Senate hearing - any real work?

[Walter Rothbard]

I thank the U.S. Senate for the attention they have brought to Bitcoin today, and the resultant price rise.

Now - any word on getting all the various shuttered Bitcoin businesses back in business?  Did the Senate lift a finger to help Tangible Cryptography?  To bring back BitInstant?  To get MtGox's bank accounts working again?

Or was the whole plan here to first crush the original Bitcoin startups with stringent financial regulation, then declare Bitcoin "legitimate" so that established players could take over?

[Mondy]

They did bring it in a relatively good i hope?

[franky1]

the video of the senate hearing is here:
http://www.c-spanvideo.org/program/DigitalCu

in short FinCen want to ensure that virtual currencies operate legitimately and honestly by, where money exchangers/financial institutions that can threaten the U.S financial Systems require regulations (bitstamp, mtgox, etc, (anything swapping bitcoin for U.S Dollar as a business)

as said by Jennifer shasky calvery

FinCen will do everything in its power to stop abuses of the U.S Financial system

all the speakers seam to understand that the negative/illicit uses potential of digital currencies do not outweigh the potential positives.

as said by Sen Tom Carper

i had my staff to talk to me  about the early days of the internet, and there were alot of thoughts raised about how it may foster alot of illegal activities, but there were some that said there could be alot of benefit  aswell. and i asked them was this analogy applicable also to digital currencies

the other parties agreed that as long as they keep to the controls needed to protect the U.S financial system, then there are benefits to using these digital currencies

shasky went on to say that fincen control is only the U.S financial system, and have not and cannot declare that bitcoin is legal/illegal because it has nothing to do with them

Fincen has never opined and still is not opining on whether virtual currency is a "real currency" or a commodity as those questions are outside our purview. we are the anti-money laundering/counter-terrorist financing regulator for federal government so our regulations spoke to that and only that

a speaker for the FBI also agreed bitcoin is not in their jurisdiction to directly be involved, they do however investigate any illegal activity affecting americans and if found the perpetrator is within the U.S jurisdiction. they would then pursue the matter

even experts from child exploitation agency's also agree that regulation at the FIAT/Dollar exchange businesses levels is required, while preserving  the individuals privacy of transactions peer- to - peer to not hamper the innovation

the general opinion of mine is that they see it like the internet. something new to run towards not run away from, and they fully understand they cant control bitcoin itself, but they do have to ensure that the edges into/the gateways to bitcoin via the U.S dollar are all complying with U.S regulation, and idividuals living in the U.S stay within the law

[Walter Rothbard]

But my question is - did the Senate throw their might behind telling the banks and state agencies and other regulatory authorities to lay off the people who have been servicing the Bitcoin community?  I want to see fastcash4bitcoins.com and BitInstant back in operation like yesterday.

[applelover]

But my question is - did the Senate throw their might behind telling the banks and state agencies and other regulatory authorities to lay off the people who have been servicing the Bitcoin community?  I want to see fastcash4bitcoins.com and BitInstant back in operation like yesterday.

rothbard, no, this was just a hearing for people to give statements, answer questions, get some ideas and conversation on bitcoins started... no actions were taken.

[franky1]

But my question is - did the Senate throw their might behind telling the banks and state agencies and other regulatory authorities to lay off the people who have been servicing the Bitcoin community?  I want to see fastcash4bitcoins.com and BitInstant back in operation like yesterday.

the general points are if your sending bitcoins to another person, dont worry about regulation.

if you are a business exchanging fiat then get regulated, this has been law for most countries even before satoshi came along. what most people dont realise is that some of these 'exchange level businesses' did not sign up to regulators at all, another few businesses did sign up to regulators, but did not adhere to the rules within the regulators policies. thirdly a few businesses not disclose to their banks a fully detailed and honest business plan.

i know that there were fiat-bitcoin exchange businesses that set up bank accounts with a business plan of, in short
"we sell advertising"
which later due to a number of reasons that it came to light that their 'product' was not the product, the bank had no choice but to close the account. this applies to a few highly used 'exchange level businesses'.

as a separate matter bitcoinica and intersango.. at first they totally evaded AMLKYC, so thats why they disappeared (although there were attempts to bring them back to life)

the key is, if your doing fiat-bitcoin swaps as a business, do not lie, do not hide, be prepared, be upfront, and follow the rules of the country that's wrote on the bank note you accept.

lastly banks themselves have their own policies and risk/reward challenges to meet. my bank personally loves my bitcoin business plan. other banks may not. this is not about law and bitcoins being deemed legal/illegal. its about the banks own decision based on the business plan of the business and the risk/reward of the bank in question.

but that is a diversion of this topics question.

the answer is hearings do not 'rule' or create law or demand action. they use it as a gathering information session..

[Melbustus]

But my question is - did the Senate throw their might behind telling the banks and state agencies and other regulatory authorities to lay off the people who have been servicing the Bitcoin community?  I want to see fastcash4bitcoins.com and BitInstant back in operation like yesterday.

As others noted, it was just informational. That said, the takeaways were:
1) Bitcoin is a legitimate way to send money/value.
2) Bitcoin businesses need to obey existing AML/KYC regs and obtain relevant money transmission licensing.
3) The gov generally recognizes that it should strike a balance to curtail criminal activity while still allowing for significant financial innovation.
4) The three agencies represented today all believe they *currently* have the necessary tools to satisfy their mandates; eg, mostly AML/KYC rules. So that means no *new* legislation is likely, which is both good and bad....good because obviously regulators could toss a curve-ball if they start making new laws/regs, but bad because the existing state-by-state MT stuff is really onerous; a point nicely made by Patrick Murck when he noted how the EU does it better.

But....to your point about bitcoin businesses getting bank accounts, this hearing will likely help banks not be paranoid. It was clear from all three agencies that they're fine with bitcoin businesses as long as the usual AML/KYC stuff is followed; eg, there's nothing fundamentally different about bitcoin in terms of regulation. And that's what banks need to hear.

But it's going to take time for that realization to fully trickle down to bank administrators....and we still need to see what the tone of tomorrow's hearings are.

[franky1]

+1

what i would like to see come from this in the future is this

1) just like in europe. if you have a licence in 1 state, that can be used to cover a majority of the costs/ legalities in being licensed in other states. meaning instead of paying hefty fee's per state. you pay the hefty fee for the state your company is registered in, to ensure your state fully regulates and oversees your business policies are done correctly. and then small, nominal fee's for other states purely to cover and variant in the 'rules' of that state.

2) that U.S agencies only use their rule of law on U.S based companies, but obviously if a business is based in germany, with german employee's would have to obide by german law/regulation. meaning i do not want U.S government thinking they own everything bitcoin related. only the businesses registered in their juristiction

3) to encourage banks to accept bitcoin business, as it will truly encourage FIAT circulation within the borders of the country by having the fiat left in banks of that country and only bitcoin crosses the borders. unlike the old way of enveloping bank notes and sending them abroad, where they get lost out of circulation.

[AnonyMint]

I quickly looked for her twitter account's main page. It says "happily married". Translation: "OK people? Back off I am taken already!" Grin

Was thinking the same thing. Never seen this before in a Twitter description. There must be a lost of Bitcoin guys hiting on her.

I was wondering why no one mentioned Zerocoin or Coinjoin. Which would be a huge deal for all government agencies. Don't they know about that or what is the deal here?

What about Zerocoin or Coinjoin?

Doesn't help at all for several reasons. For one thing, you are only as anonymous as the others who use it with you, because once they reveal their identities, then you can be isolated. The probability of you being found increases over time, as more and more downstream trail on the public ledger reveals more and more identities.

BitCON just can't be made anonymous. The only way is to build in the anonymity into the protocol of the coin.

The Senate Committee conversation today definitely was interesting this seems almost like a moot topic as the government itself is still working on Guidelines

How can they enforce blacklists?

Now you know why I am working on a more anonymous altcoin.

We will need an escape hatch very soon.

Will they whitelist? Which means if they don't know your identity they block you. But where is the block placed? At the exchanges I presume where they have AML and KYC authority?

Perhaps they declare it is illegal to receive coins which are not whitelisted. So then anonymous coins won't be accepted by anyone who is not anonymous.

Anonymity is an all or nothing unless some countries will resist USA edicts.

We are heading into cyberwarfare. You must go anonymous or be harvested by the "confiscate all wealth" coming when the global economy implodes.

You will have no choice but to go anonymous, or you lose nearly everything. This is what most people don't realize yet.

The law isn't going to help you. Again read my thread:

https://bitcointalk.org/index.php?topic=323988.msg3626642#msg3626642
https://bitcointalk.org/index.php?topic=323988.msg3627932#msg3627932

The elite have a definitive plan to confiscate everything.

One of the plans floated by Larry Summers and Paul Krugman is to force everyone into electronic currency, then deduct from your account automatically by forcing negative interest rates. They say this is the only way to keep funding socialism forever.

You all don't understand. We are really headed into a global nightmare of unfathomable wickedness.

They don't plan to end this. This is forever in their mind. Which means we will go into war and wickedness.

[Walter Rothbard]

meaning i do not want U.S government thinking they own everything bitcoin related. only the businesses registered in their juristiction

Kind of scary that the government can claim to own businesses.  We are nothing but serfs.

[AnonyMint]

Seems most are breathing a sigh of relief thinking that the hearing added no push for new regulations or laws. What they said was the existing AML and KYC is sufficient for now.

Hello? KYC means what? Know Your Customer.

That means merchants required to know who you are. That means reporting to the government.

Electronic currency on a public ledger means they can ramp up these existing laws to require e-file reporting on smaller and smaller transactions.

The NSA is mopping everything. Soon the FinCEN or DHS or... will be mopping up all transaction identities.

If you aren't whitelisted, the merchant can't accept you.

666 anyone?

Don't be so naive. These transformations move slowly enough that you boil like a frog.