UK bitcoin users/ business owners - Please read this

[James-Cryptonomics]

HI,

I appreciate you're looking for practical solutions.

Let me make a few points though:

(1) All UK banks are extensions of the government, even if they are not directly owned by the government. AT some point then, even if not immediately, they will have to accept the government's line on bitcoin.

(2) For this reason, I think your best approach is to start at the government level not the bank level

(3) I would follow up by suggesting you meet the bitcoin group of supporters, based in London. There is a meetup group called Bitcoin London, I would suggest maybe talking to them in order to organize a collective effort.

(4) Finally - I would say that it will require huge action to get a UK bank to operate with a bitcoin exchange . Why ? Because it needs change at the government level, and that is not forthcoming right now.

Im not saying its impossible, but it is going to be quite a task.

Honestly, if I ws you ? Just buy bitcoin and hold.  The time will come when the government is forced to take bitcoin seriously. Until then, it will continue to be hard to operate a bitcoin-related venture in the UK.


PS. in the interm, I appreciate that means it's perhaps more difficult than it needs to be to acquire bitcoins. However, at least you can (still) buy them.

Hi Xavier,

Thanks for taking the time out to give me your thoughts. This is exactly what I need.

You are totally right and I do primarily want to target the government level as opposed to the banking level. Subsequently I will expend more energy at this level then the banking level. It would however be interesting to see what response the banks give - you never know they may be insightful or even offer a hand (no chance ).

Your suggestion in number 3 is a great place to start and I will act upon this over the weekend. I appreciate the enormity of the task but I feel that we as a community should be doing more to challenge the power structure over these issues. The UK has been exceptionally slow in adapting bitcoin - I can't recall any politician even discussing it (though i may be wrong).

Hah - Yeah, maybe. Its just that I have always liked doing business and have never been much of an investor - though this is slowly changing.

Again, many thanks

James

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[James-Cryptonomics]

Take it offshore, and do yourself a favour!

With all due respect its doing no one a favour. We can't just ignore these issues, we have to at least try.

Much respect,

James

[grifferz]

(4) Finally - I would say that it will require huge action to get a UK bank to operate with a bitcoin exchange . Why ? Because it needs change at the government level, and that is not forthcoming right now.

I don't disagree with your points, including this one, but can I ask:

What is it that you feel is different about UK government-bank relationship that isn't the same for, say, Germany and Fidor bank?

[grifferz]

Your suggestion in number 3 is a great place to start and I will act upon this over the weekend. I appreciate the enormity of the task but I feel that we as a community should be doing more to challenge the power structure over these issues. The UK has been exceptionally slow in adapting bitcoin - I can't recall any politician even discussing it (though i may be wrong).

Are you based in/near London?

I am and I would be interested in taking part in what you're proposing, so if you are doing something near London please do announce it on these boards.

Myself I have a tiny business (nothing compared to the turnovers you mentioned earlier) that does accept bitcoin payments, but doesn't sell anything related to bitcoin so I haven't run into those issues. I do buy and sell bitcoins personally and have had a number of negative experiences with banks. I also have seen this a lot on these boards. I'm interested in the adoption of bitcoin the UK and feel it is a shame the way things are, would be interested in doing something about it.

[corebob]

People will have to vote with their feet when it comes to this one. Its the only thing that really works.
Take it as a vacation

[James-Cryptonomics]

Are you based in/near London?

I am and I would be interested in taking part in what you're proposing, so if you are doing something near London please do announce it on these boards.

Myself I have a tiny business (nothing compared to the turnovers you mentioned earlier) that does accept bitcoin payments, but doesn't sell anything related to bitcoin so I haven't run into those issues. I do buy and sell bitcoins personally and have had a number of negative experiences with banks. I also have seen this a lot on these boards. I'm interested in the adoption of bitcoin the UK and feel it is a shame the way things are, would be interested in doing something about it.

Hi Griffers,

Firstly apologies for the lateness in reply - it's my birthday (hint, hint) so been a little sidetracked .

I am not actually based in London - I live in Liverpool but am from around Bristol (still spend a lot of time down there). I will email the relevant people tomorrow and will keep everybody posted on what has been said. If all goes well I am sure this will involve something going on in London as its the most logical place to begin.

I can't thank you enough for showing your support - we can do this

James

P.s. Again - I WILL keep you posted

[James-Cryptonomics]

People will have to vote with their feet when it comes to this one. Its the only thing that really works.
Take it as a vacation

I am probably being dumb here, but I am failing to understand. Can you enlighten me please ?

[franky1]

reading the posts i have some advice.

banks dont talk to MP's, lords or the prime minister.. well not as much as HMRC PRA. so i think you would get more results from HMRC PRA. also get paperwork from HMRC/PRA that categorically says bitcoins are not illegal. dont just go to a bank manager meeting and allow them to say no, ask why. then ask what is required to get approval. show initiative professionalism which of course will show that you want your business to succeed.

as for getting licences to help persuade a bank, one method that may work for you all is to group together and form a co-operative/consortium and have that as the money licence entity. then have your individual businesses/projects as subsidiaries of that main entity.

... well even setting it up as a franchise model could work too....

make it into a bitcoin UK (i wont say foundation although thats the aim) consortium

this would reduce individuals cost of being legal and also show that the projects have a chain of command. rather then looking like a basement dwellers hobby.

i spoke to my bank manager again and he said that they are not oppose to bitcoin, but they are oppose to high risk, and lots of admin.

the easiest way to implement risk reduction would be for you to take peoples driving licence or other government id (passport) at registration. and when doing a transaction ask the customer to take a webcam photo of their face and holding a piece of paper up with their username and a random jumble of characters that represents that transaction request,  with the QR code of their receiving bitcoin address. then customers cannot claim they were hacked and someone else done the transaction. and the qr code can be used in relation to the blockchain to prove the transaction occured.
EG: (excuse the babyish 1 minute image production quality)


any dodgy customers that want to hide away, you dont want to be trading with anyway. so the customers that are legitimate would follow the requirements because thats the legal requirements of FIAT.

the other stuff is to also compare the ID details (name) to their bank account details. (there is alot more stuff to do, but this is just some examples)

all of this is also to show proof of authenticity, if (lets say a chargeback scammer) someone tried to reverse a wire transmission. having stuff in your terms and conditions and ensuring the banks that you will validate EVERY customer that way, will reduce their need to investigate transactions as much. and if a investigation does happen, you can quash the customers allegations easily, which banks love (less work for them). the idea above also works for paypal. they have actually refused a chargeback due to some people showing enough proof of a bitcoin transaction. (even i was surprised)

the problem i see many times is that people wanting business accounts, do not want to do KYC. and that is the issue. even if you stick below the EU wire transmission limits to not need a licence. still do KYC.

if you dont want to do KYC then you dont want to handle the bankers patented product (FIAT). remember FIAT is not your property. its just an IOU of something that the banks OWN. you simply have to follow the financial rules if you want to handle their product.

which is why we love bitcoin,.. the day when we can buy groceries and pay our rent without the headache of banking will be the best day ever.

[ashleyconnor]

the problem i see many times is that people wanting business accounts, do not want to do KYC. and that is the issue. even if you stick below the EU wire transmission limits to not need a licence. still do KYC.

if you dont want to do KYC then you dont want to handle the bankers patented product (FIAT). remember FIAT is not your property. its just an IOU of something that the banks OWN. you simply have to follow the financial rules if you want to handle their product.

which is why we love bitcoin,.. the day when we can buy groceries and pay our rent without the headache of banking will be the best day ever.

It's not always about KYC.

London Gold Exchange had some of the strictest KYC requirements and they still had their UK banks closed.

Other than that your webcam idea is too much friction. Customers will just go elsewhere.

[corebob]

People will have to vote with their feet when it comes to this one. Its the only thing that really works.
Take it as a vacation

I am probably being dumb here, but I am failing to understand. Can you enlighten me please ?

I mean moving the business to a more bitcoin friendly country.

Its not the ideal solution of course, but if some governments fail to strike the right regulatory balance, that could be the only alternative

[DoctorOz]

People will have to vote with their feet when it comes to this one. Its the only thing that really works.
Take it as a vacation

I am probably being dumb here, but I am failing to understand. Can you enlighten me please ?

I mean moving the business to a more bitcoin friendly country.

Its not the ideal solution of course, but if some governments fail to strike the right regulatory balance, that could be the only alternative

Exactly.... if BTC is a global business, the global solutions are also of much warrant.  I understand the emotional need to be a local patriot.  However, business functions on rationality.  I'm sure that the UK banking and Govt sector would react quicker if they would see the 'potential' being exploited by other more 'open' governments and institutions.  I mean, for instance, NIKE had no issue with shifting their manufacturing to South East Asia, as they firmly believed that it was good for business.  Not sure if they were to worried about 'local patriotism'?

Lets be fair, if Bitstamp was formed in the US and not Slovenia, would they have achieved their success??

I'm sure Malta would be very interested in you :-)

[franky1]

Other than that your webcam idea is too much friction. Customers will just go elsewhere.

again.. people not wanting to do KYC !!!!

as for going elsewhere. tell me what "elsewhere" services allow UK bank Faster payment..

by being legal in the UK you have to do KYC. if you want to run a business in a different country/avoiding KYC, then your dodging FIAT laws, avoiding bringing new enterprise to UK and also adding extra costs to the customer (fiat exchange rates, delays)

this thread is about UK business owners wanting UK infrustructure. not passports to move to malta

[ashleyconnor]

Other than that your webcam idea is too much friction. Customers will just go elsewhere.

again.. people not wanting to do KYC !!!!

as for going elsewhere. tell me what "elsewhere" services allow UK bank Faster payment..

by being legal in the UK you have to do KYC. if you want to run a business in a different country/avoiding KYC, then your dodging FIAT laws, avoiding bringing new enterprise to UK and also adding extra costs to the customer (fiat exchange rates, delays)

this thread is about UK business owners wanting UK infrustructure. not passports to move to malta

There's no doubt you have to do KYC but getting on a webcam everytime you want to login or move money is a massive amount of friction to customers. Bitcoin's main demographic is males 18-25 who distrust government and value their privacy. I doubt they'd use your 1984 exchange.

Scanning your passport and uploading it to somebody who could be storing it insecurely is bad enough.

I don't know where your passports and Malta comment came from...

[studio1one]

When we change our coin to fiat we often do it on Local Bitcoin.

We ensure every buyer name on local bitcoin matches bank account name and require government ID for new buyers. All of this is kept stored for reference if any problems later arise.

We feel this is enough to remain compliant and legal.

[franky1]

Other than that your webcam idea is too much friction. Customers will just go elsewhere.

again.. people not wanting to do KYC !!!!

as for going elsewhere. tell me what "elsewhere" services allow UK bank Faster payment..

by being legal in the UK you have to do KYC. if you want to run a business in a different country/avoiding KYC, then your dodging FIAT laws, avoiding bringing new enterprise to UK and also adding extra costs to the customer (fiat exchange rates, delays)

this thread is about UK business owners wanting UK infrustructure. not passports to move to malta

There's no doubt you have to do KYC but getting on a webcam everytime you want to login or move money is a massive amount of friction to customers. Bitcoin's main demographic is males 18-25 who distrust government and value their privacy. I doubt they'd use your 1984 exchange.

Scanning your passport and uploading it to somebody who could be storing it insecurely is bad enough.

I don't know where your passports and Malta comment came from...

thank you for showing proof of why banks wont trust you (the people with bitcoin ideologies (not making personal attacks)).
you think you can ignore the FIAT laws because its in the best interest of bitcoin users. this is why you should not be dealing with fiat on a large scale. if you dont like fiat laws then set up a altcoin exchange that does not trade in fiat. purely altcoin to alt coin.

if you want to trade in fiat then follow the fiat laws. its just that simple.

my passport for malta comment was about instead of trading in the UK some people advise to go offshore which again avoids the UK laws.

and studio1one:
what you "feel is enough to remain compliant" has nothing to do with what the regulations REQUIRE you to remain compliant.

guys please do not ignore the regulations of fiat based on personal feelings. the law is the law. until we change the law we have to obide by it. so either change the law of follow it. dont ignore it or you will never get banks trust.

(i personally have the same ideologies as you. but personal and business should not mix when it comes to the law)

[ashleyconnor]

thank you for showing proof of why banks wont trust you (the people with bitcoin ideologies (not making personal attacks)).
you think you can ignore the FIAT laws because its in the best interest of bitcoin users. this is why you should not be dealing with fiat on a large scale. if you dont like fiat laws then set up a altcoin exchange that does not trade in fiat. purely altcoin to alt coin.

if you want to trade in fiat then follow the fiat laws. its just that simple.

Again I'm not sure why this is directed at me when I've stated several times that Bitcoin exchanges should be following KYC and taking IDs from all clients including those that don't touch fiat (altcoin <-> altcoin).

Legally you may very well be able to do altcoin <-> altcoin exchanges and require no ID but I'd take it pre-emptively in-case money laundering is occurring.

Once an account is verified then there's no need to re-verify a client from a KYC perspective. That's just unnecessary friction.

[CryptoScotland]

Im with Lloyds and Yorkshire bank, just dont mention the B word and youre ok. they'll come round eventually when they can see theres money to be made, it only takes one major retailer to start accepting BTC in the UK and bingo, bet they wont close Tescos bank account.



 

Can I ask have Yorkshire Bank not caused issues as they are part of Clydesdale and I have some business accounts with them already so hence wanted to check with them if there open to Bitcoin

[CryptoScotland]

When we change our coin to fiat we often do it on Local Bitcoin.

We ensure every buyer name on local bitcoin matches bank account name and require government ID for new buyers. All of this is kept stored for reference if any problems later arise.

We feel this is enough to remain compliant and legal.

Hi,

Who are you banking with for trading on localbitcoin may I ask?