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

[finway]

France wasn't the first. Holding depo's was already in 'the books'.

The first decision from a Central Bank was made a few weeks ago. Everyone will find out in a public release within 3 to 5 weeks.

Its positive.

One country in Europe has 'classified' Bitcoin. Other countries will follow, albiet slowly.

Blah!

Oh my ,  Central Bank's first decision on Bitcoin, must be BIG deal.

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[HorseRider]

How did other people live in Europe deal virtual goods with each other?
The USD on mtgox account can be traded like a virtual goods.

1. Someone who is legally independent from Mtgox sets up an offshore company on the BVI.
2. This BVI company sells the goods named "Mtgox redeemable code"
3. People in Europe buy this redeemable code from the company.
4. If people want to get the money back from Mtgox, just applying a "return" for the virtual goods.

[bitcoinminer]

How did other people live in Europe deal virtual goods with each other?
The USD on mtgox account can be traded like a virtual goods.

1. Someone who is legally independent from Mtgox sets up an offshore company on the BVI.
2. This BVI company sells the goods named "Mtgox redeemable code"
3. People in Europe buy this redeemable code from the company.
4. If people want to get the money back from Mtgox, just applying a "return" for the virtual goods.

You know, money laundering silly!

[txcoin]

@tetra4c

Well, I know a Central Bank that made a decision on classifying Bitcoin two months ago. And I share the impression that other countries will slowly follow that. After being unhappy about that decision in the beginning I am now seeing it as "positive" for the Bitcoin community in the medium to long run.

From the grounds in the statement I conclude that the intention is protecting the persons investing money in Bitcoin from too naive exchange or wallet operators (which I agree is good for the evolution of Bitcoin in the long run). But along with that classification come a lot of requirements on possible exchange / wallet operators. (I am only talking about requirements that come on top of the PSD requirements you would already have from the money transfer business.) With a reasonable lawyer or reasonable skills it is at least possible to circumvent the banking requirement (and thus it is no "game over" decision) but it is nonetheless a hefty pile of additional requirements...

That decision should become public any day now.


Cheers
txcoin

[nmat]

Those are good news txcoin and tetra4c. It's nice to see new laws being created to classify Bitcoin. Keep us posted on the updates.

[netrin]

I wondering if a depreciating bitcoin makes it less threatening and more likely to receive a favorable legal status.

[wareen]

Well, I know a Central Bank that made a decision on classifying Bitcoin two months ago.

Maybe I'm just too naive, but since when is it for a bank to make such a decision? Last time I checked banks were not the ones to make new laws (at least not officially )

I was under the impression that Bitcoin is not covered by existing legislation (at least not those by the EU specifically crafted for digital currencies). Therefore I had expected that new laws would have to be worked out and that at least some democratic process is involved with that.

I'd be glad if somebody could shed some more light into this issue...

[nmat]

Maybe I'm just too naive, but since when is it for a bank to make such a decision? Last time I checked banks were not the ones to make new laws (at least not officially )

I was under the impression that Bitcoin is not covered by existing legislation (at least not those by the EU specifically crafted for digital currencies). Therefore I had expected that new laws would have to be worked out and that at least some democratic process is involved with that.

I'd be glad if somebody could shed some more light into this issue...

I just realized that I skipped over the "bank" word. I agree with you, their posts do not make much sense.

[molecular]

Well, I know a Central Bank that made a decision on classifying Bitcoin two months ago.

Maybe I'm just too naive, but since when is it for a bank to make such a decision? Last time I checked banks were not the ones to make new laws (at least not officially )

I was under the impression that Bitcoin is not covered by existing legislation (at least not those by the EU specifically crafted for digital currencies). Therefore I had expected that new laws would have to be worked out and that at least some democratic process is involved with that.

I'd be glad if somebody could shed some more light into this issue...

I asked this question here before. Here's a candidate for an answer:

The Banque de France is the regulator - it's decision effectively legally defines MtGox as a money transfer business and prohibits it from operating without a licence.

So it seems that formally the Banque de France acted in its capacity as a regulator (not law-maker). It's effectively prohibiting mtgox from operating due to the existing law that disallows money transfer businesses to operator without a license by classifying mtgox as a money transfer business. Right?

[wareen]

The Banque de France is the regulator - it's decision effectively legally defines MtGox as a money transfer business and prohibits it from operating without a licence.

So it seems that formally the Banque de France acted in its capacity as a regulator (not law-maker). It's effectively prohibiting mtgox from operating due to the existing law that disallows money transfer businesses to operator without a license by classifying mtgox as a money transfer business. Right?

Thanks for the info - should have read further back.

So they can only do this if they are somewhat certain that Bitcoin was in fact covered by existing legislation. I could imagine there's a good chance of successfully disputing this interpretation of the laws, considering the unique nature of Bitcoin.

Guess we'll have to wait and see... any day now...

[bitcoinminer]

GOXXXED!!!

[repentance]

Are MtGox appealing this?  I got the impression that they weren't after the ruling came down.

[adamstgBit]

The Banque de France is the regulator - it's decision effectively legally defines MtGox as a money transfer business and prohibits it from operating without a licence.

So it seems that formally the Banque de France acted in its capacity as a regulator (not law-maker). It's effectively prohibiting mtgox from operating due to the existing law that disallows money transfer businesses to operator without a license by classifying mtgox as a money transfer business. Right?

Thanks for the info - should have read further back.

So they can only do this if they are somewhat certain that Bitcoin was in fact covered by existing legislation. I could imagine there's a good chance of successfully disputing this interpretation of the laws, considering the unique nature of Bitcoin.

Guess we'll have to wait and see... any day now...

we can't simply say "the unique nature of Bitcoin, GIVES us the right to do what ever the fuck we want" ... that's just not cool

we have to work with them, to define bitcoin in the law book.

[repentance]

The Banque de France is the regulator - it's decision effectively legally defines MtGox as a money transfer business and prohibits it from operating without a licence.

So it seems that formally the Banque de France acted in its capacity as a regulator (not law-maker). It's effectively prohibiting mtgox from operating due to the existing law that disallows money transfer businesses to operator without a license by classifying mtgox as a money transfer business. Right?

Thanks for the info - should have read further back.

So they can only do this if they are somewhat certain that Bitcoin was in fact covered by existing legislation. I could imagine there's a good chance of successfully disputing this interpretation of the laws, considering the unique nature of Bitcoin.

Guess we'll have to wait and see... any day now...

The nature of Bitcoin had nothing to do with the decision.  They found that MtGox was effectively operating as a money transfer business/bank by taking and holding user deposits of actual currency and that because they weren't licensed to do that they were operating outside the law.  The issue being determined was whether they had a right to a French bank account.  The ruling pretty much meant that because they weren't appropriately licensed for the services they were providing, the bank didn't have to provide them with services (and neither did any other French bank).

[hugolp]

Well, I know a Central Bank that made a decision on classifying Bitcoin two months ago.

Maybe I'm just too naive, but since when is it for a bank to make such a decision? Last time I checked banks were not the ones to make new laws (at least not officially )

I was under the impression that Bitcoin is not covered by existing legislation (at least not those by the EU specifically crafted for digital currencies). Therefore I had expected that new laws would have to be worked out and that at least some democratic process is involved with that.

I'd be glad if somebody could shed some more light into this issue...

Thats a little secret of democracy, it should be called burocracy in reality.

[wareen]

So they can only do this if they are somewhat certain that Bitcoin was in fact covered by existing legislation. I could imagine there's a good chance of successfully disputing this interpretation of the laws, considering the unique nature of Bitcoin.

we can't simply say "the unique nature of Bitcoin, GIVES us the right to do what ever the fuck we want" ... that's just not cool

Oh I'm sorry if I gave you the impression that is what I meant - I'm absolutely for solid legal foundations for electronic cryptocurrencies! I just don't think Bitcoin is covered by current laws hence I would think any decision by a bank trying to classify it would be disputable under current legislation.

Ideally I would like to see new laws being crafted for cryptocurrencies after undergoing a public debate and normal democratic processes. Wishful thinking I guess...

we have to work with them, to define bitcoin in the law book.

Exactly!

The nature of Bitcoin had nothing to do with the decision.  They found that MtGox was effectively operating as a money transfer business/bank by taking and holding user deposits of actual currency and that because they weren't licensed to do that they were operating outside the law.  The issue being determined was whether they had a right to a French bank account.  The ruling pretty much meant that because they weren't appropriately licensed for the services they were providing, the bank didn't have to provide them with services (and neither did any other French bank).

I thought that the nature of Bitcoin was indeed the issue here that had to be decided - if I may quote from Mark's OP:

Chances are it'll take a few weeks/months before a final decision is taken, however starting September 13th, a French court will review the question "Is bitcoin a virtual currency".

Are you talking about a different case or am I missing something?

[repentance]

So they can only do this if they are somewhat certain that Bitcoin was in fact covered by existing legislation. I could imagine there's a good chance of successfully disputing this interpretation of the laws, considering the unique nature of Bitcoin.

we can't simply say "the unique nature of Bitcoin, GIVES us the right to do what ever the fuck we want" ... that's just not cool

Oh I'm sorry if I gave you the impression that is what I meant - I'm absolutely for solid legal foundations for electronic cryptocurrencies! I just don't think Bitcoin is covered by current laws hence I would think any decision by a bank trying to classify it would be disputable under current legislation.

Ideally I would like to see new laws being crafted for cryptocurrencies after undergoing a public debate and normal democratic processes. Wishful thinking I guess...

we have to work with them, to define bitcoin in the law book.

Exactly!

The nature of Bitcoin had nothing to do with the decision.  They found that MtGox was effectively operating as a money transfer business/bank by taking and holding user deposits of actual currency and that because they weren't licensed to do that they were operating outside the law.  The issue being determined was whether they had a right to a French bank account.  The ruling pretty much meant that because they weren't appropriately licensed for the services they were providing, the bank didn't have to provide them with services (and neither did any other French bank).

I thought that the nature of Bitcoin was indeed the issue here that had to be decided - if I may quote from Mark's OP:

Chances are it'll take a few weeks/months before a final decision is taken, however starting September 13th, a French court will review the question "Is bitcoin a virtual currency".

Are you talking about a different case or am I missing something?

As far as I understand it, it's the same case.  MtGox wanted the nature of Bitcoin to be an issue in the determination but it wasn't the grounds on which the ruling was made.  I don't know whether it was determined to be an irrelevant issue to the proceedings or whether it's yet to be decided but Mark's updates haven't indicated that there are any novel issues awaiting determination.

[bitcoinminer]

So how many peoples money did they lose with this latest debacle?

[sadpandatech]

So how many peoples money did they lose with this latest debacle?

$0  I would assume, they are paying legal fees out of their own pockets. And unless i missed soemthing there has been no mention of them not making funds available to any customers who could have potentially been affected by bank closures....??

[repentance]

So how many peoples money did they lose with this latest debacle?

There's no reason why any funds would have been lost even if accessing them was difficult while the matter was being determined.  If I recall correctly, at the emergency hearing the bank was ordered to pay a per day fee to MtGox until the matter was resolved.