2013-08-16 PaymentSource: Should Regulations Treat Bitcoin Miners as Money Trans

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http://www.paymentssource.com/news/should-regulations-treat-bitcoin-miners-as-money-transmitters-3015149-1.html

In March, FinCEN issued guidance on virtual currencies, viewing exchangers and administrators as MSBs. Since then, Bitcoin businesses have been scrambling to take the appropriate steps to come into compliance with the FinCEN guidance, including creating Anti-Money Laundering and Know Your Customer programs. Businesses are also working to obtain licenses from states that now look at them as money transmitters.

Under the FinCEN guidance, “An administrator is a person engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.”

“I don’t think the intention was” to regulate the miners, Rinearson says. “But it’s right there in black and white.” Under a literal reading of the guidance, “a miner should be registered as an MSB.”

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[vokain]

If they exchange their mined coins directly to buyers for USD perhaps. Otherwise they shouldn't.

[xcsler]

Are gold miners money transmitters?

[superduh]

Big dif between miners and pools.. Laws and ideas are a step behind

[marcus_of_augustus]

Let's get down to specifics instead of vague ill-informed commentary shall we?

The coinbase transaction itself is not like a currency issuance, the currency issuance was done when Satoshi put 21 million bitcoin into the protocol. The coinbase transactions are merely discovering these previously issued currency by finding the correct block hashes. And it would actually be the pools (or whoever does the actual coinbase transactions) since pool miners are exchanging processing power for btc, which is nothing like currency issuance.

“I don’t think the intention was” to regulate the miners, Rinearson says. “But it’s right there in black and white.” Under a literal reading of the guidance, “a miner should be registered as an MSB.”

I don't think Rinearson has come anywhere close to reading the bitcoin protocol, the coinbase transaction mechanism is right there in black and white, yet she seems to be claiming to be an expert on bitcoin issuance and 'regulations' ... I guess we are going to be overrun with these legal shysters looking to clip the ticket henceforth.

[solex]

Under the FinCEN guidance, “An administrator is a person engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.”

There is no method of withdrawal from circulation, unless you include destroying the private key, which any user of bitcoins could do. There is an argument that they are not permanently unrecoverable.

The coinbase transaction itself is not like a currency issuance, the currency issuance was done when Satoshi put 21 million bitcoin into the protocol. The coinbase transactions are merely discovering these previously issued currency by findiing the correct block hashes. And it would actually be the pools (or whoever does the actual coinbase transactions) since pool miners are exchanging processing power for btc, which is nothing like currency issuance.

Agreed. So, arguably miners are not issuing bitcoins either.

[TraderTimm]

Spot on, the entire 21 million bitcoins existed the moment they were defined as an upper limit in the Bitcoin implementation.

The miners are just getting the keys to all these 'rooms' in a rather large building - if you need a physical metaphor. Eventually these bozos will get it, they're not used to thinking hard about abstract problems.