P2P currency exchange & Escrow services now illegal !

[Sniper338Lapua]

You read it right, and after consulting my attorney it is fact, on Feb. 4th FinCen the American financial crimes organization issued this statement ( http://www.fincen.gov/news_room/nr/pdf/20140130.pdf)  re-defining, and also instating a new law that makes the person to person sale of bitcoin from one person to another a federal crime, as well as instating laws which make any intermediary between parties ( I.E. Escrow services ) no matter what the terms whether it be for goods, services, or currency exchange, ILLEGAL

In a direct quote from the new law. ( http://www.fincen.gov/news_room/rp/rulings/pdf/FIN-2014-R001.pdf )

"The guidance makes clear that an administrator or exchanger of convertible virtual currencies that (1) accepts and transmits a convertible virtual currency or (2) buys or sells
convertible virtual currency in exchange for currency of legal tender or another convertible virtual currency for any reason (including when intermediating be tween a user and a seller of goods or services the user is purchasing on the user’s behalf) is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person. The guidance also makes clear that “a user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN's regulations.” FinCEN understands your letter to amount to a request to elaborate on this last statement in the specific context of a user that obtains the convertible virtual currency Bitcoin by mining

After consulting with my attorney today, the part i put in bold defines and would be used in a court of law to define acting as an escrow agent as you are sending them money to send to another person on your behalf as a result or to conclude a transaction.

I only share this as my attorney called me very early this morning (on a sunday none the less) to warn me about my bitcoin holdings and transactions as i have consulted with him and even paid him with bitcoin before. He has had 3 clients in the past 48 hours get arrested due to police "stings" from either local bitcoin or craigslist.


So now my question........

Who do we convert bitcoin to cash in a safe manner without using the exchanges that many of us hate for the risk and headache, or using paypal/netteller/other services with your name on it if we want to quietly turn BTC to USD?

[c0dex]

This is bullshit.  It is NOT illegal to trade if you're just trading for yourself.  If you turn that into a business and transact in huge volumes, then you are expected to be registered with FinCen and get the proper licensure for each state.  That's where people get in trouble.

[Dabs]

If you use an exchange, that's the exchange's problem, right?

[Sniper338Lapua]

This is bullshit.  It is NOT illegal to trade if you're just trading for yourself.  If you turn that into a business and transact in huge volumes, then you are expected to be registered with FinCen and get the proper licensure for each state.  That's where people get in trouble.

I may not be a lawyer myself, but i do have one on retainer for my business, and i can assure you that any amount now over $300 usd IS ILLEGAL as he received calls from 3 clients here in Florida this weekend who were taken into custody for selling bitcoin through craigslist or local bitcoin.

Take it with a grain of salt if you want, I LOVE BITCOIN, and will still continue to find ways. But please, at least use a little more caution when making transactions as there are now police operations working towards these stings to nail people selling bitcoin to the wall.

Even someone with a 10th grade education can read that document and tell you what it means, you do not have to have a PhD.

[c0dex]

If you use an exchange, that's the exchange's problem, right?

It is the responsibility of the seller (individual or exchange) to enforce and abide by the laws that govern those actions. I don't think you - a buyer - would be punished for the missteps of the exchange.

[phazon307]

You have two posts dude what are you trying to do scare the price lower so you can buy?? If you was smart which I am seriously doubting you would have sold as many coins as you possibly could and there would be a huge sell right now. Fact is this why would you 1 guy know this before any of the longer seasoned bitcoiners here? Don't you think if what you state is true that there would have been a huge dump on Feb 4?

[c0dex]

This is bullshit.  It is NOT illegal to trade if you're just trading for yourself.  If you turn that into a business and transact in huge volumes, then you are expected to be registered with FinCen and get the proper licensure for each state.  That's where people get in trouble.

I may not be a lawyer myself, but i do have one on retainer for my business, and i can assure you that any amount now over $300 usd IS ILLEGAL as he received calls from 3 clients here in Florida this weekend who were taken into custody for selling bitcoin through craigslist or local bitcoin.

Take it with a grain of salt if you want, I LOVE BITCOIN, and will still continue to find ways. But please, at least use a little more caution when making transactions as there are now police operations working towards these stings to nail people selling bitcoin to the wall.

Even someone with a 10th grade education can read that document and tell you what it means, you do not have to have a PhD.

You are referring to the recent Florida arrests, but the way you start this thread it sounds like you're generalizing for all of bitcoin. You aren't the only one with an attorney on retainer who has their own understanding of the guidance.

[Sniper338Lapua]

You have two posts dude what are you trying to do scare the price lower so you can buy?? If you was smart which I am seriously doubting you would have sold as many coins as you possibly could and there would be a huge sell right now. Fact is this why would you 1 guy know this before any of the longer seasoned bitcoiners here? Don't you think if what you state is true that there would have been a huge dump on Feb 4?

Ummmmm, their was, but not as a result of this, it was as a result of Mt. Gox, which is in part as result of this as they are not registered.

If you use an exchange, that's the exchange's problem, right?

Many exchanges are registered with the US treasury and FinCen, so there are several legal ways to do this if you dont mind having to give out every last bit of your personal info. Not all exchanges though, Mt. Gox for example although the first, and the largest, IS NOT registered.

As for who's problem it is, like i said, i am not a lawyer, i just pay one for advice. I would say for now, stick to the exchanges which are registered if you must use exchanges. I am not qualified to give legal advice, so i would advise if you have larger volumes of BTC that you consult your own lawyer to be safe. After 20 minutes on google i found out that the USPS (Post office) has applied for a MSB license and plans on offering bitcoin exchange service as a way to bail themselves out of the serious financial problem they are having. Lets hope that comes through

[Sniper338Lapua]

This is bullshit.  It is NOT illegal to trade if you're just trading for yourself.  If you turn that into a business and transact in huge volumes, then you are expected to be registered with FinCen and get the proper licensure for each state.  That's where people get in trouble.

I may not be a lawyer myself, but i do have one on retainer for my business, and i can assure you that any amount now over $300 usd IS ILLEGAL as he received calls from 3 clients here in Florida this weekend who were taken into custody for selling bitcoin through craigslist or local bitcoin.

Take it with a grain of salt if you want, I LOVE BITCOIN, and will still continue to find ways. But please, at least use a little more caution when making transactions as there are now police operations working towards these stings to nail people selling bitcoin to the wall.

Even someone with a 10th grade education can read that document and tell you what it means, you do not have to have a PhD.

You are referring to the recent Florida arrests, but the way you start this thread it sounds like you're generalizing for all of bitcoin. You aren't the only one with an attorney on retainer who has their own understanding of the guidance.

No, sorry c0dex, i guess i should have been more specific. Those guys in the news had it coming, what i was refering to is that they have made at least 3 more arrests since then that i know about, and my lawyer was just giving me a courtesy call because he knew i used local bitcoin in the past. I am not sure if it is national yet, but i know the entire state of Florida is cracking down. The way the law is written though, it is left intentionally vague so they can prosecute in most any transaction situation involving exchange of funds.

- To the guy accusing me of trying to drive down the price of bitcoin. Are you insane? For any one person to think that they could make a post on the worst bitcoin forum on the web in some far off corner of the internet and use it to drop the price of bitcoin by even .00000000000000000000000000000000001 penny is absurd. So either your trolling, or just plane insane.

[c0dex]

This is bullshit.  It is NOT illegal to trade if you're just trading for yourself.  If you turn that into a business and transact in huge volumes, then you are expected to be registered with FinCen and get the proper licensure for each state.  That's where people get in trouble.

I may not be a lawyer myself, but i do have one on retainer for my business, and i can assure you that any amount now over $300 usd IS ILLEGAL as he received calls from 3 clients here in Florida this weekend who were taken into custody for selling bitcoin through craigslist or local bitcoin.

Take it with a grain of salt if you want, I LOVE BITCOIN, and will still continue to find ways. But please, at least use a little more caution when making transactions as there are now police operations working towards these stings to nail people selling bitcoin to the wall.

Even someone with a 10th grade education can read that document and tell you what it means, you do not have to have a PhD.

You are referring to the recent Florida arrests, but the way you start this thread it sounds like you're generalizing for all of bitcoin. You aren't the only one with an attorney on retainer who has their own understanding of the guidance.

No, sorry c0dex, i guess i should have been more specific. Those guys in the news had it coming, what i was refering to is that they have made at least 3 more arrests since then that i know about, and my lawyer was just giving me a courtesy call because he knew i used local bitcoin in the past. I am not sure if it is national yet, but i know the entire state of Florida is cracking down. The way the law is written though, it is left intentionally vague so they can prosecute in most any transaction situation involving exchange of funds.

- To the guy accusing me of trying to drive down the price of bitcoin. Are you insane? For any one person to think that they could make a post on the worst bitcoin forum on the web in some far off corner of the internet and use it to drop the price of bitcoin by even .00000000000000000000000000000000001 penny is absurd. So either your trolling, or just plane insane.

That makes more sense. I was afraid you were suggesting bitcoin had become outright illegal a few days back!

I stopped selling bitcoin many months back because my attorney attended the bitcoin conference last May and got the sense that continuing to operate might be too risky. But if the exchange can afford all the proper licenses and truly do abide by the KYC/AML program they put in place, they might survive ..... might.

[Sniper338Lapua]

I think once the post office becomes an exchange the price will become more stable, but the laws will also become more restrictive to entice more people to just use the post office. Just my 2 satoshis worth.

Until then, i guess i am just going to mine, and sit on it.

[Rassah]

So, p2p trades over $300 will get you nabbed? Can anyone else confirm this?

[Sniper338Lapua]

So, p2p trades over $300 will get you nabbed? Can anyone else confirm this?

Again, sorry, you guys are such literal people around here. There is no guarantee that a transaction over $300 will get you nailed. There is just a possibility that it could. I travel a ton for work, and there are still tons of towns and places that have no idea what bitcoin even is, so no need to panic, unless you live in florida and are selling bitcoin on craigslist or local bitcoin. In which case STOP for now.

Who knows how the new laws will turn out moving forward, but the language is there to make it so that IF an authority WANTS to be a pain in your ass and charge you, THEY CAN. Of course it is illegal to feed a squirrel in a public park in Texas on a sunday and has been since the late 1950's. When do you think the last time someone was arrested for it was?

[Rassah]

The following:

In undertaking such a conversion transaction, the user is not acting as an exchanger, notwithstanding the fact that the user is accepting a real currency or another convertible virtual currency and transmitting Bitcoin, so long as the user is undertaking the transaction solely for the user’s own purposes and not as a business service performed for the benefit of another. A user’s conversion of Bitcoin into a real currency or another convertible virtual currency, therefore, does not in and of itself make the user a money transmitter.

seems to make trading through LocalBitcoins OK, as long as you don't claim to make a business out of it.

[Lethn]

I was thinking that the reaction from the U.S Senate and Ben Bernanke was too positive, interesting

[barfor]

Florida state law is different than US law and much of what you are discussing is Florida law. Fincen is the US agency, not related to Florida.

"The first ruling states that, to the extent a user creates or “mines” a convertible virtual currency solely for a user’s own purposes, the user is not a money transmitter under the BSA. The second states that a company purchasing and selling convertible virtual currency as an investment exclusively for the company’s benefit is not a money transmitter,” the release states."
- http://www.coindesk.com/fincen-bitcoin-miners-investors-money-transmitters

"The second ruling enabled companies to buy virtual currencies for themselves, selling them on an exchange later for their own purposes."
- http://www.coindesk.com/congressional-leaders-foundation-praise-fincen-guidance

 ie NOT illegal in US. But again Florida is operating under their own more restrictive MSB rules.

[russokai]

Yes early last year, they made it illegal to sell more than $1000 BTC per day...FinCen did this.  Apparently the # is $300 in Florida.

Don't take my word for it or the others in the thread who are clueless and will say I'm incorrect... Google it yourself.

It sounds like they may have made it even more restrictive lately.

[Spendulus]

The following:

In undertaking such a conversion transaction, the user is not acting as an exchanger, notwithstanding the fact that the user is accepting a real currency or another convertible virtual currency and transmitting Bitcoin, so long as the user is undertaking the transaction solely for the user’s own purposes and not as a business service performed for the benefit of another. A user’s conversion of Bitcoin into a real currency or another convertible virtual currency, therefore, does not in and of itself make the user a money transmitter.

seems to make trading through LocalBitcoins OK, as long as you don't claim to make a business out of it.

It does sort of that.

The phrase "as a business service performed for the benefit of another" should be read exactly as worded.  Defines brokerage and agent relationships.
Those are not allowed, except for the money dealers.  

However, if they were your own bitcoins and cash, neither buying or selling would be disallowed.

An interesting question would be whether an in between agent who "matched buyers and sellers" without comingling funds would be considered a money dealer.

Example:

You have 2.87 btc to sell in USD in state TX?
Anyone want to buy 2.87 btc in USD in state TX?
No, not 2.22.  2.87 exactly, and only USD, and only TX?

[phazon307]

This is bullshit.  It is NOT illegal to trade if you're just trading for yourself.  If you turn that into a business and transact in huge volumes, then you are expected to be registered with FinCen and get the proper licensure for each state.  That's where people get in trouble.

I may not be a lawyer myself, but i do have one on retainer for my business, and i can assure you that any amount now over $300 usd IS ILLEGAL as he received calls from 3 clients here in Florida this weekend who were taken into custody for selling bitcoin through craigslist or local bitcoin.

Take it with a grain of salt if you want, I LOVE BITCOIN, and will still continue to find ways. But please, at least use a little more caution when making transactions as there are now police operations working towards these stings to nail people selling bitcoin to the wall.

Even someone with a 10th grade education can read that document and tell you what it means, you do not have to have a PhD.

You are referring to the recent Florida arrests, but the way you start this thread it sounds like you're generalizing for all of bitcoin. You aren't the only one with an attorney on retainer who has their own understanding of the guidance.

No, sorry c0dex, i guess i should have been more specific. Those guys in the news had it coming, what i was refering to is that they have made at least 3 more arrests since then that i know about, and my lawyer was just giving me a courtesy call because he knew i used local bitcoin in the past. I am not sure if it is national yet, but i know the entire state of Florida is cracking down. The way the law is written though, it is left intentionally vague so they can prosecute in most any transaction situation involving exchange of funds.

- To the guy accusing me of trying to drive down the price of bitcoin. Are you insane? For any one person to think that they could make a post on the worst bitcoin forum on the web in some far off corner of the internet and use it to drop the price of bitcoin by even .00000000000000000000000000000000001 penny is absurd. So either your trolling, or just plane insane.

Just listen to yourself you sound like a scared little girl for something that has nothing to be afraid of either your retarded our your attorney is retarded.

[pungopete468]

Come on...

It's not illegal to sell Bitcoin for yourself; you can sell $9,999 worth of BTC at any given time as long as they are yours and for your benefit only. No "straw man" exchanges where somebody sells Bitcoin "for a friend."

You can sell more than $9,999 worth of BTC as long as you don't carry more than $10,000 USD in cash on your person at any given time.

The law doesn't distinguish between virtual currencies and DVD players; it includes virtual currencies in the legal definition so that they will be covered under the same law that other valuables are.

Basically, if what you claim is true then it's illegal to sell anything over $300.

As the law is written: you can't sell anything worth more than $300 for anybody other than yourself under Florida law...