Bitcoin Forum
November 19, 2017, 06:10:10 PM *
News: Latest stable version of Bitcoin Core: 0.15.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2] 3 »  All
  Print  
Author Topic: Filed a request for an administrative ruling with FinCEN this morning.  (Read 7041 times)
qwerty555
Sr. Member
****
Offline Offline

Activity: 405


View Profile
June 04, 2013, 03:04:55 PM
 #21

The guidance doesn't make "anyone" an exchanger because there is an explicit exemption for "users" purchasing goods and services who are not in the business of buying and selling currency, so I disagree on that point as well.

You miss the point.  Anyone who exchanges virtual currency for real currency is an exchanger is one way to interpret the guidance.   So say MtGox becomes a MSB.  Great now every on of MtGox clients would need to also.  They all are "exchanging virtual currency for real currency".  The guidance provides no exclusion that those exchanging with regulated exchangers are themselves exempt.  This would make anyone who ever has or ever will exchange real currency need to register as an MSB.  It seems implausible that is FinCEN intent however by the letter of the guidance it is what is stated.

The guidance is unclear, it is just my opinion but only clarity from FinCEN will resolve that lack of clarity for me.  That is the point of an administrative ruling. It certainly is possible that the AR will result in more clear guidance one that advises that the example in section c is not binding any such trade of BTC for USD constitutes an "exchanger".  The good news is it would remove ambiguity from the definition and force FinCEN to clean up their guidance. Is it FinCEN intent that anyone who ever buys or sells Bitcoins for real currency needs to register as a MSB? I really doubt it but if so the AR will require them to state so in black and white.


I suspect they will alter the wording to encompass anyone who buys or sells bitcoin for "real" currency (legal tender as defined by US law) no matter where or how they obtained them and remove the "creates" part which is confusing and open to challenge/ debate.

Individuals who have low value transactions for personal purchases of goods or services appear to be exempt . I assume that the $1000 threshold would not apply as what can you buy for $ 1000 these days??? Smiley

 The threshold to require registration as a transmitter will probably be clarified at  $1000 dollars. This begs the question is that $1000 per transaction or cumulative over a specified period? ie. if an individual for non commercial use buys or sell bitcoins for cash to values under $1000 ...no need to register as a transmitter.

This would be nice to get an answer to if you get a chance to follow up on any reply they make.
Any entity engaged in the BUSINESS of transmitting (for reward/payment) will definitely be covered with no minimum threshold.

Their response was that ANYONE who buys, then re-sells, etc IS A MONEY TRANSMITTER AND MUST FILE IF EXCHANGE OVER $1,000.
1511115010
Hero Member
*
Offline Offline

Posts: 1511115010

View Profile Personal Message (Offline)

Ignore
1511115010
Reply with quote  #2

1511115010
Report to moderator
1511115010
Hero Member
*
Offline Offline

Posts: 1511115010

View Profile Personal Message (Offline)

Ignore
1511115010
Reply with quote  #2

1511115010
Report to moderator
1511115010
Hero Member
*
Offline Offline

Posts: 1511115010

View Profile Personal Message (Offline)

Ignore
1511115010
Reply with quote  #2

1511115010
Report to moderator
Join ICO Now Coinlancer is Disrupting the Freelance marketplace!
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
SylTi
Member
**
Offline Offline

Activity: 108


View Profile
June 04, 2013, 03:09:02 PM
 #22


Thus by the letter of the guidance above this would be a regulated entity
BTC:  Person A -----> Exchanger ----> Person B
USD:  Person B -----> Exchanger ----> Person A
Here there is an acceptance of BTC from on person and transmission of BTC BTC to another person.

However by the guidance as written above, the following would not be regulated entity:
BTC: Person A ----> Buyer
USD: Buyer ----> Person A
There is acceptance of virtual currency by the buyer but no transmission to another person.  If this looks familiar to a certain company business model well that is the point.

So if it's confirmed this would basically mean that if and exchange become a market maker instead of just facilitating exchange p2p I would not require any kind of regulation ?

qwerty555
Sr. Member
****
Offline Offline

Activity: 405


View Profile
June 04, 2013, 03:17:11 PM
 #23


If you get PAID or make money then you WILL be regulated. If not under these regulations then under others.

THERE IS NO ESCAPE!!!!! LOL


Unless you operate in a clandestine parallel economy which answers to no one but also has no legal protection.

Which is what many believe bitcoin should be. We should decide one way or the other.
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
June 04, 2013, 04:09:27 PM
 #24

Individuals who have low value transactions for personal purchases of goods or services appear to be exempt . I assume that the $1000 threshold would not apply as what can you buy for $ 1000 these days??? Smiley

There is no threshold in MT regulation.  MT begins at the first dollar in money transmission unless any exception applies.  This goes beyond just virtual currencies and is the actual regs on the book.  I don't see that changing as it would affect non virtual currency money transmitters.
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
June 04, 2013, 04:43:57 PM
 #25

I'm glad you did this D&T. I hope they actually respond to this because it remains a head-scratcher. But, I'm not sure if they know the answer. Maybe they need the courts/congress to decide?

They don't need the courts or Congress to decide.  There are no laws on virtual currency at the Federal level.  The existing laws related to MSB are all here:
http://www.ecfr.gov/cgi-bin/text-idx?SID=4ed28aff321d97007276a7736cae032e&c=ecfr&tpl=/ecfrbrowse/Title31/31cfrv3_02.tpl

Look for section starting with 1010.
Section 1022 relates to MSB (and a MT is a type of MSB).
Section 1010 has definitions on various terms (including MSB & MT)
Section 1020 is rules for banks but some of those rules apply to MSB as well.

You will note the word "virtual" or "decentralized" don't appear anywhere in the actual law.  What FinCEN provided in April was guidance.  The simple version is that guidance is FinCEN way of saying "this is the way we interpret EXISTING law". No new law was created in April.  Not a single line of public code.    FinCEN has researched and reached the conclusion that EXISTING MT laws/regs apply equally to decentralized virtual currencies like Bitcoin.  The pages of guidance are a way of forcing a square peg (virtual currency exchangers) into a round hole (money transmitters).  However FinCEN didn't pass any new law and their guidance is just that guidance.  If you disagree you certainly can ignore it (I wouldn't without legal counsel) and if/when FinCEN takes you to court they will layout a case according to that guidance.  Now remember again guidance isn't law.  Ultimately a judge however is either going to agree with FinCEN or they won't.  If they do well you might be going to jail and if they don't then the guidance isn't worth the paper it was written on.

Sadly this process could have be avoided. Canada's regulator for example hasn't said they "don't" want to regulate virtual currencies like Bitcoin instead they looked at existing regs and rather than trying to do some legal gymnastics to make the existing law fit a new scenario declared "nope the existing laws don't cover this".  Now does this mean in Canada Bitcoin can not and forver shall not be regulated?  Of course not.  It simply means the LEGISLATURE in Canada (aka the elected body who's duty it is to pass laws) will need to pass new laws if and when they want to regulate virtual currencies. Those laws won't need complicated legal gymnastics and pages of guidance because the laws will be written specifically for Bitcoin.   The US Congress & FinCEN "could" have done the same thing.  There are six categories of MSBs.  Congress could have given FinCEN the authority to create new one "virtual currency dealer" or expanded the scope of "currency dealer" to include virtual currencies.  Of course that process would be much slower, it would rely on the will of the people (though their elected officials).

The reason the guidance is nonsensical is because it is trying to apply regs written for one entity onto another entity.  As an analogy imagine when the first passenger plane was built, there were no regs on passenger travel by aircraft.  Of course there were regs on cars.  The FTA at the time could have said.  "well planes need regs and it is outside our Congressional authority so planes are cars.  All regs on cars apply to planes".  Of course that would create a lot of confusion given that for example planes don't (normally) travel on highways, have turn signals, etc.  So the FTA could have provided pages and pages of guidance, creating from whole cloth entire new terms, definitions, and scenarios to try an fit a plane into the regulatory structure for cars.  Thankfully they didn't.  New regs were created dealing specifically with aviation.

TL/DR:
Guidance is FinCEN way of saying "this old law applies to this new stuff and here is how and why".
FinCEN doesn't pass laws so you are free to disagree.
One should expect to find themselves in court if your interpretation and FinCEN interpretation are not in alignment.
Depending on how strong your case is this could be a very good thing or a very bad thing.
Only legislature can pass new law and ultimately the courts will decide if the law is applicable.

Stephen Gornick
Legendary
*
Offline Offline

Activity: 2324



View Profile
June 04, 2013, 06:05:40 PM
 #26

FinCEN doesn't pass laws so you are free to disagree.

I'm thinking this could end up being defended in the U.S. as a free speech issue someday.

If I create words for a Twitter post and am paid cash for those words, there is no money transmission.    I created words and broadcast them.

If I cryptographically sign a message using my own software and computing device and am paid cash for that message, there is no money transmission.   I created the message and broadcast it.

Bitcoin is the square peg of money.

franky1
Legendary
*
Offline Offline

Activity: 1862



View Profile
June 04, 2013, 06:32:23 PM
 #27

over 20 posts of mis-understandings and waffle..

so lets put it into laymans terms for like the 5th thread of misunderstandings.

bitcoin itself is not regulatable.

FIAT is.

fiat is the bank notes and coins with the trademarked symbols of the government EG $ and £. the regulations call these REAL Currencies.

the SUBSTITUTE / CONVERTIBLE currencies are those that are easily recognised and convertable into bank notes and coins because their balance amount equals the same as a bank note

EG 10$ on a digital database can be easily converted into a $10 bank note
EG 46 bunny coins CANNOT be easily recognised and converted into a $10 bank note

those online penny per click websites and services offering digital balances that are recognisable have to be regulated. so advertising firms, with dollar/pound balances need regulation.

those websites and services offering credits, chips, coins where the numeric balance value does not instantly relate to a FIAT value do not need regulation.

so in short bitcoinQT, electrum, cgminer,etc does not need regulation, world of warcraft, does not need regulation, and so on.

FIAT gateways that handle FIAT or the digital form of FIAT DO need regulation.

so this is why amazon is trying amazon coins. so that it only has one 'office' that converts fiat to amazon coins (i beleive it to be in ireland due to cheap licences) and the rest of the planet it just moves amazon coins around. thus not requiring licences for every country on the planet.

the trick is this.

show a balance of 10.00 (even without trademarked government symbols) which can be redeemed for $10. you need regulations

show a balance of 0.078125($10 of bitcoin) which requires calculations to calculate a fiat value, you dont need regulations. UNLESS your service also touches FIAT

I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER.
Don't take any information given on this forum on face value. Please do your own due diligence & respect what is written here as both opinion & information gleaned from experience. If you wish to seek legal FACTUAL advice, then seek the guidance of a LEGAL specialist.
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
June 04, 2013, 06:35:47 PM
 #28

over 20 posts of mis-understandings and waffle..

so lets put it into laymans terms for like the 5th thread of misunderstandings.

bitcoin itself is not regulatable.

FIAT is.

fiat is the bank notes and coins with the trademarked symbols of the government EG $ and £. the regulations call these REAL Currencies.

the SUBSTITUTE / CONVERTIBLE currencies are those that are easily recognised and convertable into bank notes and coins because their balance amount equals the same as a bank note

EG 10$ on a digital database can be easily converted into a $10 bank note
EG 46 bunny coins CANNOT be easily recognised and converted into a $10 bank note

those online penny per click websites and services offering digital balances that are recognisable have to be regulated. so advertising firms, with dollar/pound balances need regulation.

those websites and services offering credits, chips, coins where the numeric balance value does not instantly relate to a FIAT value do not need regulation.

so in short bitcoinQT, electrum, cgminer,etc does not need regulation, world of warcraft, does not need regulation, and so on.

FIAT gateways that handle FIAT or the digital form of FIAT DO need regulation.

so this is why amazon is trying amazon coins. so that it only has one 'office' that converts fiat to amazon coins (i beleive it to be in ireland due to cheap licences) and the rest of the planet it just moves amazon coins around. thus not requiring licences for every country on the planet.

Then file an administrative ruling with FinCEN asking them if Bitcoin is a convertible currency.  If your right they will say no and you will be a hero.  Ultimately it doesn't matter what you think is a convertible currency or what I think is a convertible currency what matters is what FinCEN thinks is a convertible currency.  Well taken to the end game it matters what FinCEN can convince a judge is a convertible currency.

<----- That makes 9,999 so I guess I need to stop now.
NewLiberty
Legendary
*
Offline Offline

Activity: 1162


Gresham's Lawyer


View Profile WWW
June 04, 2013, 06:42:25 PM
 #29

I will be looking forward to what they have to say. This could either be very good, or very bad.

There are challenges with reasonableness and enforceability, if FINcen can't manage both, they will need to keep working on refining the rule.  Thank you for providing them some guidance on their guidance.  Helping them figure this out with some sense of sanity is a work of heroism, which is going to keep accounts open and businesses operating.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
DannyHamilton
Legendary
*
Offline Offline

Activity: 1974



View Profile
June 04, 2013, 06:47:33 PM
 #30

That makes 9,999 so I guess I need to stop now.

Save that 10,000th post for something important and memorable.  It would be such a waste to use it on something like "+1".

Of course, you could go back and delete old unnecessary posts to free up a little room if you want to say something pedantic.

zebedee
Donator
Hero Member
*
Offline Offline

Activity: 670



View Profile
June 06, 2013, 07:25:15 AM
 #31

I just laughed reading the OP.  You're causing some schmuck a whole lot of headache.  Not that I have any sympathy for these types.  How to fit a square peg in our round holes?
NewLiberty
Legendary
*
Offline Offline

Activity: 1162


Gresham's Lawyer


View Profile WWW
June 06, 2013, 06:19:55 PM
 #32

I wonder if my kid would get in trouble if he traded his World of Warcraft gold through an intermediary so that he could move his character from one server to another.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
Aseras
Hero Member
*****
Offline Offline

Activity: 658


View Profile
June 06, 2013, 08:37:57 PM
 #33

I just laughed reading the OP.  You're causing some schmuck a whole lot of headache.  Not that I have any sympathy for these types.  How to fit a square peg in our round holes?

Its the government.. they buy a $10,000 hammer and hire 50 engineers at $150K a year to plan how to make that peg fit, and they will find a way to make it fit, if it pleases the right people. They don't care who they destroy or what laws the break or ignore to do so. They will just hind behind immunity and most people not having the wealth to fight them.
CompNsci
Sr. Member
****
Offline Offline

Activity: 321


View Profile
June 06, 2013, 08:50:18 PM
 #34

You will note the word "virtual" or "decentralized" don't appear anywhere in the actual law.  What FinCEN provided in April was guidance.  The simple version is that guidance is FinCEN way of saying "this is the way we interpret EXISTING law". No new law was created in April.  Not a single line of public code. 


In this regard, I am very curious what Mt. Gox's plans are. Rather than simply complying with FinCEN guidance, it would be nice if a big exchange, like Mt. Gox, which could afford it, decides to challenge them in court.
bitzox
Full Member
***
Offline Offline

Activity: 173



View Profile
June 06, 2013, 10:44:23 PM
 #35

OK so this whole discussion has me a little bit confused so please forgive my ignorance. It seems to me that a company like Coinbase should have to register as a money transmitter. Yet from their terms of service I find the following:
https://coinbase.com/legal/user_agreement

"1.1 Coinbase helps you make payments to and accept payments from third parties [...] Coinbase is not a money transmitter. Coinbase assists its users in Bitcoin transactions.

"3.5 When buying or selling bitcoin, you are buying or selling from Coinbase directly. Coinbase does not act as an intermediary or marketplace between other buyers and sellers of bitcoin."

How can they buy and sell bitcoins directly to users and not be a money transmitter?

The guidance describes an exchanger as: "a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency."

Followed By:

"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person"

It seems to me that no matter how you read the parts of the guidance DeathAndTaxes is asking for clarification on, Coinbase would meet the requirements regardless. I know a lot of people on this forum don't like Coinbase for a variety of reasons and I really don't want to get into that here. What I am wondering is how they are circumventing this. It might be easy to just say they are operating illegally but Union Square Ventures has been looking into investing in a bitcoin company for 3 years and recently dropped $5 million Coinbase's way. While $5 million isn't much for a VC firm like them I have worked with these guys in the past and they don't mess around. They obviously think that the company's argument has some legs or they wouldn't be investing in them.

I may have missed a really simple point somewhere here and if that is the case I apologize, regulatory documents make my head hurt. Can anyone provide clarification on this?

18QpV8ZF3Y4oK8guDQiwTAK73W9r5nvBtm
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
June 06, 2013, 10:49:07 PM
 #36

You probably are going to have to ask coinbase.  I doubt anyone outside of the company can tell you how/why they believe they are not a money transmitter.

For what it is worth Coinase registered as a type 409 and 499 MSB which is Money Transmitter and "Other" respectively.  Registration was last updated 04/23 after FinCEN guidance came out.
http://www.fincen.gov/financial_institutions/msb/msb.registration.letter.html?ID=3928810
bitzox
Full Member
***
Offline Offline

Activity: 173



View Profile
June 06, 2013, 11:02:24 PM
 #37

You probably are going to have to ask coinbase.  I doubt anyone outside of the company can tell you how/why they believe they are not a money transmitter.

For what it is worth Coinase registered as a type 409 and 499 MSB which is Money Transmitter and "Other" respectively.  Registration was last updated 04/23 after FinCEN guidance came out.
http://www.fincen.gov/financial_institutions/msb/msb.registration.letter.html?ID=3928810

Thank you! I realized this might not be the appropriate venue for this question but since it was topically similar and the question came to me while slogging through the insanity that is regulatory documents, I figured I'd give it a shot.

On an unrelated note I appreciate all the work you are doing to help bitcoin. Keep it up!

18QpV8ZF3Y4oK8guDQiwTAK73W9r5nvBtm
bitzox
Full Member
***
Offline Offline

Activity: 173



View Profile
September 25, 2013, 11:51:37 PM
 #38

Did you ever receive a response?

18QpV8ZF3Y4oK8guDQiwTAK73W9r5nvBtm
Paladin69
Hero Member
*****
Offline Offline

Activity: 784


View Profile
September 26, 2013, 04:18:25 AM
 #39

Money transmitter licenses for miners is a bunch of stupid garbage.  There is no 3rd party handling money for miners.  To put miners on the same level as Western Union is silly.

Miners are just moving bits of data.  How does that make us any different than someone selling word documents through e-mail, or pdf's, or excel spreadsheets or STL data for 3d printers?  Should ISP's be considered money transmitters too because they move bits of data?  Aren't they profiting from "selling" bandwith?  Maybe ISP's should be forced to get a 48-state transmitter license because data sent from them can move to anywhere?
QuantPlus
Sr. Member
****
Offline Offline

Activity: 280



View Profile
September 26, 2013, 08:24:17 PM
 #40

I actually called the IRS and asked about having to be registered as a money transmitter.

There response was that ANYONE who buys, then re-sells, etc IS A MONEY TRANSMITTER AND MUST FILE IF EXCHANGE OVER $1,000.

If you report your BitCoin income, then audited, and not registered you will be in trouble.

Calling the IRS...
And talking to someone so unimportant that they field public phone calls...
Is just about the dumbest way to get reliable information.

As for the last part...
Does the IRS arrest hookers/pimps that declare their income?

Basically, the Government is not responsible for "helping" you obey the law...
The onus is on entirely on YOU to hire specialists like Securities Lawyers or Certified Accountants...
But you will certainly get a variety of opinions... and that, again, is YOUR problem.
Pages: « 1 [2] 3 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!