Bitcoin Forum
November 19, 2017, 11:21:37 AM *
News: Latest stable version of Bitcoin Core: 0.15.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Poll
Question: Should we be proactive about compliance?
Be proactive - 23 (65.7%)
Be reactive - 12 (34.3%)
Total Voters: 35

Pages: [1] 2 »  All
  Print  
Author Topic: Bitstamp is proactive about compliance  (Read 5639 times)
Wary
Hero Member
*****
Offline Offline

Activity: 798


Who's there?


View Profile
September 25, 2013, 09:37:58 PM
 #1

Now to withdraw bitcoins from Gox and Bitstamp you have to be verified.
https://www.bitstamp.net/article/bitstamp-new-verification-requirements/
It seems that nobody asked them to introduce these changes. As they say "Bitstamp is proactive about compliance".
Is being proactive with state's requirements a good idea?

Fairplay medal of dnaleor's trading simulator. Smiley
Join ICO Now A blockchain platform for effective freelancing
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1511090497
Hero Member
*
Offline Offline

Posts: 1511090497

View Profile Personal Message (Offline)

Ignore
1511090497
Reply with quote  #2

1511090497
Report to moderator
1511090497
Hero Member
*
Offline Offline

Posts: 1511090497

View Profile Personal Message (Offline)

Ignore
1511090497
Reply with quote  #2

1511090497
Report to moderator
1511090497
Hero Member
*
Offline Offline

Posts: 1511090497

View Profile Personal Message (Offline)

Ignore
1511090497
Reply with quote  #2

1511090497
Report to moderator
pedrog
Legendary
*
Offline Offline

Activity: 1624



View Profile
September 25, 2013, 10:41:26 PM
 #2

Sure, do you prefer accounts frozen like MtGox?

Mike Christ
aka snapsunny
Legendary
*
Offline Offline

Activity: 1092



View Profile
September 28, 2013, 07:59:37 PM
 #3

It's a good idea, since the state can squash any exchange it wishes if it suspects it of supporting "the bad guys"--usually terrorists or criminals of some sort.  You do not survive by pushing against the state; you survive through adapting.  That's the entire point of the state, I think.

RapidBalls
Full Member
***
Offline Offline

Activity: 140



View Profile WWW
September 28, 2013, 08:10:14 PM
 #4

KYC is so important to any business who operates such as BitStamp

Totally for what they have done.

[No Account Required / Provably Fair / 4 Games / Bet and Go / Free Daily BitCoins] http://rapidballs.eu
GoldSilverBitcoin
Member
**
Offline Offline

Activity: 81


Gold Silver Bitcoin: It's your choice


View Profile WWW
September 30, 2013, 08:29:52 AM
 #5

As a business in the space, I feel it is essential to be compliant if you're in the US, or even if you are doing business with US citizens. As a consumer, I personally would not do business that did not take compliances seriously because then i would consider any data I gave to them to be compromised.


bitcoin44me
Full Member
***
Offline Offline

Activity: 238


View Profile
September 30, 2013, 10:43:17 AM
 #6

Sure, do you prefer accounts frozen like MtGox?


I have to agree with him.
You are free to not verify your account, and stop using bitstamp, but if you want a sustainable exchanger, it has to be legal and follow rules.

BTC.sx - Leveraged Bitcoin Trading.
Get paid weekly for your signature.
niko
Hero Member
*****
Offline Offline

Activity: 742


There is more to Bitcoin than bitcoins.


View Profile
September 30, 2013, 02:57:30 PM
 #7

Bitcoin exchanges exchange bitcoins for government-issued money. It makes perfect sense to accept and play by the rules of those governments. If anything there bothers you, take it up to your government, or simply quit using their money and remain within Bitcoin ecosystem.

They're there, in their room.
Your mining rig is on fire, yet you're very calm.
MSantori
Full Member
***
Offline Offline

Activity: 168



View Profile
September 30, 2013, 05:18:45 PM
 #8

It's good that they are doing some customer identification, but, from a US legal perspective, that doesn't cut it.  If Bitstamp is a foreign MSB servicing US customers, then it is subject to the so-called Foreign MSB Rule, requiring, at minimum, FinCEN registration.  It also must register in those states that have adopted extraterritorial jurisdiction, like NY.

Lame metaphor: It's good that Bitstamp knows how to drive and isn't getting into any accidents.  But if it ever gets pulled over, that won't matter if it doesn't have a drivers' license.

Marco Santori is a lawyer, but not your lawyer, and this is not legal advice.  If you do have specific questions, though, please don't hesitate to PM me.  We've learned this forum isn't 100% secure, so you might prefer to email me.  Maybe I can help!  Depending upon your jurisdiction, this post might be construed as attorney advertising, so: attorney advertising Smiley
Bitco
Full Member
***
Offline Offline

Activity: 226



View Profile
October 01, 2013, 06:04:42 PM
 #9

It's good that they are doing some customer identification, but, from a US legal perspective, that doesn't cut it.  If Bitstamp is a foreign MSB servicing US customers, then it is subject to the so-called Foreign MSB Rule, requiring, at minimum, FinCEN registration.  It also must register in those states that have adopted extraterritorial jurisdiction, like NY.

Regarding Fincen rules, they would still have to have some sort of US presence.  Does bitstamp even have a bank account in the US?

By 'Foreign MSB Rule' I assume you mean the 2011 amendments to 31 CFR 1010.100(ff), which replaced

Quote
Each agent, agency, branch, or office within the United States of any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the capacities listed in paragraphs (ff)(1) through (ff)(6) of this section.

with

Quote
A person wherever located doing business , whether or not on a regular basis or as an organized or licensed business concern, wholly or in substantial part within the United States, in one or more of the capacities listed in paragraphs (ff)(1) through (ff)(7) of this section. This includes but is not limited to maintenance of any agent, agency, branch, or office within the United States.

However, to be considered a 'financial institution' under 31 CFR 1010.100(t), they would have to have an "agent, agency, branch, or office within the United States".

The state law issues are more messy.  The scienter requirement of 18 USC § 1960 only applies to knowingly operating a money transmitting business and not whether it was required to be licensed under state law.

If a New York resident wires money to Bitstamp, is Bitstamp really operating a money transmitting business in New York?  They weren't the ones who sent the money from NY.

What a mess.

MSantori
Full Member
***
Offline Offline

Activity: 168



View Profile
October 01, 2013, 11:55:23 PM
 #10

I agree that it is a mess, but I'm not sure I agree with your point about (t).  Why do you say the definition of "financial institution" is relevant to the foreign MSB analysis? Neither the definition of "money transmitter" nor "money services business" rely on the term "financial institution".

FinCEN doesn't agree either: http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-A001.html

Ultimately, I think this extraterritorial exercise of jurisdiction is probably legally justified.  Servicing a customer in a particular jurisdiction typically subjects you to that jurisdiction's ...jurisdiction for claims arising out of that transaction.  That is, it probably satisfies constitutional "minimum contacts" and "traditional notions of fair play and substantial justice."  At least for the civil claims, I think it would survive judicial scrutiny.

What do you think?

Marco Santori is a lawyer, but not your lawyer, and this is not legal advice.  If you do have specific questions, though, please don't hesitate to PM me.  We've learned this forum isn't 100% secure, so you might prefer to email me.  Maybe I can help!  Depending upon your jurisdiction, this post might be construed as attorney advertising, so: attorney advertising Smiley
peonminer
Hero Member
*****
Offline Offline

Activity: 602



View Profile
October 01, 2013, 11:56:01 PM
 #11

PROACTIVE

Tip Jar: 1kyugddNoabThZka1dCZApQK8csVkUVLq
TheButterZone
Legendary
*
Offline Offline

Activity: 1960


Nemo me impune lacessit


View Profile WWW
October 02, 2013, 01:29:28 AM
 #12

Be proactive as you can possibly be, and it'll never be enough for the totalitarian state.

Bitco
Full Member
***
Offline Offline

Activity: 226



View Profile
October 02, 2013, 01:35:55 PM
 #13

I agree that it is a mess, but I'm not sure I agree with your point about (t).  Why do you say the definition of "financial institution" is relevant to the foreign MSB analysis? Neither the definition of "money transmitter" nor "money services business" rely on the term "financial institution".

Because many of the rules apply to 'financial institutions' rather than MSBs specifically, and the definition of financial institution in (t) includes a money services business as defined in paragraph (ff).


Ultimately, I think this extraterritorial exercise of jurisdiction is probably legally justified.  Servicing a customer in a particular jurisdiction typically subjects you to that jurisdiction's ...jurisdiction for claims arising out of that transaction.  That is, it probably satisfies constitutional "minimum contacts" and "traditional notions of fair play and substantial justice."  At least for the civil claims, I think it would survive judicial scrutiny.

What do you think?

I think you're probably right.  Whether such a judgement would be enforceable is another matter.

Bitstamp's new verification requirements are mostly irrelevant to this, except insofar as having a verified address would allow them to exclude customers in certain problematic jurisdictions.

If a state prosecutor goes after bitstamp for not having a state license or surety bond, and Bitstamp knew they had customers in that state, it's not really going to matter how carefully they checked those names and addresses.

markjamrobin
Sr. Member
****
Offline Offline

Activity: 434


A Decentralized Social Marketplace


View Profile
October 02, 2013, 01:40:56 PM
 #14

I strongly believe that they should be proactive, because Gox really wasn't and had a lot of money seized because of it.


        ▄██▄▄▄▄▄▄██
      ▄███████████▄
     ██████▀▀████████▄
    ███████▄▄ ▀▀
    ▀██████████████▄▄▄
     ▀█████████████████▄
        ▀▀██▀████████████
          ██ ██ ▐█████████
  ▄▄███▄▄ ██ ██ ▐█████████
 ███████████▄█████████████
▐████████████████████████▀
▐███████████████████████▀
 ▀███████████████████▀▀
   ▀▀████████████
       ▀▀███████
           ▀▀██

.
Soma
║║
║║
║║
.
║║
║║
║║
║║
║║
║║
║║
║║
║║



             ▄██▄
     ▄      ▐████   ▄▄
   █████     ██████████
    █████████████████▀
 ▄████████████▀████▌
██████████     ▀████     
 ▀▀   █████     ██████████
      ▀████▌▄████████████▀
    ▄▄▄███████████████▌
   ██████████▀    ▐████
    ▀▀▀  ████▌     ▀▀▀
         ▀███▀



                 ▄████▄▄    ▄
██             ████████████▀
████▄         █████████████▀
▀████████▄▄   █████████████
▄▄█████████████████████████
██████████████████████████
  ▀██████████████████████
   █████████████████████
    ▀█████████████████▀
      ▄█████████████▀
▄▄███████████████▀
   ▀▀▀▀▀▀▀▀▀▀▀



       ▄▄▄▄▄▄
    ▄████████
    █████▀▀▀▀
   ▐████
   ▐████
████████████
████████████
   ▐████
   ▐████
   ▐████
   ▐████
kuusj98
Hero Member
*****
Offline Offline

Activity: 798


Why you looking here? Read the goddamn tread!


View Profile
October 07, 2013, 04:17:34 PM
 #15

You can't be proactive enough, we have already seen the consequenses with MTGox haven't we?
QikCoin
Newbie
*
Offline Offline

Activity: 5


The Future of Ecommerce


View Profile
October 07, 2013, 04:46:40 PM
 #16

Regardless of the Federal Money Service Business determination or the  US State Money Transmitter regulations and jurisdiction, the US Department of Treasury has had great success policing foreign financial institutions by issuing 311 Actions.

"Section 311 of the USA PATRIOT Act provides the Secretary with a range of options that can be adapted to target specific money laundering and terrorist financing risks most effectively. These options provide the Treasury Department with a powerful and flexible regulatory tool to take actions to protect the U.S. financial system from specific threats."

The US Treasury can essentially brand a financial institution (bank or non-bank) with money laundering or financing terrorist activity claims then all of the targeted institutions partners could potentially freeze their assets and cut off their banking relationship to avoid the reputation hit.

Juan Zarate, a former Assistant Secretary of the Treasury, discusses the effectiveness of this effort in his recent book "Treasury Wars."
http://www.amazon.com/Treasurys-War-Unleashing-Financial-Warfare/dp/1610391152.

The point being that the US has ways of reaching beyond its boarders to "protect the U.S. financial system from specific threats."

Not only it is great that Bitcoin exchanges including Bitsamp are being pro-active about compliance but it will be absolutely necessary if these businesses and this industry is to continue to grow and thrive.
smoothie
Legendary
*
Offline Offline

Activity: 2072


LEALANA Monero Physical Silver Coins


View Profile
October 07, 2013, 04:51:18 PM
 #17

So far bitstamp has been a much better experience than gox ever was.


███████████████████████████████████████

            ,╓p@@███████@╗╖,           
        ,p████████████████████N,       
      d█████████████████████████b     
    d██████████████████████████████æ   
  ,████²█████████████████████████████, 
 ,█████  ╙████████████████████╨  █████y
 ██████    `████████████████`    ██████
║██████       Ñ███████████`      ███████
███████         ╩██████Ñ         ███████
███████    ▐▄     ²██╩     a▌    ███████
╢██████    ▐▓█▄          ▄█▓▌    ███████
 ██████    ▐▓▓▓▓▌,     ▄█▓▓▓▌    ██████─
           ▐▓▓▓▓▓▓█,,▄▓▓▓▓▓▓▌          
           ▐▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▌          
    ▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓─  
     ²▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓╩    
        ▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▀       
           ²▀▀▓▓▓▓▓▓▓▓▓▓▓▓▀▀`          
                   ²²²                 
███████████████████████████████████████

. ★☆ WWW.LEALANA.COM        My PGP fingerprint is A764D833.        SMOOTHIE'S HEALTH AND FITNESS JOURNAL          History of Monero development Visualization ★☆ .
LEALANA  PHYSICAL MONERO COINS 999 FINE SILVER.
 
theonewhowaskazu
Sr. Member
****
Offline Offline

Activity: 448


View Profile
October 07, 2013, 08:00:09 PM
 #18

Personally I have no problem with governmental regulation at the exchanger level, because its super easy to launder the Bitcoins after or before exchanging in or out. USD can already be easily tracked, so it makes sense to make the exchange process as clean as possible.

niko
Hero Member
*****
Offline Offline

Activity: 742


There is more to Bitcoin than bitcoins.


View Profile
October 10, 2013, 06:51:11 AM
 #19

Personally I have no problem with governmental regulation at the exchanger level, because its super easy to launder the Bitcoins after or before exchanging in or out. USD can already be easily tracked, so it makes sense to make the exchange process as clean as possible.

Can you provide a hypothetical example explaning how bitcoins can be laundered? To get started, let's assume I have been milking my neighbour's cows and selling the raw milk for bitcoins, falsely advertising it as mother's milk. There are several more-or-less illegal aspects of my business. I need to launder those coins. Please enlighten me. Let your creativity run wild. The end goal is to have the coins laundered, meaning I can convincingly demonstrate that my coins in fact originate from some sort of legal business.

They're there, in their room.
Your mining rig is on fire, yet you're very calm.
pedrog
Legendary
*
Offline Offline

Activity: 1624



View Profile
October 10, 2013, 01:47:32 PM
 #20

Personally I have no problem with governmental regulation at the exchanger level, because its super easy to launder the Bitcoins after or before exchanging in or out. USD can already be easily tracked, so it makes sense to make the exchange process as clean as possible.

Can you provide a hypothetical example explaning how bitcoins can be laundered? To get started, let's assume I have been milking my neighbour's cows and selling the raw milk for bitcoins, falsely advertising it as mother's milk. There are several more-or-less illegal aspects of my business. I need to launder those coins. Please enlighten me. Let your creativity run wild. The end goal is to have the coins laundered, meaning I can convincingly demonstrate that my coins in fact originate from some sort of legal business.

1. You open a webstore where you sell spells
2. Mix the coins
3. You buy yourself a lot of spells
4. ...
5. Profit!

Pages: [1] 2 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!