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Author Topic: Filed a request for an administrative ruling with FinCEN this morning.  (Read 7042 times)
hazek
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September 27, 2013, 06:32:32 AM
 #41

Did you ever receive a response?

I'd like to know this also.

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valiron
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September 27, 2013, 07:40:03 AM
 #42

Since Bernanke doesn't consider gold to be money I imagine buying gold coins online with bitcoins is not affected by the FinCEN guidance. Smiley

That's not true. Gold in the appropriate format is considered currency. Normalized ingots, and common bullion gold coins are currency.

What Bernanke says in public has to be taken with skepticism...
DeathAndTaxes
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September 27, 2013, 04:19:28 PM
 #43

Did you ever receive a response?

I'd like to know this also.

I did receive a response but it contained factual errors.  I had a revised clarification drafted and sent back to FinCEN per their procedures.
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September 27, 2013, 04:20:35 PM
 #44

Since Bernanke doesn't consider gold to be money I imagine buying gold coins online with bitcoins is not affected by the FinCEN guidance. Smiley

That's not true. Gold in the appropriate format is considered currency. Normalized ingots, and common bullion gold coins are currency.

What Bernanke says in public has to be taken with skepticism...

For the purpose of FinCEN regulations gold dealers are not considered money transmitters.  Selling gold bullion for Bitcoins (or dollars) would not be considered a money service business.
hazek
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September 27, 2013, 05:24:01 PM
 #45

Did you ever receive a response?

I'd like to know this also.

I did receive a response but it contained factual errors.  I had a revised clarification drafted and sent back to FinCEN per their procedures.

Ty for the update, keep us posted!  Cool

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

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DeathAndTaxes
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Gerald Davis


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September 27, 2013, 05:27:30 PM
 #46

Did you ever receive a response?

I'd like to know this also.

I did receive a response but it contained factual errors.  I had a revised clarification drafted and sent back to FinCEN per their procedures.

Ty for the update, keep us posted!  Cool

Will do.  They are suppose to respond within 30 days but it took more like 50 on the first response.  The clarification was sent back about 3 weeks ago.  On advice of counsel I decided not to make their response public while it is still openly being reviewed. 
CurbsideProphet
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September 27, 2013, 05:43:37 PM
 #47

I also brought up the scenario of operating an eWallet which involve only a single virtual currency and no real currency:
BTC: Person A -----> Wallet Provider -----> Person B
USD:  None

That's the question I had, since the guidance states:

Quote
The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.

It doesn't matter if no "real" currency is handled. The more recently released comments from FinCEN say it a bit more clearly:

https://bitcointalk.org/index.php?topic=181708.0

Quote
Those who are intermediaries in the transfer of virtual currencies from one person to
another person, or to another location, are money transmitters that must register with FinCEN as
MSBs unless an exception applies.
Some virtual currency exchangers have already registered
with FinCEN as MSBs, though they have not necessarily identified themselves as money
transmitters.

Is it the end of unregistered exchanges?

This makes it more of a pain in the rear to operate any kind of Bitcoin/crypto-currency (or other virtual currency) exchange if you're based in the U.S., at least in a complying above ground way.

Still, I think this quote deserves emphasis:

Quote
The guidance explains how FinCEN’s “money transmitter” definition applies to certain exchangers and system administrators of virtual currencies depending on the facts and circumstances of that activity. Those who use virtual currencies exclusively for common personal transactions like receiving payments for services or buying goods online are not affected by this guidance.

Since Bernanke doesn't consider gold to be money I imagine buying gold coins online with bitcoins is not affected by the FinCEN guidance. Smiley

The first bolded section is interesting.  An intermediary simply means one that acts as a link between two people.  Taken at face value, wouldn't anyone who operates a Bitcoin node be considered an intermediary?

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DeathAndTaxes
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Gerald Davis


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September 27, 2013, 06:32:24 PM
 #48

The first bolded section is somewhat out of context.  In the guidance FinCEN has NOT said that the transmission of virtual currency makes one a money transmitter*. The guidance states that exchanging virtual currency for real currency (or another virtual currency) may (in some instances) be classified as money transmission.  It is important to note that money transmission has a specific legal meaning beyond just money and a transfer.  For example a merchant which accepts credit card payments and issues refunds or affiliate payments is transmitting money.  In most cases they aren't a money transmitter.   All commerce involves the transfer of money but the overwhelming majority of commerce doesn't fall under FinCEN definition of a money transmitter.  


Then again FinCEN guidance on virtual currencies is so vague and nonsensical at times it is hard to know if they even know what they are saying or if what they wrote means what they think it means.  Honestly I don't think FinCEN fully understands Bitcoin and decentralized virtual currencies in general.

It was unrelated to this administrative ruling (I filed two others) but FinCEN "guidance" on virtual currencies even contradicts its prior guidance on the exchange of real currencies.  In at least three separate cases FinCEN concluded that a company which offers as a service to its clients the exchange of one real currency for another real currency is not a money transmitter even if it engages in the transmission of money IF that transmission is integral to another business motive, namely the conversion of foreign currencies (FOREX).

So if both the guidance on virtual currencies and the prior administrative rulings on foreign exchange are taken at face value:
The service to exchange one real currency for another real currency ( USD -> EUR or EUR->USD ) = NOT A MONEY TRANSMITTER (in some instances)
The service to exchange one real currency for one virtual currency ( USD -> BTC or BTC->EUR ) = MONEY TRANSMITTER
The service to exchange one virtual currency for another virtual currency ( BTC -> LTC or LTC->BTC ) = MONEY TRANSMITTER

A case can be made that FinCEN ruling is overly broad and capricious.
HairyMaclairy
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January 01, 2014, 03:25:12 AM
 #49

Did you receive a revised response?
severance26
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January 23, 2014, 12:02:17 PM
 #50

yes, bumping this thread. DeathandTaxes, did you get a response?
Bitware
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January 23, 2014, 04:50:19 PM
 #51

Since Bernanke doesn't consider gold to be money I imagine buying gold coins online with bitcoins is not affected by the FinCEN guidance. Smiley

That's not true. Gold in the appropriate format is considered currency. Normalized ingots, and common bullion gold coins are currency.

What Bernanke says in public has to be taken with skepticism...

For the purpose of FinCEN regulations gold dealers are not considered money transmitters.  Selling gold bullion for Bitcoins (or dollars) would not be considered a money service business.

While our Constitution says that gold is the only valid money.
DeathAndTaxes
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Gerald Davis


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January 23, 2014, 05:37:30 PM
 #52

yes, bumping this thread. DeathandTaxes, did you get a response?

Yes, but it was a request for clarification.  What they wanted clarified was clearly articulated in the original so my unsupported belief is that the request was merely a way to reset the clock and allow them to be compliant with their own rules.
bitzox
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January 23, 2014, 08:04:02 PM
 #53

yes, bumping this thread. DeathandTaxes, did you get a response?

Yes, but it was a request for clarification.  What they wanted clarified was clearly articulated in the original so my unsupported belief is that the request was merely a way to reset the clock and allow them to be compliant with their own rules.

Sounds like the federal bureaucracy all right

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severance26
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January 24, 2014, 02:06:38 AM
 #54

That's unfortunate. Please do update us if they end up replying. Thanks.
MarketNeutral
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January 24, 2014, 03:02:21 AM
 #55

Thank you for this information, DeathAndTaxes. I commend anyone who goes directly to primary sources for information, even if the information one receives is underwhelming.
CompNsci
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January 28, 2014, 05:28:25 PM
 #56

Read through this thread again with great interest. Many thanks to DeathAndTaxes for pursuing this.

Would you be willing to post the text of the request for clarification and your recent revision of it?

Hopefully eventually an answer will be produced.
bitzox
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January 29, 2014, 05:40:21 AM
 #57

Would you be willing to post the text of the request for clarification and your recent revision of it?

On advice of counsel I decided not to make their response public while it is still openly being reviewed. 

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January 30, 2014, 11:56:20 PM
 #58

Updated general guidance can be found here

http://www.fincen.gov/news_room/nr/pdf/20140130.pdf

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darkmule
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February 14, 2014, 03:59:26 AM
 #59

You have my applause.  It is a well drafted document and an intelligent request to make.  Hope the response is as prudent.
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November 08, 2017, 04:10:55 AM
 #60

Thanks for your effort, it is greatly appreciated.  I hope in time you'll share your findings with us.  I'm engaged in a similar endeavor, though I have found through the general help line that quality accurate information seems to be unavailable from Fincen.   It seems to be more lack of training than malicious intent though the jury remains out for the time being.

Scott Emick

Bitrated user: scottemick.
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