RandomQ (OP)
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July 16, 2012, 07:30:39 PM |
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What is a money transfer?
"Money transmission is selling or issuing in California, or to or from persons located in California, payment instruments, stored value devices or receiving money or monetary value for transmission by electronic or other means."
What is stored Value?
"“Stored value” involves monetary value representing a claim against the issuer that is stored on a digital or electronic medium and accepted as a means of redemption for money or as payment for goods or services. For example, Visa® gift cards. Excluded are cards issued by businesses that also redeem the card for goods or services provided by the issuer or an affiliate (“closed loop”), for example, cards issued by leading coffee chains."
What is Receiving Money for transmission
"“Receiving money for transmission” includes any transaction where money or monetary value is received for transmission within or outside the United States by electronic or other means. Thus, certain new mobile payment applications or emerging payment platforms not offered by banks or other regulated depository institutions could be within this category and subject to regulation and licensing."
So my reading of this is Bitcoins has a stored value since its it can be redemed for money and stored on a digital medium.
Similar to most California licensing requirements, anyone who engages in, solicits, advertises or performs specified “money transmission” services in California or for California residents must be licensed.
So by my reading if you transfer bitcoins or USD to a california resident and your not licensed by california even if you Business is out of state its still illegal.
This showed up on my radar because they are going after small startups that are using digital stored values that are based in california.
What's everyone else read on this?
This could effect exchanges and companies that trade or sell BTC even if they aren't based in california, since all you have to do it sell to a california customer.
My LLC is based in Arizona, but I have bought sold and received BTC/USD in california.
I only spend a maximum of 49% of my time in California so I'm not classified as a resident.
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DeathAndTaxes
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Gerald Davis
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July 16, 2012, 07:35:31 PM Last edit: July 16, 2012, 07:47:21 PM by DeathAndTaxes |
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Bitcoin isn't money at least not under any definition of any existing law. Bitcoin isn't stored value by this or any existing definition because there is no issuer. Per your quote "“Stored value” involves monetary value representing a claim against the issuer that is stored on a digital or electronic medium and accepted as a means of redemption for money or as payment for goods or services. What issuer? You have 1 BTC who is your claim against? Who can you require redeem it for cash value? The reason for regulating stored value issuers is because the stored value by nature requires a level of trust. Consumers are buying this stored value product with a naive expectation they money will always be there. The delayed nature of the redemption (revenue up front, liabilities in the future) is perfect setup for crooks to collect the money and then walk away leaving the consumer holding an empty promise and no value. That dynamic doesn't exist with Bitcoin. There is no guaranteed value. There is nowhere you can seek redemption. There is no issuer. While the CA government could certainly make Bitcoin illegal the langauge of the law as quoted above doesn't. (Also please use quote tags if they are quotes. Makes it hard to read when your text and the quoted text are all jumbled together.)
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jwzguy
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July 16, 2012, 07:39:02 PM |
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D&T hit it on the head. You don't "redeem" Bitcoins.
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Stephen Gornick
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July 16, 2012, 08:20:24 PM |
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So by my reading if you transfer bitcoins That's even technically incorrect. I don't transfer bitcoins to anyone. I simply share some data that my software created. That data happens to allow you to "spend" bitcoins that previously I could spend, so functionally it works like a transfer but at the technical level there's no "transfer" occurring. Perhaps some day CLAG will have some more on this: - http://en.bitcoin.it/wiki/Cryptocurrency_Legal_Advocacy_Group
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jimbobway
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July 16, 2012, 08:31:14 PM |
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So if I store my bitcoins in my mind as a brainwallet, and whisper it to you then putting me in jail would be a violation of my 1st amendment freedom of speech rights.
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ArticMine
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July 16, 2012, 08:58:34 PM |
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IANAL Here is the link to the actual source http://dfi.ca.gov/licensees/moneytransmitters/. It does not make Bitcoin illegal in California far from it. As far as I can see Bitcoin does not meet the definition of "payment instrument" or "stored value" under the legislation. It very likely does however meet the definition of money under the legislation. The definition of "money transmission is very interesting (o) "Money transmission" means any of the following: (1) Selling or issuing payment instruments. (2) Selling or issuing stored value. (3) Receiving money for transmission. In the case of Bitcoin sending bitcoins one owns is not regulated, but receiving bitcoins from someone else for the purpose of sending those bitcoins to a third party is regulated.
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DeathAndTaxes
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Gerald Davis
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July 16, 2012, 09:38:15 PM |
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How do you reach the conclusion that Bitcoin meets the definition of money under the legislation: (n) "Money" means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments. Which government, intergovernmental organization, or agreement between two or more governments has authorized or adopted Bitcoin as a medium of exchange?
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RandomQ (OP)
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July 16, 2012, 10:31:01 PM |
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How do you reach the conclusion that Bitcoin meets the definition of money under the legislation: (n) "Money" means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments. Which government, intergovernmental organization, or agreement between two or more governments has authorized or adopted Bitcoin as a medium of exchange? Its kinda funny I wanted your input on this D&T From the law. "(m) "Monetary value" means a medium of exchange, whether or not redeemable in money." (v) "Stored value" means monetary value representing a claim against the issuer that is stored on an electronic or digital medium and evidenced by an electronic or digital record, and that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services.
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ArticMine
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July 17, 2012, 12:21:25 AM |
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How do you reach the conclusion that Bitcoin meets the definition of money under the legislation: (n) "Money" means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments. Which government, intergovernmental organization, or agreement between two or more governments has authorized or adopted Bitcoin as a medium of exchange? What does authorized or adopted here mean? For example if Bitcoin meets the definition of "money" under the laws of any country, even if not explicit, then the case can be made that that country authorized its use as a medium of exchange. It is a huge negative to try to prove in court in order to make the case that Bitcoin is not money. By the way most countries levy a VAT or GST and those countries have a huge incentive to treat Bitcoin as money in order to avoid the avoidance and evasion of the VAT or GST.
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unclemantis
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July 23, 2012, 01:57:59 AM |
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Bitcoin is really just a bunch of binary things that we place value on. Same as comic books. We are just collecting a series of ones and zeros and just certain ones and zeros are valued differently based on deciding factors. We are really just collecting baseball cards
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Matthew N. Wright
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July 23, 2012, 02:03:12 AM |
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Spirit of law > letter of law
Find out if selling W.O.W. gold or Linden Dollars is Money Tranmission and you'll have your answer for bitcoin.
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unclemantis
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July 23, 2012, 02:13:34 AM |
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Spirit of law > letter of law
Find out if selling W.O.W. gold or Linden Dollars is Money Tranmission and you'll have your answer for bitcoin.
All in all it is Laundering. Kinda funny how they call it that when gamers tend to not tend to real life chores very much
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DeathAndTaxes
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Gerald Davis
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July 23, 2012, 02:23:04 AM |
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Who said anything about money laundering? This bill doesn't even cover that. Existing laws are already on the books covering money laundering. And no selling WOW gold (or anything) isn't money laundering unless it meets the statutory elements of money laundering (namely that the intent is to transfer funds which are involved in or are the proceeds of a criminal enterprise).
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niko
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July 24, 2012, 05:26:13 AM |
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So if I store my bitcoins in my mind as a brainwallet, and whisper it to you then putting me in jail would be a violation of my 1st amendment freedom of speech rights.
This metaphor has been brought up in several threads, and is an important one. Bitcoin network simply allows people to broadcast information, and to agree upon the veracity of said information. Free speech.
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They're there, in their room. Your mining rig is on fire, yet you're very calm.
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becoin
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July 24, 2012, 05:40:54 AM |
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From the law. "(m) "Monetary value" means a medium of exchange, whether or not redeemable in money." This is funny. Every object in this Universe can be used as medium of exchange!
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unclemantis
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July 26, 2012, 12:36:35 AM |
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From the law. "(m) "Monetary value" means a medium of exchange, whether or not redeemable in money." This is funny. Every object in this Universe can be used as medium of exchange! My brother in law traded his mouse for a ton of old Nintendo cartridges. Now the mouse was a $20 mouse when he got it and the Nintendo games where, you know about 50 bucks a piece at their prime. So how the hell do you regulate?
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