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Author Topic: Are These Websites Fall Under Money Transfer Service?  (Read 1387 times)
marketorder
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September 09, 2013, 11:53:49 PM
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These sites look like they could be considered money transfer sites and could be targeted by US government for the appropriate permits? Even though they never exchange US currency are these sites legal to operate if located in the US without having to have special money transfer permits, etc?

http://satoshibox.com

https://coinlock.com
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acoindr
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September 10, 2013, 12:31:13 AM
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I didn't really look at what those sites do, but the thing to consider is whether or not a site accepts and transfers currency from one user to another. It doesn't matter if that is virtual currency or USD or anything that could substitute for currency. It also doesn't matter if it's all virtual currency with no USD involved. That all counts as money transmission under the guidance issued by FinCEN.

One exception is if the site provides payment settlement. For example, BitPay allows users to send them virtual currency, like Bitcoin, which they then give to a merchant in the form of USD or bitcoins. This doesn't count as being a money transmitter because something is being sold, for which BitPay is simply facilitating payment settlement. Now if BitPay were to allow users to send bitcoins to merchants without anything being sold then BitPay would need to register as a money transmitter. That's my understanding.

I'm not a lawyer, but I've been following this regulation subject since the FinCEN guidance was released in March. I don't think I'm too far off.
marketorder
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September 10, 2013, 12:39:54 AM
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Those web sites allow you to make a payment link for sales of digital downloads in Bitcoins only. They are given a digital download in exchange for Bitcoins. The web site collects a small fee from the sale. Hopefully that makes sense 


I didn't really look at what those sites do, but the thing to consider is whether or not a site accepts and transfers currency from one user to another. It doesn't matter if that is virtual currency or USD or anything that could substitute for currency. It also doesn't matter if it's all virtual currency with no USD involved. That all counts as money transmission under the guidance issued by FinCEN.

One exception is if the site provides payment settlement. For example, BitPay allows users to send them virtual currency, like Bitcoin, which they then give to a merchant in the form of USD or bitcoins. This doesn't count as being a money transmitter because something is being sold, for which BitPay is simply facilitating payment settlement. Now if BitPay were to allow users to send bitcoins to merchants without anything being sold then BitPay would need to register as a money transmitter. That's my understanding.

I'm not a lawyer, but I've been following this regulation subject since the FinCEN guidance was released in March. I don't think I'm too far off.
acoindr
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September 10, 2013, 12:55:58 AM
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Those web sites allow you to make a payment link for sales of digital downloads in Bitcoins only. They are given a digital download in exchange for Bitcoins. The web site collects a small fee from the sale. Hopefully that makes sense 

I believe that qualifies as an exception to being a money transmitter similar to BitPay, in particular under exemption (F). This BitPay blog post may help you:

http://blog.bitpay.com/2013/03/how-fincen-guidelines-affect-bitpay.html
marketorder
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September 10, 2013, 01:58:52 AM
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Thank you I'll look into that


Those web sites allow you to make a payment link for sales of digital downloads in Bitcoins only. They are given a digital download in exchange for Bitcoins. The web site collects a small fee from the sale. Hopefully that makes sense 

I believe that qualifies as an exception to being a money transmitter similar to BitPay, in particular under exemption (F). This BitPay blog post may help you:

http://blog.bitpay.com/2013/03/how-fincen-guidelines-affect-bitpay.html
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September 19, 2013, 03:38:53 PM
 #6

ture?
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