Bitcoin Foundation receives cease and desist order from California

[klee]

Ask the parents of dead Iraqi children if they thought the war on terror fought in there country was legal and/or valid.

The FED and now California are declaring war.  Most other states will fall in line.

Individual prosecution is next.

Let's try to be mature adults and keep some perspective.

Recent FinCEN guidances, DHS/etc. seizures, IRS/GAO discussions have all been in line with existing US law.  See my State of the Coin 2011 presentation and earlier forum discussions.  It has always been known that US individuals and companies must... do the obvious and follow US law.  For US bitcoin exchanges, for example, that likely means federal + 48 state licensing.  Enforcement actions like Liberty Reserve or Mutum Sigilium seemed to be clearly outside existing, known regulations.  You gotta expect law enforcement to... enforce the laws.

This California letter is so zany because it does not fit existing law or facts In My Opinion As A Non-Lawyer.

Each regulatory action needs careful consideration within the context of its country.  "ZOMG GOVERNMENT DEAD IRAQI CHILDREN" is about as far from thoughtful consideration as one can get.

Bitcoin is big, and we are getting a lot of regulator scrutiny right now, worldwide.

With all the respect to your technical skills I really doubt your political ones.
This from a non US European Balkan guy with centuries of Byzantine politics f@ckin up the continent.
You people there are so naive...sorry for my tone, I really like most of you but it has begun and you still negotiate!

BF is Goethe's Faust...
Oh Europe! What a dirty old bitch...

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[N12]

Haha, that was funny =)

However BF is useless vip club imho. Feds may shutdown them. I see no impact on bitcoin network at all.

They do pay the Bitcoin lead developer's salary.

[johnyj]

Obviously it is just an excuse, the true driven power behind these movements is worth noting. I just could not find any reason that anyone on the earth need to hate bitcoin, especially banks and governments, they need bitcoin to rescue them from the inevitable collapsing of bond bubble and sovereign default  

[lucif]

Haha, that was funny =)

However BF is useless vip club imho. Feds may shutdown them. I see no impact on bitcoin network at all.

They do pay the Bitcoin lead developer's salary.

Is that all?

[davout]

Haha, that was funny =)

However BF is useless vip club imho. Feds may shutdown them. I see no impact on bitcoin network at all.

They do pay the Bitcoin lead developer's salary.

So ?

[justusranvier]

Let's try to be mature adults and keep some perspective.

Recent FinCEN guidances, DHS/etc. seizures, IRS/GAO discussions have all been in line with existing US law.  See my State of the Coin 2011 presentation and earlier forum discussions.  It has always been known that US individuals and companies must... do the obvious and follow US law.  For US bitcoin exchanges, for example, that likely means federal + 48 state licensing.  Enforcement actions like Liberty Reserve or Mutum Sigilium seemed to be clearly outside existing, known regulations.  You gotta expect law enforcement to... enforce the laws.

That's all well and good except we all know they don't enforce the laws uniformly.

They are more than happy to turn a blind eye while Wachovia and HSBC launder money for some of the most violent drug cartels in the world, the very same ones that turned Mexico into a war zone, in exchange for a trivial cut of the profits.

Anyone who isn't a next door neighbour, college buddy, or former employer/employee of their bosses gets the fine toothed comb treatment and had damn well better cross every t and dot every i or else.

Their words tell us they are public servants impartially enforcing the law for the public interest, their actions say they are gangsters operating a protection racket on behalf of their Manhattan associates.

[lucif]

What really useful do they do from this list?
https://bitcoinfoundation.org/about/

[klee]

Blitz means they want to cut the head to finish BTC quick. Dream on!
http://en.wikipedia.org/wiki/Lernaean_Hydra

[QuestionAuthority]

Haha, that was funny =)

However BF is useless vip club imho. Feds may shutdown them. I see no impact on bitcoin network at all.

They do pay the Bitcoin lead developer's salary.

So ?

Exactly!

[justusranvier]

They do pay the Bitcoin lead developer's salary.

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.

[*Bob]

Haha, that was funny =)

However BF is useless vip club imho. Feds may shutdown them. I see no impact on bitcoin network at all.

They do pay the Bitcoin lead developer's salary.

They pay Gavin in BTC.

I don't think there would be any jurisdiction until he converts to USD - and at that point, it should be unrelated to the Foundation.

[CurbsideProphet]

For anyone who wants to read the document:

http://www.scribd.com/doc/149335233/CA-State-Cease-and-Desist-May-30

[QuestionAuthority]

For anyone who wants to read the document:

http://www.scribd.com/doc/149335233/CA-State-Cease-and-Desist-May-30

Uh oh, look at page 6. They're fucked.

[jgarzik]

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.

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.

[jgarzik]

A HackerNews comment making the rounds:
https://news.ycombinator.com/item?id=5928480

Most of the comments here are not particularly well-informed and should be ignored.

Yes, the Bitcoin Foundation (probably--I don't know anything about them other than what I've read) isn't strictly speaking a money transmitter. Yes, the California Department of Financial Institutions--which will cease to exist in 7 days when it gets merged into the California Department of Corporations--is totally ignorant of Bitcoin. But they know the law pretty well. Especially the one that they wrote. (See the name Robert Venchiarutti on the letter? He's really the one behind it. The DFI lawyers just do what they're told. They don't even like the law. Venchiarutti actually wrote it, with the help of TMSRT's lobbyists.)

That being said, the law to worry about here isn't even the one cited. It is, as I've stated quite frequently, 18 U.S.C. § 1960 (http://www.plainsite.org/laws/index.html?id=14426). And that law says that you don't have to be a money transmitter to get a letter such as the one received by the Bitcoin Foundation (http://www.scribd.com/fullscreen/149335233?access_key=key-2l...).

"(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business..."

The question then becomes whether the Bitcoin Foundation has any "control" or "direction" over its members and/or affiliates, who are most clearly in violation of the law under section (b). These words are vague. It could be argued that it does.
[...]

BIG FAT WARNING/DISCLAIMER:  This is Aaron Greenspan, who has his own "interesting" legal history etc.

[Elwar]

For anyone who wants to read the document:

http://www.scribd.com/doc/149335233/CA-State-Cease-and-Desist-May-30

Uh oh, look at page 6. They're fucked.

Nice of them to include Google advertisements in their legal document.

[Gabi]

Ahahah probably they think that bitcoin is made and controlled by "bitcoin foundation" like normal software

Ahahah they are funny 

[QuestionAuthority]

For anyone who wants to read the document:

http://www.scribd.com/doc/149335233/CA-State-Cease-and-Desist-May-30

Uh oh, look at page 6. They're fucked.

Nice of them to include Google advertisements in their legal document.

TBF didn't pay for any advertising for the conference did it?

[ElectricMucus]

A HackerNews comment making the rounds:
https://news.ycombinator.com/item?id=5928480

Most of the comments here are not particularly well-informed and should be ignored.

Yes, the Bitcoin Foundation (probably--I don't know anything about them other than what I've read) isn't strictly speaking a money transmitter. Yes, the California Department of Financial Institutions--which will cease to exist in 7 days when it gets merged into the California Department of Corporations--is totally ignorant of Bitcoin. But they know the law pretty well. Especially the one that they wrote. (See the name Robert Venchiarutti on the letter? He's really the one behind it. The DFI lawyers just do what they're told. They don't even like the law. Venchiarutti actually wrote it, with the help of TMSRT's lobbyists.)

That being said, the law to worry about here isn't even the one cited. It is, as I've stated quite frequently, 18 U.S.C. § 1960 (http://www.plainsite.org/laws/index.html?id=14426). And that law says that you don't have to be a money transmitter to get a letter such as the one received by the Bitcoin Foundation (http://www.scribd.com/fullscreen/149335233?access_key=key-2l...).

"(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business..."

The question then becomes whether the Bitcoin Foundation has any "control" or "direction" over its members and/or affiliates, who are most clearly in violation of the law under section (b). These words are vague. It could be argued that it does.
[...]

BIG FAT WARNING/DISCLAIMER:  This is Aaron Greenspan, who has his own "interesting" legal history etc.

Bingo.

The point is, The Bitcoin Foundation is a conglomerate of mtgox, bitpay and possible others subject to money transmitter regulations.

[jgarzik]

The first comment on Hacker News clears a lot of this up:
https://news.ycombinator.com/item?id=5927892

Most of the comments here are not particularly well-informed and should be ignored.

Not as much as you think.  Google around for Aaron Greenspan (ThinkComp), the author.

(and PS, this duplicates an earlier post in this thread ;p)