Bitcoin Foundation receives cease and desist order from California

[edd]

Is the foundation going to make any announcement about this matter to its members?

It's all over the news already so it hardly needs announcing, it probably needs an official response not an announcement, and I would assume the response would be after first taking legal advice.

It was discussed on the BF forum.

[Rassah]

Really? Does TBF pay the lead developers salary?

Yes

Does the lead developer work on a software system that can transfer funds for cash out at an exchange?

No. Just software that can store and transfer bitcoins. Exchanges work on the software that transfers between cash and bitcoins. This would be like telling World of Warcraft to get a MTB license because people on eBay trade their currency for cash.

Did TBF spend any funds advertising the recent California conference?

Yes

Does the state of California consider that to be enough for violation of the law?

I really don't know. I would think that if my organization was being sponsored by Bank of America, and I pointed that fact out at one of my conferences, thus giving them advertising in exchange, that I would not have to register as a bank?

I don't know enough of the inside story to answer all these questions but if you do please enlighten us.  

I wish I could. Logically, none of this makes any sense. But then again not only I Am Not A Lawyer, but I Am Not A Crazy Person either. And I am starting to suspect these people might be.

[solex]

I wish I could. Logically, none of this makes any sense. But then again not only I Am Not A Lawyer, but I Am Not A Crazy Person either. And I am starting to suspect these people might be.

Maybe they are just desperate. Consider this equation. The state government in California is all but bankrupt. They have a sales tax for revenue. They read news stories about people "living a week on Bitcoin" and the meme that "Bitcoin allows people to avoid taxes". The recent conference means that Bitcoin is growing.

So for desperate people 1 + 1 + 1 + 1 = 666

[QuestionAuthority]

Really? Does TBF pay the lead developers salary?

Yes

Does the lead developer work on a software system that can transfer funds for cash out at an exchange?

No. Just software that can store and transfer bitcoins. Exchanges work on the software that transfers between cash and bitcoins. This would be like telling World of Warcraft to get a MTB license because people on eBay trade their currency for cash.

Did TBF spend any funds advertising the recent California conference?

Yes

Does the state of California consider that to be enough for violation of the law?

I really don't know. I wouldn't think that if my organization was being sponsored by Bank of America, and I pointed that fact out at one of my conferences, thus giving them advertising in exchange, that I would have to register as a bank.

I don't know enough of the inside story to answer all these questions but if you do please enlighten us.  

I wish I could. Logically, none of this makes any sense. But then again not only I Am Not A Lawyer, but I Am Not A Crazy Person either. And I am starting to suspect these people might be.

I happen to think that California will see all the advertising and the connection with software development as enablement and accessory to a violation but your right most government actions seem nuts so it's hard to guess. Your BofA argument would work if it weren't for CA Code 2030. Selective enforcement is the problem with all laws. If they like you they don't enforce. If they don't they slam the hammer.

I never joined because I don't run a Bitcoin business and that's what I see TBF mostly supporting. I'm not against them but I see limited usefulness for individuals. You're a TBF member, what was said on the TBF forum? Is it just useless chatter like this thread or was there some hopeful news?

[counter]

Well I guess this issue goes a little deeper then I originally thought I have to admit.  I heard through the grapevine that Californians would be fined for using bitcoins which is sickening!  I have to look into this more just saying if that is true that is crazy and sad.

[QuestionAuthority]

Well I guess this issue goes a little deeper then I originally thought I have to admit.  I heard through the grapevine that Californians would be fined for using bitcoins which is sickening!  I have to look into this more just saying if that is true that is crazy and sad.

Source?

[coinage]

But if you are not actually doing the thing they are accusing you of doing, and you tell them that you have stopped doing it, you aren't lying, right? It wouldn't be saying, "I am not doing this, please prove that I am," it's simply "I stopped doing it."
I guess they can still fine you, claiming that you are still doing the thing you've never done in the first place

No, formally saying you have stopped doing something has an implied admission that you have been doing it.

What seems expedient now could actually be very problematic later, since with bitcoin it is extremely difficult if not impossible to prove you didn't do something.  To attempt that, you would have to fully document all bitcoin transactions/services/businesses you were ever involved in, yet you could still be accused of not revealing all of your wallets.

_{(The reverse is of course not true: coin users can easily prove they did do something, should they choose to.)}

[yaffare]

Interesting question would be:

Was it a misunderstanding on purpose? (of how bitcoin works)

If not, then everything is ok. Misunderstanding will be clearified and BF continues as normal.
If yes, then BF is screwed. They were just looking for a reason to shut this thing down.

[edd]

You're a TBF member, what was said on the TBF forum? Is it just useless chatter like this thread or was there some hopeful news?

I know this wasn't directed at me but I am a member so I thought I'd answer.

Patrick did inform us that the letter was dated May 30th but was only received last week. He also stated that Jon wrote his piece before he could draft an announcement so he just linked to it on the BF forum.

Other than that, the discussion on that forum is basically this thread condensed into one page.

[QuestionAuthority]

You're a TBF member, what was said on the TBF forum? Is it just useless chatter like this thread or was there some hopeful news?

I know this wasn't directed at me but I am a member so I thought I'd answer.

Patrick did inform us that the letter was dated May 30th but was only received last week. He also stated that Jon wrote his piece before he could draft an announcement so he just linked to it on the BF forum.

Other than that, the discussion on that forum is basically this thread condensed into one page.

Thanks edd.

[erk]

The bit I don't understand about "money transmission without a license" is are they talking about the transferring of BTC between one place or another, or are they taking about BF accepting USD converting it to BTC sending the BTC somewhere then the destination converts it back to USD?

[CasinoBit]

Here you go:

Downfall of TBF: Hitler receives cease and desist order from California.

 

[Rassah]

Here you go:

Downfall of TBF: Hitler receives cease and desist order from California.

That was f'in hilarious! Thanks 

[marcus_of_augustus]

Here you go:

Downfall of TBF: Hitler receives cease and desist order from California.

Always with those damned carrots!

Someone needs to send a cease and desist order to california ... cease being complete idiots and desist from rampant totalitarianism.

I guess Vessenes gets his wish for endless stream of lawyers on the BF payroll now ... glad I sent my btc donation directly to Gavin because all i can see is all those BF donations ending up in slick lawyer's pockets before the whole sham is folded up and no one is any the wiser about what the fuck just happened and where the btc went ... kind of like pirate@havard-law for the good folks.

[QuestionAuthority]

"I still will go broke paying all those legal fees"

carrots - rolf

[Stephen Gornick]

Maybe they think the Bitcoin Foundation was involved in "money transmission" because of the working Bitcoin ATM at the conference

Heh, very well could be.  That event was in San Jose, CA.   The facilities were rented by Bitcoin Foundation.   This activity occurred in plain view (and probably was even promoted by Bitcoin Foundation, as-in  ... need bitcoins, go visit the Bitcoin ATM).

I could see the State using that incident as the justification for an opportunity to send a Cease and Desist.
 

[virtualmaster]

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.

Then may be it is a stupid game with a clever calculation behind.
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

[molecular]

Who next then, github?

Yes! And Linux Foundation too. And then only windows with escrowed backdoor keys is legal to install on any computing device and everyone moving out to darknets.

U no move to darknet... sending encrypted information without prior key-sharing with authorities is punished with jail-time.

I think it's time to found the "church of random", where our religious practive involves random automated prayer. We'll install random prayer nodes sending random prayers to random other believers prayer nodes in order to worship the gods of random.

[dserrano5]

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.

Then may be it is a stupid game with a clever calculation behind.
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

-> hard fork (and everyone can stick with the best version of Bitcoin)

Then they allow taxes to be paid using their-fork-coins. Sheeps go buy those (whoa! government endorsed bitcoin!!) and their fork explodes in value, then we are left as the weird minority holding useless coins.

[bitbitcoins]

but how to block bitcoins transmission in CA ? technically impossible since BTC is decentralized ...