TL/DR version:
FinCEN wanted to regulated Bitcoin exchanges. The proper thing to do would get Congressional oversight in the form of expanded regulatory powers but that might have taken years. FINCEN did a bunch of mental gymnastics and called exchanging currency money transmission and that is what we are stuck with.
The Foundation challenged this in its response letter. It may yet get litigated if not legislated.
Agreed however US law is slanted against such action. There is an issue of standing. For example the foundation has not registered as a MT, they have not been indicted by the SEC, by their own admission they are not a MT. Therefore they have no standing to fight this in federal court. The SEC wouldn't even defend such an action they would simply file motion to have the case dismissed for lack of standing. To fight it in court requires you to violate the law, get charged, and then use that as a defense. Most entities won't take that route, they will a) comply (even if they know that the law is stupid/bogus, b) go around the law (operate outside the US for non-US clients), or c)willfully violate the law in such a manner that makes prosecution difficult (aka Silk Route method). It is entirely possible there will NEVER be a well funded, well operated entity which has standing.
I will give you a concrete example. DC had a gun ban for 30+ years. It was obviously unconstitutional, it wasn't licensing, or registration it was a complete ban on the most common form of firearm used for self defense. It wasn't a ban on carrying in public, or transporting, or use. It was an absolute ban on personal ownership in all forms and places with the city. It took 30+ years to find someone with standing and not for a lack of trying. There were dozens of cases which were summarily dismissed for a lack of standing. To have standing would require someone in DC to a)have a firearm, b) bring it into the city, and c) take it in person to a Police Station in an attempt to register it. If they did that they would have standing when denied, they also would be arrested on the spot and would be looking at 5 to 15 years in prison for unlawful possession of a firearm. Not surprisingly nobody had standing. Lots of people broke the law in secret but since they didn't attempt to register it they lacked standing, many more requested to register a firearm but since they didn't have a firearm they also lacked standing. It wasn't until the Heller case that a civil rights group found a plaintiff with standing. Mr. Heller was a licensed security guard and as such had a limited license to carry a firearm ONLY on duty. While on duty he took it to a Police Station and attempted to have his work firearm registered for personal use and was denied. BLAMO.... the legal challenge survive a motion to dismiss and the rest is history. Even then the court cases took 7 years to reach a decision by the Supreme Court and required a legal team with costs over a million US dollars. Had there not been that "Heller loophole" it is entirely possible that the DC gun ban would still be standing today. Not due to any Constitutional merit but merely because no plaintiff had the required standing to challenge it.
