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April 23, 2011, 03:03:29 PM |
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"no laws governing the use of bitcoin" that is not what the Treasury says, apparently from the story about BitcoinUSA the Treasury is calling it a digital currency, which is now labeled a prepaid or stored value product. Issuers of prepaid products and buyers/sellers who exchange them for money are regulated.
"On June 28, 2010, FinCEN issued proposed rule addressing prepaid cards and stored-value. FinCEN is seeking to amend its regulations, which implement the BSA relating to MSBs in an effort to bring non-bank entities in the prepaid sector under regulatory treatment that is more consistent with traditional financial institutions."
Look, I have a friend in Dubai, he says go see Ahmed in the NY restaurant down on Grant street he's going to give you some money. I go in, Ahmed gives me $5000. My friend in Dubai gave $5040 to his associate locally in UAE, that guy picked up the phone, called Ahmed and gave him instructions to pay me $5000. So suddenly some guy named Ahmed gives me $5000 he had in cash in his pocket and he's supposed to follow AML guidelines and reporting requirements? Yes. This is a Hawala, its the oldest type of money transmitter and currently transactions are regulated. The gov says it's illegal for Ahmed to give me money without reporting it.(LOL)
The case of GoldAge, the Secret Service deposited cash and in exchange got e-gold. That's exchange services so what-- right? No, because the next day or even later that day the customer sold the e-gold and directed GoldAge where to send a wire. They sandwiched the transactions together (the quick e-gold buy and sell) and charged them with operating a money transmission service. The gov said, GoldAge received cash and soon after wired it out(minus fees) on behalf of the customer. The customer gave them cash and told them where to wire it, the rest of the e-gold exchanges and fees were simply part of the money transmission transaction.
My point here is that when it comes to Bitcoin or any other new digital currency product you can call it what you like but if they don't want you operating in the U.S. they will find a way for one or two exchange agents to complete a transaction or two and they will label it whatever they want an MSB, Money Transmitter, Money Launder, Criminal Enterprise because it circumvents the intent or spirit of their law as they see it. They will say, "the laws are in place to regulate this type of activity, our agents have shown this type of activity takes place, it is required to be regulated and it's illegal when it's not".
Look at e-bullion, they received funds for customers and deposited the e-bullion in exchange for the incoming funds. That is what their business was, give us money, receive e-bullion. However, since a big ponzi scam the gov was prosecuting used e-bullion bank accounts to accept incoming deposits, e-bullion was labeled by the FBI as the actual ponzi. FBI agent in charge at the press conference, no less, stood up and outright called e-bullion the ponzi, NOT a company processing funds for gold, the operator of a ponzi. But e-bullion was NOT operating any ponzi, we all know what a ponzi it and they were not, but because some transactions moved through them they were labeled the actual "ponzi".
You can say what you like here on this board, and I agree with you, but sooner or later they will complete some transaction and show what they want, right or wrong in our eyes they will label it whatever they need to to close things down and attack it. They will find one guy selling stolen credit card info and label Bitcoin, or one guy selling "china white" and the DEA will call it a drug dealers method of payment. It doesn't matter, and I know this from experience, if you have 10,000 honest merchants and 3 bad ones, the 3 will make the headlines. You can't win over the long haul in the U.S. Now it may take them a week, a year or ten years but they will stop it somehow and good people will get hurt in the process.
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