Thanks for all the information and help you guys have suggested, this is still something that I will look into following your guidance.
One question, BTC in the UK is classed as Property and not a Currency (Legally) from what I've read around. Therefore, surely this isn't covered by the Consumer Credit License?
Apologies for, Maybe, a Dum Question!
I can't tell you that for sure - a lot depends. I mean, if you are lending anything other than cash (or something with a readily convertible cash value) then you are creating a bailee / bailor relationship as another poster pointed out. In that relationship, the responsibility is normally that the item is going to be returned to you in substantially the same condition, or with some changes. An example is when you hand over your fur coat to the cleaning shop, and then they hand it back to you cleaned and with new buttons or whatnot).
The US FinCEN has classified Bitcoin as a value transfer system, and classed businesses dealing with them as money transmitters. That may be viewed as persuasive here in the UK, but it's certainly not binding. I think the biggest thing to recognize is that the treatment of bitcoin is changing rapidly, and that if you are viewing it as money and describing yourself as a debt collector... You are, in the eyes of the law, a debt collector.
The law is in many cases less technical and more broad than many people think it is. If you owe a debt of carrots to someone and that someone hires a third party to hit you in the kneecaps and demand the repayment of that debt, would you honestly expect a magistrate to agree that this was not a "debt collection" activity as described in the above legislation?
If you're going to put yourself forward as collecting debts, you are in all likelihood going to be viewed as collecting debts. Even if you are really "reclaiming borrowed property", you are holding yourself out as a debt collector. In the same breath you are then claiming that debt collection rules do not apply to you. You may also be subject to the requirements imposed on bailees / bailors or repossession people or whatnot. But if it is your aim to avoid falling within the scope of existing legislation regarding debt collections, you should definitely refer to yourself as something else. Don't rely on the technical definition of the property in question, particularly when that definition may be subject to short-term change.
As above, there's a difference between what you might be able to "get away with" and what you are in fact permitted to do. I agree that bitcoin isn't currency, but neither is a traveller's cheque. However the subject of the trade (in most cases) is the "value" underlying either the bitcoins or any financial instrument. So it wouldn't take a huge stretch to say "True, bitcoins are property, but they are property generally used to to stand in for or facilitate trade of currency. Thus they are either cash or for our purposes a readily-negotiated monetary instrument. Mr. Debt Collector holds himself to be reclaiming the value rather than the coins, as he is willing to take settlement in USD or GBP also. Thus, irrespective of the substance of the original agreement, he should fall within the scope of the Consumer Credit Act." It could go any number of ways, that's just an example.
This is totally empty conjecture, and I am in no way saying that it WILL go this way. I'm just saying that you can't ignore the law when you are doing one thing (transferring value / exchanging money) in a new way enabled by technology or whatever. The view of the common law hasn't caught up yet, but the bigger this thing gets the faster it will want to catch up.
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