Bitcoin Foundation receives cease and desist order from California

[erk]

Because Bitcoin isn't classified as Legal Tender, the way I treat it is more like goods and services.

In other words you buy Bitcoin from someone and sell Bitcoins to someone else, not necessarily at the same price.

An analogy.
Say I want to pay someone far away $100, but I don't want to post $100 note, as long as the recipient agrees, I can do something like purchase a stick of RAM worth $100 send it to the person I want to pay, and it's up to him to sell the stick of RAM locally, he might get $95 or $105 for it providing he can find a buyer. Now a stick of RAM is not Legal Tender either, I can't pay my taxes with it, if the government were to legislate that it was Legal Tender that would be a different story.

I see Bitcoins as no different except they are virtual goods like a piece of software, or game code, that people by and sell via the Internet all the time.

[QuestionAuthority]

Because Bitcoin isn't classified as Legal Tender, the way I treat it is more like goods and services.

In other words you buy Bitcoin from someone and sell Bitcoins to someone else, not necessarily at the same price.

An analogy.
Say I want to pay someone far away $100, as long as the recipient agrees, but I don't want to post $100 note, so I can do something like purchase a stick of RAM worth $100 send it to the person I want to pay, and it's up to him to sell the stick of RAM locally, he might get $95 or $105 for it providing he can find a buyer. Now a stick of RAM is no Legal Tender either, I can't pay my taxes with it, if the government were to legislate that it was Legal Tender that would be a different story.

I see Bitcoin as no different except they are virtual goods like a piece of software, or game code, that people by and sell via the Internet all the time.

If we can just get you into political office quickly we're in good shape.

[marcus_of_augustus]

Well Vessenes did stick his head out .... and on the balance of probabilities having the guy in jail and out of harm's way may not be such a bad thing.

[solex]

Because Bitcoin isn't classified as Legal Tender, the way I treat it is more like goods and services.

No, this does not fly at all.

The status of legal tender here is irrelevant. Legal tender is simply the currency which is designated as lawfully acceptable for all debts, public and private. So the US government must accept US dollars for taxes, court judgments, duties. A lender in the US must accept US dollars if offered by a debtor to repay a debt.

The euro is not legal tender in the US, so is not acceptable for repaying any public debts, and is only acceptable for private debts at the discretion of the lender. The euro is however a cash equivalent, like all foreign currencies. A money transmitter is dealing in cash equivalents, and the FinCen guidance now includes decentralized virtual currencies as a cash equivalent. A cash equivalent is not a good or service.

However, it seems the BF can successfully argue that they are not money transmitting.

[QuestionAuthority]

You've just nailed my biggest fear exactly. If, due to lack of understanding, malice or unwillingness to learn, CA legislators found that the client is a basic tool of transmitting electronic funds which have the single purpose of converting to fiat then they could rule that everyone using a client is a money transmitter. Because of the high cost of entry (licensure) Bitcoin would become illegal for all but the wealthy. The EFT subset called ACH itself isn't fiat but it represents fiat as a system of credits and debits transmitted electronically. It only becomes fiat at the end of its journey at the other end of the transaction. What would happen if they look at the system and say, "well you have just invented another version of ACH and you need to be licensed for that. We believe that's stupid because we see the small economy and that we can buy something using only Bitcoin so it's distinct from a fiat transfer system but what will legislators believe. The bad news is that even this community values Bitcoin against the US dollar and is fixated on "what Bitcoin is worth today."

The fact is this may happen.  I personally don't think it will but it might.  We should prepare for it just in case.

Ruling that Bitcoin client is illegal or whatever would result in the same as ruling BitTorrent clients are illegal or whatever. People would just laugh.

It wouldn't be illegal it would be regulated effectively guaranteeing no mainstream adoption. You're right, the only users would be those who disregard the law like BitTorrent users.

[ecliptic]

You've just nailed my biggest fear exactly. If, due to lack of understanding, malice or unwillingness to learn, CA legislators found that the client is a basic tool of transmitting electronic funds which have the single purpose of converting to fiat then they could rule that everyone using a client is a money transmitter. Because of the high cost of entry (licensure) Bitcoin would become illegal for all but the wealthy. The EFT subset called ACH itself isn't fiat but it represents fiat as a system of credits and debits transmitted electronically. It only becomes fiat at the end of its journey at the other end of the transaction. What would happen if they look at the system and say, "well you have just invented another version of ACH and you need to be licensed for that. We believe that's stupid because we see the small economy and that we can buy something using only Bitcoin so it's distinct from a fiat transfer system but what will legislators believe. The bad news is that even this community values Bitcoin against the US dollar and is fixated on "what Bitcoin is worth today."

The fact is this may happen.  I personally don't think it will but it might.  We should prepare for it just in case.

Ruling that Bitcoin client is illegal or whatever would result in the same as ruling BitTorrent clients are illegal or whatever. People would just laugh.

Bittorent doesn't transmit money, it transmits files.

If they want to they can rule

* Anyone using bitcoin is a money transmitter

* Anyone who mines a block assists in the transmission of money

[erk]

Because Bitcoin isn't classified as Legal Tender, the way I treat it is more like goods and services.

No, this does not fly at all.

The status of legal tender here is irrelevant. Legal tender is simply the currency which is designated as lawfully acceptable for all debts, public and private. So the US government must accept US dollars for taxes, court judgments, duties. A lender in the US must accept US dollars if offered by a debtor to repay a debt.

The euro is not legal tender in the US, so is not acceptable for repaying any public debts, and is only acceptable for private debts at the discretion of the lender. The euro is however a cash equivalent, like all foreign currencies. A money transmitter is dealing in cash equivalents, and the FinCen guidance now includes decentralized virtual currencies as a cash equivalent. A cash equivalent is not a good or service.

However, it seems the BF can successfully argue that they are not money transmitting.

Where is their definition of "cash equivalent"? Most cash equivalents I know of are things like stocks and bonds not virtual items.

[marcus_of_augustus]

So by that ludicrous reasoning Is Namecoin cash "equivalent"?

Litecoin?

Devcoin?

PPCoin?

BBQCoin?

"How silly do they want to look?" is really the question here isn't it?

[solex]

Where is their definition of "cash equivalent"? Most cash equivalents I know of are things like stocks and bonds not virtual items.

http://www.fincen.gov/news_room/rp/files/sar_tti_09.pdf

Pages 6 and 7 you will see "cash or equivalent" as a separate instrument from stocks, bonds and most anything else of a monetary nature.

So by that ludicrous reasoning Is Namecoin cash "equivalent"?

Litecoin?

Devcoin?

PPCoin?

BBQCoin?

"How silly do they want to look?" is really the question here isn't it?

They're all called cryptocurrencies for a reason. But because they have miniscule buying power they are well below regulatory radar, at present.
Bitcoin can't be a super-currency or "gold 2.0" for buying stuff, but also monopoly and sea-shell money for regulatory purposes.

Now, I know it can't be regulated in any traditional sense, as it stands, but regulators will always try because they need to justify their salaries, and preserve their bureaucratic empires.

[marcus_of_augustus]

Where is their definition of "cash equivalent"? Most cash equivalents I know of are things like stocks and bonds not virtual items.

http://www.fincen.gov/news_room/rp/files/sar_tti_09.pdf

Pages 6 and 7 you will see "cash or equivalent" as a separate instrument from stocks, bonds and most anything else of a monetary nature.

So by that ludicrous reasoning Is Namecoin cash "equivalent"?

Litecoin?

Devcoin?

PPCoin?

BBQCoin?

"How silly do they want to look?" is really the question here isn't it?

They're all called cryptocurrencies for a reason. But because they have miniscule buying power they are well below regulatory radar, at present.
Bitcoin can't be a super-currency or "gold 2.0" for buying stuff, but also monopoly and sea-shell money for regulatory purposes.

Now, I know it can't be regulated in any traditional sense, as it stands, but regulators will always try because they need to justify their salaries, and preserve their bureaucratic empires.

Laws are next to useless if they are inconsistent within themselves.

Can you tell me what definition of "is" is? That's where they're heading with that kind of subjective law interpretation on the hoof.

[virtualmaster]

Pressure on BF -> BF is cooperating with regulators -> developers are cooperating with regulators -> small changes in the client to better track transactions -> changes in the protocol to roll back unwanted transactions

This conspiracy theory is ignorant of (a) how open source works and (b) how the dev team works.

- It is not a conspiracy theory (which is stating an existing situation) just an extrapolation, a speculation of an actual development for the future what could happen.
It is also not very probable that the government is trying to act on changing the protocol but they are probable trying to track transactions better which could lead to the next point.
- a. Is your Android not an open source where you give permission to track your position, stored data and calls ?
- b. Sorry. It was not intended to put in question the integrity of the development team. They are doing a great work. 
But we can't know how will work the (future) development team in the future.

[Minor Miner]

liberty dollar was a physical coin that was put into circulation as a counterfeit of a US dollar coin. it held the $ symbol etc which is trade marks of government.

Wrong. The $ sign is not a trademark of government..LMAO.....take a few moments to think about that before you make yourself sound galactically stupid again.

That is correct franky1 often gets the details incorrect.

http://www.lewrockwell.com/rounds/rounds34.1.html (copy of jury form lists many of the details of the case).

The coins however did use the words "USA", "In God we Trust", have US state names, and symbology commonly associated with US coins.  Statements of the company about launching all 50 coins to coincide with date of US mint launching US state coins was introduced as evidence.  As was documentation that the organization encouraged passing the coins as US coinage (not overtly lying but allowing the counterparty to make a mistake that the coins were US legal tender), encouraged participating merchants to give unsuspecting customers Liberty Coins as change without informing them it wasn't legal tender (i.e. customer buys $60 worth of goods, pays with $100 FRN and gets back Liberty Reserve coins for some or all of change.  Most people would assume that if they paid in legal tender, the change back was legal tender).




Then you have aspects like the $10 Silver coin having about $6 worth of Silver at the time of minting.  Everyone at every level got very large cuts of the profits.  Ultimately it was unsuspecting consumers who got $6 in Silver instead of $10 in FRN.

VERY SOLID summary of why liberty dollar was not some libertarian "fighting for the good of the people" and actually was a scam.

[ZenInTexas]

I would be very cautious about anything related to bitcoin.

Outcome #1: The order is voided, and life goes on
Outcome #2: The order is enforced

The problem is if: A legal argument is made that bitcoind is the "creator" of bitcions, and bitcoind is owned by the foundation, hence the foundation is the creator of a bitcoins, and all the problems that come with that legal argument

[DobZombie]

can somebody tell me why a foundation that is meant to represent a worldwide monetary movement is based in the United States, when that country is VERY bitcoin hostile?

and why are so many bitcoin conferences held there?

I don't bloody get it.

[Rampion]

I would be very cautious about anything related to bitcoin.

Outcome #1: The order is voided, and life goes on
Outcome #2: The order is enforced

The problem is if: A legal argument is made that bitcoind is the "creator" of bitcions, and bitcoind is owned by the foundation, hence the foundation is the creator of a bitcoins, and all the problems that come with that legal argument

They can sue Bitcoin Foundation into bejizus for all most of us care. Life goes on regardless. They need to start jailing mom and pop shop operators that accept Bitcoin just like MAFIAA tried to sue all the 100 year old grandmas and dead people for downloading some crappy mp3's. Given how fascist the USA is I would not be surprised.

This. Let's them do their thing. If they are so stupid to try to "ban" bitcoin and prosecute its users, they will just be making a fool of themselves, like the MAFIAA did when tried to stop "illegal" (LOL) downloads.

Those stupid guys in suits need to hit with their heads 100 times on a wall before they realize the wall is not going to break. Let's them try to ban bitcoin, we're comfortably waiting laughing at them.

[jgarzik]

can somebody tell me why a foundation that is meant to represent a worldwide monetary movement is based in the United States, when that country is VERY bitcoin hostile?

1. Regulators released guidance indicating that bitcoin buying/selling within the bitcoin economy is affirmatively OK, and would not require every user registering with the government, as many conspiracy theorists had direly predicted.
2. Many bitcoin users are in the US.
3. Many bitcoin investors are in the US.

The sum of that != bitcoin hostile.  Just the opposite.

It's also silly to loudly complain when people are standing up and volunteering to take slings and arrows on behalf of others.

[BCB]

For all the knucklehead who like to post uninformed opinions can I suggest you do (a lot) of research before you post.

http://www.moneytransmitterlaw.com/state-laws/

It doesn't matter what you or I think.  It matters what our laws and regulations state.  Until someone steps up to challenge them and set a new a precedent we are required (a law-abiding citizens) to comply.

 

[Rassah]

It doesn't matter what you or I think.  It matters what our laws and regulations state. 

I would expand that to state - It matters what the regulators think our laws and regulations state. And they can change their minds about that.

[BCB]

It doesn't matter what you or I think.  It matters what our laws and regulations state. 

I would expand that to state - It matters what the regulators think our laws and regulations state. And they can change their minds about that.

+1

[drrussellshane]

can somebody tell me why a foundation that is meant to represent a worldwide monetary movement is based in the United States, when that country is VERY bitcoin hostile?

and why are so many bitcoin conferences held there?

I don't bloody get it.

Because


USA


#1