NY regulator issue subpoenas to firms tied to Bitcoin: WSJ

[Wagner2014]

If both sides want a dialogue, why are subpoenas necessary? Seems heavy handed.

NY regulator issue subpoenas to firms tied to Bitcoin: WSJ

(Reuters) - New York's top banking regulator has issued subpoenas to several companies associated with Bitcoin as part of an inquiry into business practices of the virtual currency industry, the Wall Street Journal reported, citing people familiar with the matter.

The subpoenas issued by the New York Department of Financial Services (DFS) seek information on antimoney laundering programs, consumer protection measures and investment strategies among other topics, the Journal said.

Companies that received subpoenas include Coinbase Inc, BitInstant and Coinsetter, the newspaper said.

http://www.reuters.com/article/2013/08/12/us-digitalcurrency-subpoena-bitcoin-idUSBRE97B03720130812

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[Wagner2014]

Regulator Examines Bitcoin Practices
New York Issues Subpoenas to Firms Tied to Bitcoin

New York's top banking regulator has issued subpoenas to roughly two dozen companies associated with bitcoin as part of a wide-ranging inquiry into the business practices of the fledgling virtual-currency industry, according to people familiar with the matter.

The subpoenas, from the New York Department of Financial Services, seek information on a range of topics, including antimoney-laundering programs, consumer-protection measures and investment strategies, according to the people.

Subpoenas were sent to firms backed by high-profile Bitcoin investors such as Cameron and Tyler Winklevoss.

The department, led by Benjamin Lawsky, also plans on Monday to issue a memo expressing concern that virtual-currency companies aren't complying with the state's money-transmission laws. As a result, the state is considering setting new guidelines that are specifically aimed at virtual currencies.

http://online.wsj.com/article/SB10001424127887323585604579006880143449754.html

[TheButterZone]

Both sides don't want a dialogue. Tyrants want to be tyrants and have us compromise economic liberty into oblivion.

[justusranvier]

Both sides don't want a dialogue. Tyrants want to be tyrants and have us compromise economic liberty into oblivion.

Seriously, fuck the US and the State of New York. I hear there are other countries in the world, and some of them actually welcome entrepreneurs.

[dddbtc]

Avalon needs a subpoena written to them as well.

[Kluge]

Do some Googling on Lawsky. He's a semi-famous, very aggressive regulator.

[gweedo]

It looks to be aimed exchanges, which I think is necessary, as said before exchanges and every bitcoin company should follow the laws. NY is very tough on these types of companies.

Seriously, fuck the US and the State of New York. I hear there are other countries in the world, and some of them actually welcome entrepreneurs.

Uhmm this has nothing to do with entrepreneurs. I have an LLC that is clearly a bitcoin related company and I didn't get any subpoena. Also NY is one of the best places to be an entrepreneur, I get a lot of good tax breaks.

[MSantori]

DFS seems to have learned from the industry’s reaction to the California DFI’s bare cease and desist letter.  DFS coupled their subpoenas with a public notice stating explicitly the purpose of their requests: to involve the industry in developing “appropriate regulatory guidelines” for the digital currency industry.  The Foundation will support its members and the bitcoin community as needed during this process.  This includes engagement with regulators and, where appropriate, legal defense.

[jgarzik]

See https://bitcointalk.org/index.php?topic=272269.0 for discussion of the NY memo, and Lawsky background.

[tempestb]

This could be a very good thing.  If the end result is acceptance by NY as being a legit cash exchange and way to do business, it will broaden Bitcoin's appeal because it will have a defacto "Stamp of Approval" for legal considerations.  That can go a LONG way towards making it more accepted.  Folks on the fence, knowing it's a safe bet legally may finally bite.  You could see Paypal finally latch onto it and boom... up goes the Bitcoin value.

That said, it could also be a total embarrassment if some unprofessional types show up and wear swastika arm bands and talk sh*t about the Government while declaring anarchy and throwing pies at people.  Ultimately it can go either way, but I tend to hope for the good outcome.

[jgarzik]

Since the beginning of bitcoin, I've been saying that US-based bitcoin exchanges likely need to register in 50 states plus federal level, to be compliant with existing laws.  It's a huge burden, but that was my common sense, I-Am-Not-A-Lawyer read of the law as it stood.  Nothing has changed that estimation.

However, once that hurdle is overcome, great things are possible.

[bassjoe]

Seriously, fuck the US and the State of New York. I hear there are other countries in the world, and some of them actually welcome entrepreneurs.

I don't understand this mentality. EVERY OTHER COUNTRY is going to want to make sure your precious decentralized Bitcoin isn't being used for criminal money laundering, child pornography, etc. However, that to you = US hates entrepreneurs! Seriously, the land of Google, Apply, Twitter, Facebook, Microsoft, Monsanato, Goldman Sachs, Intel -- just to list a few US-based WORLDWIDE leaders in their respective industries, many of which did not exist 20 years ago -- hates entrepreneurship? What universe are you living in?

The fact of the matter is that modern-day finance is largely routed through America. You cannot escape that fact. As such, American financial rules will eventually apply somewhere in your flows or if you want to expand beyond middle-of-fucking-nowhere-stan.

[MinermanNC]

This could be a very good thing.  If the end result is acceptance by NY as being a legit cash exchange and way to do business, it will broaden Bitcoin's appeal because it will have a defacto "Stamp of Approval" for legal considerations.  That can go a LONG way towards making it more accepted.  Folks on the fence, knowing it's a safe bet legally may finally bite.  You could see Paypal finally latch onto it and boom... up goes the Bitcoin value.

That said, it could also be a total embarrassment if some unprofessional types show up and wear swastika arm bands and talk sh*t about the Government while declaring anarchy and throwing pies at people.  Ultimately it can go either way, but I tend to hope for the good outcome.

Yes it could be, If BTC can clear the hoops with this challange, I agree its the beggining of perhaps a new road for BTC, especially with folks like paypal who have been watching bitcoin, and are giving thought to how they could bring it in as an added service. Watch BTC value shoot up then lets hope for the best. They do have some first rate class actors being subpoenaed for the most part. Especially with coinbase and alike. Should be interesting.

[moni3z]

Seriously, the land of Google, Apply, Twitter, Facebook, Microsoft, Monsanato, Goldman Sachs, Intel -- just to list a few US-based WORLDWIDE leaders in their respective industries, many of which did not exist 20 years ago -- hates entrepreneurship? What universe are you living in?

All those corporations are suing any competitors (and each other) with probably a hundred open lawsuits at any given time.

In other matters........ why would Butterfly Labs need a MSB to sell a product.