BTC per day.  Under that and you are exempt from the licensing requirements.  I doubt that many miners here fall into that category. 

[joesmoe2012]

Not generate $1000 per day, sell / exchange 1000 per day, so if you generated a bunch then sold them all at once ...

[gmannn]

Not generate $1000 per day, sell / exchange 1000 per day, so if you generated a bunch then sold them all at once ...

You are correct.  If I sold that many at once it would most likely be at an exchange which is already compliant with fincen regulations (Damnit GOX), instead of a F2F cash transaction.  They'd send off reports of the sale to the appropriate revenue service and I would report capital gains and pay my taxes. 

[chufchuf]

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.

You made quite a few gigantic leaps in logic to reach that conclusion of a company to hold all the bitcoins forever not allowing anyone to put theirs in their own wallet.

[chufchuf]

This article says that registration is free

http://www.theverge.com/2013/3/20/4127506/bitcoin-foundation-new-us-rules-targeting-virtual-currencies-are

and that Mtgox was relying on Coinlab to be compliant in the U.S. So it must be that Coinlab wanted revenge, broke off and 5 seconds later the US govt saw their chance.

And why are some of you talking so much and then on page three of the thread we discover it's only people who exchange over 1,000 dollars a day that need to register? No wonder that's why quite a few interpreted it as being that only the exchange sites had to register.

[FloridaBear]

There is no "1,000 per day" threshhold to be considered a money transmitter:

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html

The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.

[chufchuf]

The govt using proof dating back 2 years when it just changed the rules a month ago? Perhaps that explains the legal counsel mtgox got.

And if the govt considers bitcoin a currency, how so if it's not legal tender anywhere? And to be coherent will it not tax speculator's profits?

[gmannn]

There is no "1,000 per day" threshhold to be considered a money transmitter:

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html

The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.

Honest question, does a 2 person exchange between USD and BTC count as a money transmission?  I thought transmitters were the middlemen in the business of moving money from A to B.

[chowderman]

There is no "1,000 per day" threshhold to be considered a money transmitter:

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html

The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.

Honest question, does a 2 person exchange between USD and BTC count as a money transmission?  I thought transmitters were the middlemen in the business of moving money from A to B.

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.

A person acting as the middleman between buyer and seller is a money transmitter and exchanger.

The person buying BTC is a user.

The $1000/day stipulation is regarding and exchanger exchanging two more or more foreign currencies up to $1000 total a day an MSB, The same definition states virtual convertible currencies are not included because they are not foreign currencies.

[gmannn]

There is no "1,000 per day" threshhold to be considered a money transmitter:

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html

The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.

Honest question, does a 2 person exchange between USD and BTC count as a money transmission?  I thought transmitters were the middlemen in the business of moving money from A to B.

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.

A person acting as the middleman between buyer and seller is a money transmitter and exchanger.

The person buying BTC is a user.

The $1000/day stipulation is regarding and exchanger exchanging two more or more foreign currencies up to $1000 total a day an MSB, The same definition states virtual convertible currencies are not included because they are not foreign currencies.

Thanks, this is clear now.  The 1000 limit does not apply.