FinCEN Ruling Requested for Bitcoin Mining

[Big Time Coin]

Then again, if he did hire a lawyer familiar with FINCEN regulation, and paid a handsome sum, what incentive is there, really, for that lawyer to get them to say that bitcoin mining is NOT regulated.  If he succeeds, all he succeeds in doing is losing a customer, a bitcoin miner that has no further need of his legal services.  There is an inherent conflict of interest with any lawyer experienced with finCEN regulations for MST or MSB in that if they win by getting bitcoin left unregulated, they lose for themselves and all their friends.

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[Micky25]

for me these rules are clear enough:

- mining = unregulated
- cashing out = regulated

all in between should be clarified by bitcoin foundation, I see this as one of their main tasks. IMO it's a waste of time and money when individuals try to do this.

[Littleshop]

One point is that it would be hard to FinCen to back up that a pool miner is doing a financial transaction.  A pool itself is bundling transactions together so while I don't agree they should be regulated there is room for FinCen to play.

[Micky25]

Bitcoin is simply a group of individuals pursuing their own interests.  There is no "ship" or other central authority.  The Bitcoin Foundation is simply a group of Bitcoiners who decided to call themselves a "Foundation" and they have no official status.    

In any case an e-mail sent by one person asking for a clarification is not going to change everything and there is ample opportunity for others to comment or seek their own clarifications.

It's great you take care of this, I just thought it should be handled by a central "authority" to reach consent for the whole community. If BF doesn't want or can not do this, we maybe should try to bring them this way.

One point is that it would be hard to FinCen to back up that a pool miner is doing a financial transaction.  A pool itself is bundling transactions together so while I don't agree they should be regulated there is room for FinCen to play.

As of my understanding, as long as a pool makes no conversions of Crypto Currencies (BTC -> LTC etc.) or exchanges to real currencies (BTC -> US$ etc.) and only sends the pro rata outcome of the mining itself, it's not regulated. But youre right, it's ambiguous and could be interpreted as transmission, though I doubt thats the stuff they're after.
Realized (cashed out) earnings of this activity (fees, donations etc.) have to be stated as income.

[Bitcoinpro]

for me these rules are clear enough:

- mining = unregulated
- cashing out = regulated

all in between should be clarified by bitcoin foundation, I see this as one of their main tasks. IMO it's a waste of time and money when individuals try to do this.

Does FinCEN have a representation on this forum yet ? or anyone employed by the organisation to speak in a kind of autonomous way?

[Bitcoinpro]

https://www.facebook.com/permalink.php?id=138401546325686&story_fbid=154657731366734

bitinstant exchanges fincen mtgox regulation united states US usa
FINCEN: Bitcoin Users Not Regulated, Exchanges Are

Government regulation has for a long time been a gray area for Bitcoin, both in the United States and elsewhere. Although we have seen a number of disparate government reports either simply talking about Bitcoin or providing a regulatory opinion on some aspect of Bitcoin exchange, to date we have not seen anything close to a conclusive statement on digital currencies from any government organization in any country in the world. The problem is a difficult one; nearly all laws to date that attempted to regulate online payments of any form have all assumed a central issuer, and in the case of Bitcoin it could be just as easily argued that everyone is an issuer or that no one is. Today, however, we have gained a much clearer picture of what regulation for Bitcoin will look like, as FINCEN just released a paper clarifying their position on virtual currencies, touching on the concept of “decentralized digital currency” in detail with Bitcoin clearly in mind.

[Bitcoinpro]

its all over twitter

https://twitter.com/search?q=fincen&src=typd

[suryc]

for me these rules are clear enough:

- mining = unregulated
- cashing out = regulated

I agree there guidance seems pretty clear cut, if you mine and use the coins for yourself or you buy coins and use them for yourself, it is not regulated.
Basically, it is the selling of the coins to individuals for USD that requires reporting as an MSB under Fincen.
At least that's how I read this:
http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

I have requested a hearing

http://cointext.com/fincen-hearing-requested-for-bitcoin-mining-clarification/

What clarification do you hope to get? What aspect of the existing guidance is unclear? Maybe I'm missing something.

[suryc]

for me these rules are clear enough:

- mining = unregulated
- cashing out = regulated

I agree there guidance seems pretty clear cut, if you mine and use the coins for yourself or you buy coins and use them for yourself, it is not regulated.
Basically, it is the selling of the coins to individuals for USD that requires reporting as an MSB under Fincen.
At least that's how I read this:
http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

I have requested a hearing

http://cointext.com/fincen-hearing-requested-for-bitcoin-mining-clarification/

What clarification do you hope to get? What aspect of the existing guidance is unclear? Maybe I'm missing something.

What I am saying is that if I cash out using an exchange that is already an MSB then there should be no additional regulation on me.  Under those specific circumstances I should be a Money transmitter I should not have to register as an MSB.

You're absolutely right on this point clarification is required. The existing guidance leaves room to interpret it either way, but I'm inclined to say you're right because using an exchange is not the same as selling to a "person" which is how the statute defines it.
It will be interesting to see how this develops further.

[Micky25]

In a fantastic post, DeathAndTaxes states:

.....cut
At the federal level there is no MT license, or specific MT registration. There is only a MSB registration.  When you register as an MSB you indicate the reason for MSB registration.  MT is one of those sub types.  A company declares all the regulated activity they are engaged in and as such a company can register multiple sub types.
.....cut

https://bitcointalk.org/index.php?topic=231099.msg2432003#msg2432003

[Bitco]

I have requested a hearing

http://cointext.com/fincen-hearing-requested-for-bitcoin-mining-clarification/

I have to agree with MSantori here.  This looks like it was written by someone without a clear understanding of the legal issues involved.

First of all, you can not request an administrative ruling on an issue that is the subject of an enforcement action or court case.  If you believe that the facts of your case are similar enough to Liberty Reserve that you would be affected by a ruling in that case, then you would need to make that argument to the court.

It really is not at all clear what you are requesting from FinCEN.  You bring up the issue of reversibility of payments.  Reversibility of payments is possible under the Electronic Funds Transfer Act.  The definition of electronic funds transfer under this act refers to "ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account".  I am not aware of any claim that bitcoin falls within this definition (and it pretty clearly does not).  The statement regarding Liberty Reserve indicates that FInCEN director Calvery thinks irrevocable payments are a bad idea, and this is used to bolster the argument that LR is laundering money, but nowhere does it state that irrevocable payments are per se illegal.

I would strongly suggest that you retain legal counsel and withdraw this request or amend it to address the specific factual circumstances that you are concerned about.  Your request in its current form is likely to be dismissed, and this will simply make it more difficult for you to get the answers that you seek.