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May 16, 2014, 03:04:31 PM |
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I just want to be sure before I sign up for Cryptsy or another American Exchange to trade Bitcoins for alt coins.
I understand that capitol gains appllies for every trade transaction from fiat to bitcoin, from bitcoin to fiat, or from Bitcoin to alt coin etc.
Also, do I need to own a LLC to be considered a speculative investor.
FIN-2014-R002
It would seem, their classified terms for virtual currency users are as follows....
There are users, exchangers, and administrators.
"For purposes of the guidance, FinCEN refers to the participants in generic virtual currency arrangements, using the terms “exchanger,” “administrator,” and “user.” An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency. An administrator is a person engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency. A user is a person that obtains virtual currency to purchase goods or services on the user’s own behalf."
"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 between 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.8 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.”
Does the above mean that I become a exchanger as soon as I engage in any conversion of bitcoin into fiat or or bitcoin into alt coins?
"How a user engages in obtaining a virtual currency may be described using any number of other terms, such as “earning,” “harvesting,” “mining,” “creating,” “auto-generating,” “manufacturing,” or “purchasing,” depending on the details of the specific virtual currency model involved. The label applied to a particular process of obtaining a virtual currency is not material to the legal characterization under the BSA of the process or of the person engaging in the process to send that virtual currency or its equivalent value to any other person or place. What is material to the conclusion that a person is not an MSB is not the mechanism by which person obtains the convertible virtual currency, but what the person uses the convertible virtual currency for, and for whose benefit. Activities that, in and of themselves, do not constitute accepting and transmitting currency, funds or the value of funds do not fit within the definition of “money transmission services” and therefore are not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs."
This is a little confusing. The last part which I haven't posted yet seems to be FinCen talking directly to the situation with the Company which holds an LLC.
Exchanges require personal identifiable information, it seems like without clarity, it would be entrapment to put ones self at risk of a Bitcoin exchange with such broad regulation specifics.
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