Summary - It seems that the ruling by FINCEN on 1/30/2014 allows for buying and selling bitcoins for one's own investment purposes (without being classified as an MSB) as long as you are not providing brokerage type services for the benefit of others (see the text in green & red below).
However the last section (colored in brown text) seems to imply that there is some consideration given to the volume of sales in determining if one's activities are for investment or are "conducting a business), which would require licensing as an MSB.
Anyone have thoughts on the impact of this ruling for individuals/companies buying & selling bitcoin, using sites like localbitcoins.com, or these forums for that matter, whether done locally or online? Of course this applies to doing business in the US only.
Here is the pertinent language from the ruling:To the extent that the Company purchases and sells convertible virtual currency,
paying and receiving the equivalent value in currency of legal tender to and from
counterparties, all exclusively as investments for its own account, it is not engaged in the
business of exchanging convertible virtual currency for currency of legal tender for other
persons. In effect, when the Company invests in a convertible virtual currency for its own
account, and when it realizes the value of its investment, it is acting as a user of that
convertible virtual currency within the meaning of the guidance. As a result, to the extent
that the Company limits its activities strictly to investing in virtual currency for its own
account, it is not acting as a money transmitter and is not an MSB under FinCEN’s
regulations. However, any transfers to third parties at the behest of the Company’s
counterparties, creditors, or owners entitled to direct payments should be closely scrutinized,
as they may constitute money transmission. (See footnote 10 to this ruling.)
If the Company were to provide services to others (including investment-related or
brokerage services) that involved the accepting and transmitting of convertible virtual
currency, or the exchange of convertible virtual currency for currency of legal tender or
another convertible virtual currency, of course, additional analysis would be necessary to
determine the Company’s regulatory status and obligations with respect to such activity.Footnote 10
In addition, should the Company begin to engage as a business in the exchange of virtual
currency against currency of legal tender (or even against other convertible virtual currency),
the Company would become a money transmitter under FinCEN’s regulations. Under such
circumstances, the Company would have to register with FinCEN, implement an effective,
risk-based anti-money laundering program, and comply with the recordkeeping, reporting,
and transaction monitoring requirements applicable to money transmitters.
Here is a link to the ruling: http://www.fincen.gov/news_room/rp/rulings/pdf/FIN-2014-R002.pdf
