Bitcoin Foundation receives cease and desist order from California

[moni3z]

Lol oops, totally missed that other post.
I always thought Chuck Schumer would be the guy to lead the destruction of bitcoin via government fascism. What's up with California they are either broke and desperate for even the tiny bit of change leaking out of the economy via bitcoin or they are run by Paypal lobbyists.

[luv2drnkbr]

I'll sign up to help pay Gavin's salary directly if he ever asks for it. All he needs to do is set up a ReDonate account or equivalent.

ಠ_ಠ

[N12]

Do we have any actual lawyer amidst us who can shed some light?

[BCB]

Marco Santori posts here regularly:

https://bitcointalk.org/index.php?topic=206305.msg2158027#msg2158027

If he is online maybe he can offer an opinion (if he has not already been retained).

[QuestionAuthority]

Do we have any actual lawyer amidst us who can shed some light?

That's where this needs to be. Why doesn't some mod move it to the legal sub?

[Mageant]

Bitcoin exposes how important control of the monetary system is.
I would suggest that whoever is actively involved in the Bitcoin Foundation move out of the US.

[benjamindees]

You people there are so naive...sorry for my tone, I really like most of you but it has begun and you still negotiate!

Naiveté doesn't even begin to account for the level of delusion in some sectors of this community.

Most of you will never realize, until it is too late, that "law enforcement" almost universally have below-average IQ, zero compunction, and usually some type of un-diagnosed mental illness.  And it doesn't matter whether you're talking about the ones that sit in cars all day eating donuts, or the ones that sit in offices with air conditioning.

Two weeks ago, I had a Federal agent lie straight to my face, then turn around five minutes later and do the exact same thing he claimed he would not do.  When I pointed this out to him, he actually looked surprised, like physically shocked, as though some other personality had been the one to do it.

These people peddle bullshit as a profession.  Their only measure of success is whether you cooperate with them.  Every step you take towards that end is just moving you closer to their end goal of complete control.

You gave them a "foundation" to target and attempt to gain control over.  Don't act surprised now that they actually do so.

[assortmentofsorts]

Most of you will never realize, until it is too late, that "law enforcement" almost universally have below-average IQ, zero compunction, and usually some type of un-diagnosed mental illness.  And it doesn't matter whether you're talking about the ones that sit in cars all day eating donuts, or the ones that sit in offices with air conditioning.

+1 Agree!

[klee]

You people there are so naive...sorry for my tone, I really like most of you but it has begun and you still negotiate!

You gave them a "foundation" to target and attempt to gain control over.  Don't act surprised now that they actually do so.

Hellraiser - aka The Consequences of Raising Hell

[justusranvier]

ReDonate is a better effort than most.  Typically, donations are so unpredictable that no sane developer would rely on them for income, especially if they are supporting a family.  ReDonate solves some of those problems, but not necessarily all.  Getting recurring donations working at all was a big step.  However more ideal -- and what Bitcoin Foundation can provide -- is

• stable salary with benefits
• handles the burst-y ebb and flow of donations
• mostly* frees the engineer from drudgery of constantly campaigning for funds

Donations and bounties are rarely effective in getting and giving long term commitments to open source engineers.

Sounds like an opportunity for someone to code a better solution.

In the meantime, one developer is able to use the existing tools to successfully predict (a portion of) future donation income.

To make the model more successful, he could set a pledge goal and have a web site that automatically displays how close he is to reaching that goal. That shouldn't be difficult to solve via coding.

[QuestionAuthority]

Is Peter Vessenes still the head of TBF?

[alyssa85]

They shouldn't have set up the foundation in the first place - it just put a big target on their back. All these orgs are weak points.

OK i accept the need for some gateways - but they all need to be located outside the United States.

To deal with this all they need to do is formally dissolve the foundation and then they arn't breaking any law California has invented. After all Bitcoin doesn't need the foundation - it survived 5 years without it.

[MSantori]

Hi everyone. I have not been retained for this matter.  I believe the Foundation has its own competent legal counsel, so I'm happy to weigh in on this independently.  

One of three things just happened:

1) California's DFI just derped. Hard.  Someone over there (whether it's Crayton, Venchiarutti, both or someone senior to them) believes that the Foundation actively issues, exchanges or transmits BTC or fiat.  They might have even confused the Bitcoin Foundation with the Bitcoin Project.  ...Let's get serious for a minute: These men are so ignorant as to believe this.  To the contrary, they strike me as fairly intelligent people who would have done their diligence before sending a C&D. I think (1) is out.

2) DFI did not derp at all.  DFI believes that the Foundation's passive role in the industry means it "conducts, controls, manages, supervises, directs, or owns" a money transmission business.  The Foundation is about to face a very real legal battle with DFI fighting this theory.  I don't believe this is the case either.  To use a popular example: the RIAA does not conduct, control, manage or supervise any recording business.  It's the other way around. EMI, Sony, UMG and its other constituent businesses control the RIAA.  I don't think DFI has any evidence to the contrary. I think (2) is out as well.

3) DFI is being political.  It doesn't know for sure what the Foundation does, doesn't know for sure whether it has its hands in any money transmission business, doesn't know the extent of its relationship with the Bitcoin Project and doesn't know the extent of its relationship with its constituent businesses.  I would wager that only Foundation insiders (that's a very short list) know this.  DFI isn't going to sit on the sidelines while this information stays in the Foundation's black box.  Instead, it has begun a dialogue with the Foundation via a very special political method: a nasty letter.  The Foundation is now compelled to respond and show their cards to a certain degree.  Not legally compelled, of course, but practically compelled to explain their role in detail, and perhaps even provide evidence for their characterizations.  By opening this dialogue, DFI will not be caught with its pants down when "this whole Bitcoin thing" gets big.  To be sure, it is discharging its regulatory and investigative duties.  Practically, though, it's doing a little CYA to put itself in a good position to say "We got out in front of this early." You've all probably gathered that this (3) is precisely what I think is going on.  (1) and (2) above don't strike me as likely at all.

Some of you seem to believe that a battle line has been drawn, that the regulators are now on the offensive against BTC, and will conduct your businesses accordingly.  I would caution against that approach.  I don't think yours is a "conspiracy theory", but like conspiracy theories, this approach presumes that there is some powerful group, or at least a loose association of people at the helm of the regulation, who are steering the course of BTC in a way that favors their stakeholders - banks, paypal, Western Union, etc.  I think that the truth is actually more terrifying: the regulation is rudderless.  There is nobody and no particular group of people at the helm.  There are only competing interests, like banks, bitcoiners, money transmitters and legislators who are all pulling at their own oars, trying to propel the ship in their own preferred direction.  There is no course plotted.  The ship will move forward, that's for sure.  But the strongest, loudest and most dominant rowers will determine its path.

It will be interesting to see if this is part of a larger, blanket effort.  The coming days will tell.

[QuestionAuthority]

Hi everyone. I have not been retained for this matter.  I believe the Foundation has its own competent legal counsel, so I'm happy to weigh in on this independently.  

One of three things just happened:

1) California's DFI just derped. Hard.  Someone over there (whether it's Crayton, Venchiarutti, both or someone senior to them) believes that the Foundation actively issues, exchanges or transmits BTC or fiat.  They might have even confused the Bitcoin Foundation with the Bitcoin Project.  ...Let's get serious for a minute: These men are so ignorant as to believe this.  To the contrary, they strike me as fairly intelligent people who would have done their diligence before sending a C&D. I think (1) is out.

2) DFI did not derp at all.  DFI believes that the Foundation's passive role in the industry means it "conducts, controls, manages, supervises, directs, or owns" a money transmission business.  The Foundation is about to face a very real legal battle with DFI fighting this theory.  I don't believe this is the case either.  To use a popular example: the RIAA does not conduct, control, manage or supervise any recording business.  It's the other way around. EMI, Sony, UMG and its other constituent businesses control the RIAA.  I don't think DFI has any evidence to the contrary. I think (2) is out as well.

3) DFI is being political.  It doesn't know for sure what the Foundation does, doesn't know for sure whether it has its hands in any money transmission business, doesn't know the extent of its relationship with the Bitcoin Project and doesn't know the extent of its relationship with its constituent businesses.  I would wager that only Foundation insiders (that's a very short list) know this.  DFI isn't going to sit on the sidelines while this information stays in the Foundation's black box.  Instead, it has begun a dialogue with the Foundation via a very special political method: a nasty letter.  The Foundation is now compelled to respond and show their cards to a certain degree.  Not legally compelled, of course, but practically compelled to explain their role in detail, and perhaps even provide evidence for their characterizations.  By opening this dialogue, DFI will not be caught with its pants down when "this whole Bitcoin thing" gets big.  To be sure, it is discharging its regulatory and investigative duties.  Practically, though, it's doing a little CYA to put itself in a good position to say "We got out in front of this early." You've all probably gathered that this (3) is precisely what I think is going on.  (1) and (2) above don't strike me as likely at all.

Some of you seem to believe that a battle line has been drawn, that the regulators are now on the offensive against BTC, and will conduct your businesses accordingly.  I would caution against that approach.  I don't think yours is a "conspiracy theory", but like conspiracy theories, this approach presumes that there is some powerful group, or at least a loose association of people at the helm of the regulation, who are steering the course of BTC in a way that favors their stakeholders - banks, paypal, Western Union, etc.  I think that the truth is actually more terrifying: the regulation is rudderless.  There is nobody and no particular group of people at the helm.  There are only competing interests, like banks, bitcoiners, money transmitters and legislators who are all pulling at their own oars, trying to propel the ship in their own preferred direction.  There is no course plotted.  The ship will move forward, that's for sure.  But the strongest, loudest and most dominant rowers will determine its path.

It will be interesting to see if this is part of a larger, blanket effort.  The coming days will tell.

Reading the letter, it seems they are in direct violation of CA Code 2030. Could you shed some light on this?

[rebuilder]

 I think that the truth is actually more terrifying: the regulation is rudderless.  

This... It's perversely comforting to imagine there's a cabal of power players running the world from the shadows with uncanny ingenuity. In that scenario, you may not agree with the direction, but at least someone competent is at the helm. The scarier, more realistic option is what MSantori proposes, that no-one qualified is running the show.

[benjamindees]

I don't think yours is a "conspiracy theory", but like conspiracy theories, this approach presumes that there is some powerful group, or at least a loose association of people at the helm of the regulation, who are steering the course of BTC in a way that favors their stakeholders - banks, paypal, Western Union, etc.  I think that the truth is actually more terrifying: the regulation is rudderless.  There is nobody and no particular group of people at the helm.

Centralized money-printing sets the course of the economy, and of the government that depends upon it.  The direction is towards centralization and control.  It isn't a "conspiracy theory".  Ben Bernanke gives regular press conferences.  It's the entire reason Bitcoin even exists.

[phoenix1]

The letter is dated 30th May ... why so much fuss today ?
Surely discussions have been going on for more than 3 weeks already

[xxjs]

There must be hundres of these departments.

[ProfMac]

Two decades ago I attended a professional conference in San Francisco, and afterward I took my daughter to see the museum in the old mint building.  At that time, i was interested in the definition of a hard currency and noted in particular that there were some currencies from Utah on display that were backed by salted pork, and other various currencies, issued by independent banks or businesses.

One of many differing stories tells of a time when the Bank of Hibernia in New Orleans issued a bank note printed in French and English: different people would identify one side or the other as the front.  The French side said "dix" and the economic zone defined wherever this note was freely accepted in trade was Dixie.

It is almost certainly an interesting piece of trivia to anyone interested in Bitcoin to know about the transition from independent banks issuing bank notes to the current centralized situation.

I think that a well researched and widely comprehended understanding of this situation would add valuable perspective to Bitcoin discussions.

[franky1]

They probably thought the deep discount because McEnery Convention Center is under construction was good deal. Well that backfired! lol

This might actually be a good thing. TBF has been blustering for a while now about wanting to lobby Washington. Well here's their chance for a test case. All they need to do is prove to California govt that the membership of TBF does not run any money transmission business and they win. This could be the landmark case providing ammo to fight Washington. Or it could be that they are in way over their heads and didn't realize that Team San Jose is a government centric organization. lol

a money transmission business has to involve FIAT. thats the biggest thing to ever think about when bitcoin users are concerned. if you dont touch fiat your not a money transmitter. end off..

although TBF does not as part of their business trade bitcoins for FIAT for any customer. they do/must at some point convert bitcoin to FIAT to pay for things like convention halls...

it is also known that any amount of FIAT wire transferred over $1000 in one go or $15000 slowly over a year would be classed as a business transaction, as oppose to personal transactions (wages).

so TBF needs to clarify when it converted the bitcoin to FIAT to pay for the convention hall.. what was the purpose of the transaction. and the answer would be a purchase of a good or service and not a transmission of funds.

to clarify this they would need to show all the hands that touched the FIAT between TBF and the convention centre. hopefully they used bitinstant bank accounts in the process, as one of the BF's founders is a bitinstant founder. which is fully licenced.

if however gavin found some joebloggs in california and handed them many thousands of BTC in exchange for 10's of thousands of dollars to then use for the convention centre. then TBF has more to explain.