Let's be honest here...
http://www.coindesk.com/localbitcoins-users-criminal-charges-florida/Criminal charges for selling
BTC on localbitcoins??? This guy might face a felony for crying out loud...
Now localbitcoins is shutting down in Germany due to "regulatory issues" coming...
Exchanges are going to start getting banged out for money too now...
BTC Trading Corp was operating a trading business without a license. This was a lengthy investigation examined of BTC Trading Corp’s two subsidiaries, BTC Co and Litecoin Global Exchange, they calculated 426,986 illegal trades from 10,614 registered accounts. The owner must now pay $60,000!
Do you really think this will be the only case ever??? or Plenty more to come???
It is illegal to move large amounts of money as a business without license. Its similar to currency exchange which is illegal without a license. This does not affect transactions between individuals as long as the transaction is reported in your taxes etc.
This in no way affects the price of Bitcoin and Bitcoin will only continue to rise in value over the years due to limited supply and growing adoption.
It impacts the exchanges. The SEC has established that Bitcoin is a security without their jurisdictional purview. As such, they can fine and/or refer to the DOJ the issuance and broker/dealing of these securities -- the latter being a function that, for legal purposes, the exchanges and purveyors like Coinbase currently fit.
As for individual trades -- no, those are secondary transactions and the SEC has not established jurisdiction in relation to individual investors who are targets, not broker/dealers, of the security. Bitcoin activities undertaken by individuals in their own account are not illegal at all. The exchanges, however, could be fined or forced to shut down at some time in the future -- figure about a year out into the future because the feds drag their feet.
One of two things will happen -- either (a) everything will have to fall within an ETF type format; or (b) the exchanges get shut down and people must trade their stash amongst each other without the exchanges.
It's still tremendously bad news for BTC. Note that although the SEC has established this jurisdiction, they may eventually choose to relinquish regulation to the CFTC or choose to give it some other special treatment. This actually wouldn't surprise me because they'd be doing more damage to existing users of BTC if they came in guns blazing at this point -- they are late to the party and the SEC is actually pretty decent about recognizing as much.
It's something to watch.
