2013-12-12 Wired - U.S. Government Nastygram Shuts Down One-Man Bitcoin Mint

[NewLiberty]

So now if I make a physical cookie dough coin I am a money transmitter?

if it has a private key that gives access to virtual currency in  or on it perhaps using chocolate chips for encoding then yes you are a money transmitter.

How do you know?
The definitions seem vague and ill defined and without effective rationale.

I get that we don't want to be helping criminals, but most people aren't criminals and I'm not a policeman, just normal business in low volume and personal level.  Just what level of business needs all taxpayers to pay for monitoring and stored in the central database to prevent the purported threats?

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[NewLiberty]

Would be interesting to "transmit" money through the mail using colored Legos.  The Legos themselves wouldn't be the money, just the colors as they are stacked.

I am so going to send a lego private key for the holidays.

Maybe an embroidered one, on a pillow, using alpaca yarn.

[coins101]

Please report every single shop that sells gold or other precious metals and has a facility to post them to customers. And every shop that allows you to send them gold in exchange for cash.

Seriously. They are all money transmitters and if not regulated, they are breaking the law. File an online report to FinCen, its your duty to help protect the US of A.

[solex]

Please report every single shop that sells gold or other precious metals and has a facility to post them to customers. And every shop that allows you to send them gold in exchange for cash.

Seriously. They are all money transmitters and if not regulated, they are breaking the law. File an online report to FinCen, its your duty to help protect the US of A.

Is this really the case? Wasn't gold demonetized in the US? The Bernank calls it an "asset".

[Carlton Banks]

Would be interesting to "transmit" money through the mail using colored Legos.  The Legos themselves wouldn't be the money, just the colors as they are stacked.

I'm personally looking forward to the days when any person on the street can be arbitrarily arrested for money transmission.

"I didn't do it, I swear!"

"I caught you thinking about it, I know that look"


I wonder whether customs officials are gonna start inspecting non-uniform patterns in peoples shoe-hole lacing for codified private keys? Shuffling your deck of cards with you hooked up to a ECG? 

[NewLiberty]

Please report every single shop that sells gold or other precious metals and has a facility to post them to customers. And every shop that allows you to send them gold in exchange for cash.

Seriously. They are all money transmitters and if not regulated, they are breaking the law. File an online report to FinCen, its your duty to help protect the US of A.

Is this really the case? Wasn't gold demonetized in the US? The Bernank calls it an "asset".

If your idea is to break the system through over-compliance, that would not result in anything better than the way things are.

More reasonable is Mike's method of doing the perfunctory compliance requested, and then challenging the justification for it.
He's not a money transmitter if you are selling to purchasers.
Money transmitters send money to those other than from whom they received them, and there isn't any evidence that Mike is doing that.
FinCEN is concerned that with the volume of money, there might be some folks making use of Mike's good will efforts to engage in their own money transfers by buying things for others without Mike knowing and probably think he should be making sure the folks paying for something are the folks receiving it, which takes a bit of KYC.

Alternatively if he sent the stuff signature-required, that would also probably cover himself too.  FinCEN is really barking up the wrong tree here.  Mike's simply a merchant selling a product.

[NewLiberty]

Please report every single shop that sells gold or other precious metals and has a facility to post them to customers. And every shop that allows you to send them gold in exchange for cash.

Seriously. They are all money transmitters and if not regulated, they are breaking the law. File an online report to FinCen, its your duty to help protect the US of A.

Is this really the case? Wasn't gold demonetized in the US? The Bernank calls it an "asset".

It isn't the case, and it also wouldn't matter if gold were "money".  It still isn't money transmission in the sense of a regulated activity for simple merchants.  This isn't money laundering.

[TitanBTC]

Would be interesting to "transmit" money through the mail using colored Legos.  The Legos themselves wouldn't be the money, just the colors as they are stacked.

I'm personally looking forward to the days when any person on the street can be arbitrarily arrested for money transmission.

"I didn't do it, I swear!"

"I caught you thinking about it, I know that look"


I wonder whether customs officials are gonna start inspecting non-uniform patterns in peoples shoe-hole lacing for codified private keys? Shuffling your deck of cards with you hooked up to a ECG? 

You guys make me laugh on a very deep and philosphical level.

[TitanBTC]

Please report every single shop that sells gold or other precious metals and has a facility to post them to customers. And every shop that allows you to send them gold in exchange for cash.

Seriously. They are all money transmitters and if not regulated, they are breaking the law. File an online report to FinCen, its your duty to help protect the US of A.

Is this really the case? Wasn't gold demonetized in the US? The Bernank calls it an "asset".

If your idea is to break the system through over-compliance, that would not result in anything better than the way things are.

More reasonable is Mike's method of doing the perfunctory compliance requested, and then challenging the justification for it.
He's not a money transmitter if you are selling to purchasers.
Money transmitters send money to those other than from whom they received them, and there isn't any evidence that Mike is doing that.
FinCEN is concerned that with the volume of money, there might be some folks making use of Mike's good will efforts to engage in their own money transfers by buying things for others without Mike knowing and probably think he should be making sure the folks paying for something are the folks receiving it, which takes a bit of KYC.

Alternatively if he sent the stuff signature-required, that would also probably cover himself too.  FinCEN is really barking up the wrong tree here.  Mike's simply a merchant selling a product.

I agree completely that FinCEN is barking up the wrong tree.  The ONLY issue they have to stand on is the KYC issue. 

From what I understand, (and maybe you could clarify the justification here, Mike) because the bitcoin address Mike's receiving payment from isn't attached to an identity explicitly, he doesn't necessarily know that he is collecting money from the same person that he is sending money to.

Isn't that the crux of the issue?

[TitanBTC]

Please report every single shop that sells gold or other precious metals and has a facility to post them to customers. And every shop that allows you to send them gold in exchange for cash.

Seriously. They are all money transmitters and if not regulated, they are breaking the law. File an online report to FinCen, its your duty to help protect the US of A.

Is this really the case? Wasn't gold demonetized in the US? The Bernank calls it an "asset".

Gold has its own set of rules.  Dealers still have to report on purchases or sales over a certain amount, but its mainly to prevent gold being used as a tax shelter, from what I've been told. 

It also depends on whether it's bars of gold bullion or coins being sold, as the requirements for reporting sales / purchases of coins is less stringent.

Mike, you may want to look into the laws for selling your Silver coins specifically, because there are specific rules regarding precious metals that might serve as a loophole under which you can clearly operate without doing KYC/AML.

 

[NewLiberty]

Please report every single shop that sells gold or other precious metals and has a facility to post them to customers. And every shop that allows you to send them gold in exchange for cash.

Seriously. They are all money transmitters and if not regulated, they are breaking the law. File an online report to FinCen, its your duty to help protect the US of A.

Is this really the case? Wasn't gold demonetized in the US? The Bernank calls it an "asset".

Gold has its own set of rules.  Dealers still have to report on purchases or sales over a certain amount, but its mainly to prevent gold being used as a tax shelter, from what I've been told.  

It also depends on whether it's bars of gold bullion or coins being sold, as the requirements for reporting sales / purchases of coins is less stringent.

Mike, you may want to look into the laws for selling your Silver coins specifically, because there are specific rules regarding precious metals that might serve as a loophole under which you can clearly operate without doing KYC/AML.

There's not so much a loophole, as an entirely separate reporting regime for taxation purposes, though both IRS, and FinCEN are branches of the treasury dept, CFTC which governs reporting requirements for coins/bullion is an independent agency.  Its more the case that if Mike were putting stickers on American Eagles, he could run afoul of another reporting problem.
http://www.coinworld.com/articles/what-coins-are-reportable
FinCEN isn't a "revenue" (taxing) authority, it is the white collar crime enforcement branch of the treasury dept.  There is a lot of regulatory authority in the US for this stuff, but the FinCEN involvement is a bit weird, out of place.  It is hard to see where they have any reasonable interest worthy of such concerns.

[prophetx]

i thought about this more... the guy is selling a piece of metal with a code on it that stores money from the purchaser... it's like going to Cartier and buying a nice leather wallet and putting your credit cards and cash into it before completing the purchase of the wallet.

Did Cartier engage in money transmission?

Basically now EVERY COMMERCE TRANSACTION is money transmission?

I'm guilty I guess, I transmitted some money to the local coffee shop for some coffee.  Please arrest me.

[ajax3592]

The real problem that the govs have with bitcoin, is that it's no good for accepting bribes. Because, the bribery transaction would be on the blockchain, if not, then their bitcoin would be worthless.

[other_side]

More reasonable is Mike's method of doing the perfunctory compliance requested, and then challenging the justification for it.

The person who challenges FINCEN could be anyone, just by showing intention to start similar business and filing complaint that FINCEN regulation is a significant burden.
The cost to file (Federal court) is $350.

[NewLiberty]

i thought about this more... the guy is selling a piece of metal with a code on it that stores money from the purchaser... it's like going to Cartier and buying a nice leather wallet and putting your credit cards and cash into it before completing the purchase of the wallet.

Did Cartier engage in money transmission?

Basically now EVERY COMMERCE TRANSACTION is money transmission?

I'm guilty I guess, I transmitted some money to the local coffee shop for some coffee.  Please arrest me.

This is very apt.
Casascius pieces are wallets.  Part of the payment goes in the wallet.
If the invoices were itemized as such, then it would be about the same as you describe.

I can't see how this is money transfer unless the wallets are going directly to persons other than the purchasers.
It is a product sale.

This registration requirement ought be challenged, even if you are also complying for simplicity's sake.

[kjlimo]

Mike did a fantastic job of getting Bitcoin into the mainstream. The photos of his physical coins are everywhere and much more advanced-looking than any ordinary coin.

Eventually, I expect the Smithsonian will be wanting one to put on display.

One is already on display in some European (I believe England) museum.

[klondike_bar]

i thought about this more... the guy is selling a piece of metal with a code on it that stores money from the purchaser... it's like going to Cartier and buying a nice leather wallet and putting your credit cards and cash into it before completing the purchase of the wallet.

Did Cartier engage in money transmission?

Basically now EVERY COMMERCE TRANSACTION is money transmission?

I'm guilty I guess, I transmitted some money to the local coffee shop for some coffee.  Please arrest me.

This is very apt.
Casascius pieces are wallets.  Part of the payment goes in the wallet.
If the invoices were itemized as such, then it would be about the same as you describe.

I can't see how this is money transfer unless the wallets are going directly to persons other than the purchasers.
It is a product sale.

This registration requirement ought be challenged, even if you are also complying for simplicity's sake.

It is more like buying a leather wallet online that happens to come with 10 crisp $100 bills in it, and paying $1000 + the price of the wallet.

I can see where it presents issues, but i can also see that there must be room for more clarity

[User705]

Would be interesting to "transmit" money through the mail using colored Legos.  The Legos themselves wouldn't be the money, just the colors as they are stacked.

Perhaps one can paint a QR code and sell it as art.  Can you still do it by selling just the coins with no XBT value on them at all?

[NewLiberty]

So now if I make a physical cookie dough coin I am a money transmitter?

if it has a private key that gives access to virtual currency in  or on it perhaps using chocolate chips for encoding then yes you are a money transmitter.

How do you know?
The definitions seem vague and ill defined and without effective rationale.

I get that we don't want to be helping criminals, but most people aren't criminals and I'm not a policeman, just normal business in low volume and personal level.  Just what level of business needs all taxpayers to pay for monitoring and stored in the central database to prevent the purported threats?

please get a sense of humor...

Cookies cant be laundering money, they are crumby at it.
and besides, I spent all my dough when the chips were down.

(see, my humor isn't really better than taking it seriously)

[AirFlame]

So how mutch coins he wasted ? Wtf what happend to the coins ?