Bitcoin in France: first legal decision directly related to Bitcoin?

[defxor]

And indeed, if Bitcoin is defined as online currency due to the fact it has market value and is traded in exchange for things, then WoW gold must also be online currency. Indeed, WoW gold even has a central issuer.

That's the major difference I took away from MagicalTux' post with regards to how Bitcoin compares to WoW gold, Zynga poker chips etc.

“This case is particularly interesting because it involved a UK court recognising virtual currency - in this case, Zynga chips - as legal property which can be protected by existing UK criminal laws.

“The court effectively found that, even though virtual currency isn't real and is infinite in supply, it still can deserve legal protection in the same way as real world currency”.

http://www.develop-online.net/news/36921/Zynga-hacker-faces-jail-after-12m-theft

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[MagicalTux]

Mark, if the court does decide in favor of Bitcoin being a currency, will you give account holders a period of time to withdraw funds before enforcing KYC requirements, or should concerned individuals remove their funds ahead of the court decision?

If this happens we'll probably stop operating in France. This has no impact in Japan where we are doing other efforts to get a status for bitcoins by talking directly with the FSA (not the UK one, the Japanese one), MOF (Ministry of Finance) and KLFB (Kanto Local Finance Bureau).

I'd speculate that that bitcoin will be declared as a "virtual currency" by the court. But this is not very educated guess (since I know next to nothing about French law).

I'd doubt that since French law is based on EU regulation, which states a few things that bitcoin is not. On top of that French laws define virtual currencies as a form of debt (so you can cash out anytime from the issuer), which is clearly not what bitcoin is.

[JackH]

I posted it as news post on my site here: www.italkcash.com

Hopefully this story will catch on in the larger media, as this is super good news!

[rouhaud]

i live in france and i not know this problem with bitcoin, can you explain me what is really the problem, because macaraja shop not propose on their website the bitcoin paiement can you send me the link please

[Gabi]

Speaking about wow gold and other mmo things, it's stated that ALL the mmo things are property of the software house. So every wow gold is property of Blizzard, no matter what. Of course if you are playing wow you can use them, but you can't go around and say "i OWN 100 wow gold"

As for bitcoin well we need them to treat it like gold

[MagicalTux]

Speaking about wow gold and other mmo things, it's stated that ALL the mmo things are property of the software house. So every wow gold is property of Blizzard, no matter what. Of course if you are playing wow you can use them, but you can't go around and say "i OWN 100 wow gold"

As for bitcoin well we need them to treat it like gold

You don't own bitcoins. You own keys that allows you to give authorization to other people's key to use some coins. The coins really are in the blockchain, which is everywhere.

[Gabi]

Yes, that's true.

[skilo]

I think if bitcoin is to survive its value needs to be dictated by something other than fiat currency.

Why cant we base its value on the supply of orange juice? or maybe tuna fish?

Anything to keep the gooberment out of it.

[ovidiusoft]

Not mentioning that exchange or online storage of bitcoins would require to be a bank, which involves a lot of fees and time (can take up to 5 years to create one).

Not true. Where I live (Bucharest/Romania) there are dedicated exchange houses which are not banks. You go in, give cash, get cash in another currency. I've seen these in other countries.

These are regulated in the EU, and you need a licence to operate one. Moreover, Romania is a recent addition to the EU, so it is possible that the relevant legislation is just being implemented (accession countries had a grace period to implement legislation).

It's possible, I don't know the legal status of these. But I am pretty sure that they don't need to follow the same rules, don't need to pay the same fees and most definitely will not take years to create one.

The point of my comment was that I don't believe the issue to be as bad as MagicalTux implied. There are solutions to open an exchange other than become a bank. There are also other countries other than France in the SEPA zone. Even Romania, why not?

[nmat]

Not mentioning that exchange or online storage of bitcoins would require to be a bank, which involves a lot of fees and time (can take up to 5 years to create one).

Not true. Where I live (Bucharest/Romania) there are dedicated exchange houses which are not banks. You go in, give cash, get cash in another currency. I've seen these in other countries.

These are regulated in the EU, and you need a licence to operate one. Moreover, Romania is a recent addition to the EU, so it is possible that the relevant legislation is just being implemented (accession countries had a grace period to implement legislation).

It's possible, I don't know the legal status of these. But I am pretty sure that they don't need to follow the same rules, don't need to pay the same fees and most definitely will not take years to create one.

The point of my comment was that I don't believe the issue to be as bad as MagicalTux implied. There are solutions to open an exchange other than become a bank. There are also other countries other than France in the SEPA zone. Even Romania, why not?

There are lots of places like this all over Europe. I have never been outside Europe so I can't speak for other continents, but if you make a eurotrip, these houses sometimes come in handy.

[S3052]

This is interesting and could have a major impact on the future of bitcoins and of course also on bitcoin prices.

Two questions:
1) What is the issue to become an official bank for MtGox? (apart from the costs, which could be covered also by investors) Forget about anonymity for the moment as well.
2) If MtGox dows not (want to) become a bank, we could engage with one existing bank or broker (i.e. CMCmarkets, igmarkets, swissquote, etc) to allow bitcoin trading. If this would be accepted, how difficult would it be to integrate bitcoin into their trading software and systems?

[The_Duke]

Of course it will be judged to be a virtual currency. Because that is what it is. Even "official" bitcoin frontpage says so: "P2P Virtual Currency".

And lets be honest, we've seen this coming all along, right? We've been talking on these forums about the legal status of bitcoin and what it would mean when companies legally wanted to use bitcoin.
The criticasters have always said that it'd be virtually (pun intended) impossible to really work with bitcoins for tax, legal and official stuff.
The counterargument was always that bitcoin can not be regulated and that even if declared illegal it will still continue to exist and flourish. And it might. For drugs, porn, gambling and some niche stuff.
Not for the masses though, but again... we already knew that.

[BitcoinNotify.com]

@MagicalTux: this is a very exciting report! I've just reposted it on the Polish Bitcoin forum. Good luck in the court and please keep us informed.

[The_Duke]

You don't own bitcoins. You own keys that allows you to give authorization to other people's key to use some coins. The coins really are in the blockchain, which is everywhere.

You are mistaking "owning" and "posessing". You don't posess your bitcoins, but you do own them.

And if not, then bitcoin is doomed anyway. It's hard enough to explain all of  this to non-nerds without having to add "but after all of that effort... you don't technically OWN anything though...".

[The_Duke]

You don't own bitcoins. You own keys that allows you to give authorization to other people's key to use some coins. The coins really are in the blockchain, which is everywhere.

You are mistaking "owning" and "posessing". You don't posess your bitcoins, but you do own them.

Are you sure you didn't goof that up? If possession is 9/10ths of the law and someone stealing a copy of your wallet gives them the right to use it without you being able to stop them, I think it is in fact that you possess them but you don't own them.

I'm not  a native english speaker, so I might have swapped them around then... But then see my edit-added comment. If you technically don't even own the bitcoins you went through all that trouble for, then the masses won't want anything to do with it anyway.

But to stick to the wallet example. IRL... if I steal your wallet (not the .dat one, the real one), I technically posess it. It  is in my posession. But I don't legally own it, since it is stolen and you are still the rightful owner.

So with bitcoins, you do not posess them, because they are in the blockchain. But you have the right to do with them what you want,because you own them.

[Big Time Coin]

I don't mean to be rude, but the glowing support in this thread took me by surprise.  It is unwarranted, and Tux deserves a rebuke.  Tux:

First you royally screw up running your site and end the big rally by closing the exchange on which it was occuring while simultaneously leaking the emails and password hashes of practically every bitcoin user onto the public internet.  

Now, in the same quarter(!), you are royally screwing up a bitcoin court case of first impression by discussing the ongoing litigation informally in a public forum.  What law firm or lawyer advised you to come here and tell us all this information?  Isn't it bad enough that all your statements made in the past are going to be a part of the litigation, why oh why can you possibly think it is a good idea to continue making statements during the litigation.  

Instead, you should have started a legal defense fund from the very beginning, sought the help of the EFF (is there a french equivalent or sister organization?), and had some discussion about what firm/lawyer would best represent the interests of the community as a whole.  You probably would have been able to raise quite a bit of money for your case.  You also could benefit greatly from the guidance of older, wiser, more experienced businessmen and lawyers than yourself.  

Do you have any experience in business before running mtgox?  My guess: no!

Is this your first experience with a lawsuit, as a litigant?  My guess: yes!

Why a pseudo-socialist, nanny state, police state, big-government country like France, out of all the EU nations?  My guess: you're french!

Going this alone without seeking input from the bitcoin user base is nothing less than foolish arrogance.  You are not qualified to decide, for all of us, which court is most likely to grant a favorable ruling, and on which issues?  

The whole case seems ridiculous, as well.  You are trying to FORCE a specific bank to hold your money and perform banking functions?  That is completely against the spirit of capitalism and free enterprise.  I can't make any sense of your goal at all.  Besides screwing over bitcoin, presumably inadvertently, what could you possibly hope to accomplish?

[andrewbadr]

I like to criticize from the sidelines. It's so easy!

What have you done to help Bitcoin? What are you building?

There are two kinds of people in this community: those who are doing to the work, and those who spend all their time arguing, speculating, and gossiping.

[andrewbadr]

If someone wants to come along and say they could do better, Tux has to argue why that person should not be given a chance to do so. I don't see anyone stepping up to take responsibility though, just some harmless advice that Tux should take.

I agree with your post overall, but not this part. Tux knows 100x more about his situation than anyone else in this thread, so to think you know better than him is arrogance. Big Time just expressed his less politely than you did ("you suck" vs "advice that Tux should take"). I'm all for making suggestions, but they should be phrased as such, and politely to boot.

[ssaCEO]

Well, this is pretty amazing. It's undoubtedly the first serious attempt by a government to regulate BTC, and as it's France it's going to strongly influence the currents in the EU if not the rest of the world. And of course, there are darker forces behind this attempt to regulate the market.

I don't buy the defense that bitcoin ≠ money, nor do I buy the defense that it's just a protocol. But I do think it's clearly a commodity. If Bitcoin wasn't worth money, there wouldn't be a whole lot of reasons for us to accept it as a gambling payment method, would there? But it's just a commodity -- we take it as barter and convert it in and out of currency. It's not a form of money in and of itself; it's a bridge, an e-currency, a store of value. A commodity holds its value indefinitely against fiat currencies, regulated only by supply and demand; as a limited resource, that's exactly what Bitcoin does. As a commodity, betting on it is just another speculative gamble against floating currencies. Does France stop its investors from buying pork bellies on the CME? Doubt it. What jurisdictional right would they have to do so? Under what law can France stop its citizens from paying a company in another jurisdiction to invest in a commodity on their behalf? Investing in Bitcoin isn't any different from investing in gold or copper or anything else with a limited supply. That's the way to approach it and to fight this thing.

[S3052]

This is interesting and could have a major impact on the future of bitcoins and of course also on bitcoin prices.

Two questions:
1) What is the issue to become an official bank for MtGox? (apart from the costs, which could be covered also by investors) Forget about anonymity for the moment as well.
2) If MtGox dows not (want to) become a bank, we could engage with one existing bank or broker (i.e. CMCmarkets, igmarkets, swissquote, etc) to allow bitcoin trading. If this would be accepted, how difficult would it be to integrate bitcoin into their trading software and systems?

Would anyone care to reply? thanks in advance