Letter to the EFF

[matonis]

It was like someone pee'd in my corn flakes when I woke up and read this "Legal tender is the best way to help EFF support online civil liberties" on Bitcoin Money Blog. http://www.bitcoinmoney.com/post/6100385027/eff-bitcoin-donation-review

Here's my response on Twitter: Legal tender may be antithetical to online civil liberties http://j.mp/iEWB4T this is most unfortunate @JPBarlow @RaineyReitman @EFF #bitcoin

[S3052]

Jon
I could not agree more

[WNS]

In all likelihood the EFF is making this decision for tax reasons. Specifically that since they left the donations as BTC they have to claim the donation in dollar value at time of receipt, and then they have to claim capital gains for the appreciation.

This is a pain in the ass, which is why I as a miner liquidate my BTC the day I receive them, so that I can claim the liquidation price as the  market price instead of having to calculate capital gains.

I have not sat on a 501(c)3 board for more than a decade, but I remember being regularly concerned that how we did things could put our tax status in jeopardy, making significant capital gains might be such a problem for them.

[elewton]

There's also the issue that the EFF will probably be defending Bitcoin in the near future.
Possessing an income stream in Bitcoin would be a bit of a conflict of interest.

[matonis]

I have not sat on a 501(c)3 board for more than a decade, but I remember being regularly concerned that how we did things could put our tax status in jeopardy, making significant capital gains might be such a problem for them.

I seriously doubt that accepting bitcoin is going to jeopardize their tax-exempt status. Would they refuse donations in gold bars because of the potential capital gains?  University endowments thrive on the capital gains.  This is something else which unfortunately diminishes the role of EFF going forward. Maybe somebody needs to send them 'Snowcrash' but their position and their response are laughable.

They are now irrelevant and other more forward-looking organizations will emerge. Accepting only legal tender to be able to support civil liberties on the Internet is like cancer research foundations dismissing a cure to cancer so that the foundation can continue its work. Nonpolitical cryptocurrencies will do more to secure online civil liberties than the EFF can ever hope to accomplish.

[marcus_of_augustus]

There's also the issue that the EFF will probably be defending Bitcoin in the near future.
Possessing an income stream in Bitcoin would be a bit of a conflict of interest.

The opposite view on that one, is by using bitcoin they are legitimising it and implicitly giving their okay on the legality. To do otherwise, is to lend more legitimacy than they should to the state scrip.

They leave themselves vulnerable to the decisive question, "Why don't you use bitcoin?".

[Timo Y]

How disappointing.  Seems like the EFF is case of "dogs that bark don't bite".  A charity that doesn't practice what it preaches will not be getting my donations anymore.  Perhaps I'm being too harsh?

Anyhow, soon Bitcoin won't need the EFF to speak out for it anymore.  The money will take care of the talking.

[da2ce7]

It may be good to make a bitcoin legal charity that provides legal support to individuals attacked by the state.

[mewantsbitcoins]

How disappointing.  Seems like the EFF is case of "dogs that bark don't bite".  A charity that doesn't practice what it preaches will not be getting my donations anymore.  Perhaps I'm being too harsh?

Anyhow, soon Bitcoin won't need the EFF to speak out for it anymore.  The money will take care of the talking.

No, I don't think you are. They are not getting a pence from me either anymore

[ribuck]

They are not getting a pence from me either anymore

Nor from me. Effectively the EFF said "The best way to help us protect your online freedoms is to not use your online freedoms."

And they said it without realising the irony.

[RodeoX]

I will continue to offer the EFF donations when they take bitcoins again. After starting a thread suggesting we donate to them, I feel kinda burned.
 

[mewantsbitcoins]

I will continue to offer the EFF donations when they take bitcoins again. After starting a thread suggesting we donate to them, I feel kinda burned.
 

Once a traitor - always a traitor.
If it was up to me paypal and EFF would never find their way back to our wiki

[S3052]

Perhaps people who donated to them should ask their bitcoins back from the EFF.

If they do not support bitcoin, they have no right to keep the BTC funds.
And, bitcoin do not need them at all, now with all the big buzz.

Just my few pearls of wisdom...

[coinonymous]

Do you really think their removing the solicitation for BTC donations means they don't support Bitcoin, guys?  I have some direct experience with the EFF and I can pretty much assure you (no, I didn't ask anyone -- I'm surmising) that most legal staff at EFF and probably every single non-legal staffer is pro-Bitcoin.

I understand if you are disappointed by EFF's decision but you need to understand that EFF's core mission is legal defense.  Yes they do advocacy and such and they have a huge symbolic role but ultimately the EFF is really needed when some schmuck with a blog is getting hammered by a bunch of rabid attack-lawyers because he explained how his VCR worked (or whatever).

So feel free to say "we don't need EFF because other people are now taking Bitcoin seriously."  But taking you seriously is not what EFF does.  But when the DOJ suddenly indicts every single penny-ante Bitcoin business operator and starts sending goon squads to escort you to federal prison, you are likely, IMO, to find a renewed appreciation for what the EFF is about when a bunch of guys in corduroys appear out of nowhere and magically make the whole problem go away for you.

Have you guys considered what might happen if EFF were mounting a vigorous defense of Bitcoin, if they were sitting on a huge pile of it?  What if the shit hits the fan a year and a half from now and those 3k coins or whatever are then with 1.2 billion USD?  Do you think that would help the Defense or the Prosecution in the Federal racketeering and money laundering case against your Bitcoin shoe-shine and haircut parlor?  Obviously, it could backfire massively if it creates a real or perceived conflict of interest for EFF, or if EFF were named as a defendant.  Judges could easily kick EFF out of court citing conflict of interest (don't worry they'll appoint a public defender who goes home at 4:45 sharp to his wife and kid every day).

Support Bitcoin, but please try to support the EFF.  They are the closest thing the Bitcoin community has to a friend in the legal world, AINEC.

[FreeMoney]

Have you guys considered what might happen if EFF were mounting a vigorous defense of Bitcoin, if they were sitting on a huge pile of it?  What if the shit hits the fan a year and a half from now and those 3k coins or whatever are then with 1.2 billion USD?  Do you think that would help the Defense or the Prosecution in the Federal racketeering and money laundering case against your Bitcoin shoe-shine and haircut parlor? 

I'm going to go out on a limb and say yes 1.2B would help. But if it's worth that we won't need defense.

[marcus_of_augustus]

They should send their coins to the bitcoin faucet if they do not want them.

[S3052]

They should send their coins to the bitcoin faucet if they do not want them.

+1 this would be exactly the right action from the EFF

[bitcoinBull]

There's also the issue that the EFF will probably be defending Bitcoin in the near future.
Possessing an income stream in Bitcoin would be a bit of a conflict of interest.

This is a good point.

If they want to redeem themselves, they should make clear their where they stand regarding bitcoin.

I'll understand if they don't want to accept donations because of potential conflict of interest.  But they could state that they will defend the freedom of individuals to use bitcoin.  If they do, I'll be more than willing to donate some bitcoin profits to them in US dollars.

[em3rgentOrdr]

Sorry to be the bearer of bad news, but this just came across my news feed today, June 20th, 2011.

https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin

JUNE 20TH, 2011       
EFF and Bitcoin
Announcement by Cindy Cohn

For several months, EFF has been following the movement around Bitcoin, an electronic payment system that touts itself as "the first decentralized digital currency." We helped inform our members about this unique project through our blog and we experimented with accepting Bitcoin donations for several months in an account that was started by others.

However, we’ve recently removed the Bitcoin donation option from the Other Ways to Help page on the EFF website, and we have decided to not accept Bitcoins. We decided on this course of action for a few reasons:

1.   We don't fully understand the complex legal issues involved with creating a new currency system. Bitcoin raises untested legal concerns related to securities law, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And that’s just in the U.S. While EFF is often the defender of people ensnared in legal issues arising from new technologies, we try very hard to keep EFF from becoming the actual subject of those fights or issues. Since there is no caselaw on this topic, and the legal implications are still very unclear, we worry that our acceptance of Bitcoins may move us into the possible subject role.

2.   We don't want to mislead our donors. When people make a donation to a nonprofit like EFF, they expect us to use their donation to support our work. Because the legal territory around exchanging Bitcoins into cash is still uncertain, we are not comfortable spending the many Bitcoins we have accumulated. Because of this, we’re giving the Bitcoins that have been accumulated, or that may accumulate in the future, in the account set up in our name to the Bitcoin faucet, so that they can continue to circulate in the community.1

3.   People were misconstruing our acceptance of Bitcoins as an endorsement of Bitcoin. We were concerned that some people may have participated in the Bitcoin project specifically because EFF accepted Bitcoins, and perhaps they therefore believed the investment in Bitcoins was secure and risk-free. While we’ve been following the Bitcoin movement with a great degree of interest, EFF has never endorsed Bitcoin. In fact, we generally don’t endorse any type of product or service – and Bitcoin is no exception.

We appreciate the outpouring of support we have received from the Bitcoin community and we share that community's commitment to privacy and innovation. We also appreciate their frustration with the privacy problems posed by existing on-line payment systems. However, EFF will no longer be accepting or spending Bitcoins.

[1] We understand that we cannot close the account that has been set up in EFF’s name and that returning the donations to the individual donors would be complex and difficult.

[marcus_of_augustus]

Sorry to be the bearer of bad news, but this just came across my news feed today, June 20th, 2011.

https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin

JUNE 20TH, 2011      
EFF and Bitcoin
Announcement by Cindy Cohn

For several months, EFF has been following the movement around Bitcoin, an electronic payment system that touts itself as "the first decentralized digital currency." We helped inform our members about this unique project through our blog and we experimented with accepting Bitcoin donations for several months in an account that was started by others.

However, we’ve recently removed the Bitcoin donation option from the Other Ways to Help page on the EFF website, and we have decided to not accept Bitcoins. We decided on this course of action for a few reasons:

1.   We don't fully understand the complex legal issues involved with creating a new currency system. Bitcoin raises untested legal concerns related to securities law, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And that’s just in the U.S. While EFF is often the defender of people ensnared in legal issues arising from new technologies, we try very hard to keep EFF from becoming the actual subject of those fights or issues. Since there is no caselaw on this topic, and the legal implications are still very unclear, we worry that our acceptance of Bitcoins may move us into the possible subject role.

2.   We don't want to mislead our donors. When people make a donation to a nonprofit like EFF, they expect us to use their donation to support our work. Because the legal territory around exchanging Bitcoins into cash is still uncertain, we are not comfortable spending the many Bitcoins we have accumulated. Because of this, we’re giving the Bitcoins that have been accumulated, or that may accumulate in the future, in the account set up in our name to the Bitcoin faucet, so that they can continue to circulate in the community.1

3.   People were misconstruing our acceptance of Bitcoins as an endorsement of Bitcoin. We were concerned that some people may have participated in the Bitcoin project specifically because EFF accepted Bitcoins, and perhaps they therefore believed the investment in Bitcoins was secure and risk-free. While we’ve been following the Bitcoin movement with a great degree of interest, EFF has never endorsed Bitcoin. In fact, we generally don’t endorse any type of product or service – and Bitcoin is no exception.

We appreciate the outpouring of support we have received from the Bitcoin community and we share that community's commitment to privacy and innovation. We also appreciate their frustration with the privacy problems posed by existing on-line payment systems. However, EFF will no longer be accepting or spending Bitcoins.

[1] We understand that we cannot close the account that has been set up in EFF’s name and that returning the donations to the individual donors would be complex and difficult.

tl;dr summary .... EFF lawyers soiled their corduroys at the "complex legal issues" surrounding bitcoin ... << bleeding edge lawyers, I guess.