Topic: 2013-06-13 Latest from FinCEN - page 2. (Read 7030 times)

It's the crux of the issue. Fincen is destablizing Bitcoin by wielding arbitrary authority. Taking down Liberty Reserve while allowing the larger banking players to continue with their criminal behavior for a fine/fee is a good example of such arbitrary power. It even undermines Fincen's own enforcement authority in the larger world such that future regulatory actions will likely focus on increasingly smaller players.

I agree that this uncertain regulation is very unsettling however FINcen and DOJ etc has made it pretty clear that they are not big fans fan of the following activity.

Money Laundering
Terrorist Financing
Child/Human Exploitation

If you plan on engaging in or allowing this type of activity then you could be prosecuted.

And they might decide something that's legal this week will be illegal next week. That's arbitrary authority.

Ah, government!

Severian:

According to FinCEN:

"FinCEN’s guidance explains that administrators or exchangers of virtual currencies have
registration requirements and a broad range of AML program, recordkeeping, and reporting
responsibilities. Those offering virtual currencies must comply with these regulatory
requirements, and if they do so, they have nothing to fear from Treasury."

Now if you are allowing illegal activities on your system then are you liable for Criminal enforcement from DOJ/DHS etc.

See: Liberty Reserve ( and possibly Mt. Gox)

I suspect that they don't either. I think they are making it up as they go along.

That's not accurate as Fincen engages in arbitrary enforcement. We have no idea what they're up to.

its not taking away any business from banks. when you put fiat into a payment gateway such as paypal. it sits in a bank account. banks love this as in the middle of the night they can play with your money on the stock markets making their profits in the miliseconds of the days. and you are unaware of this.

but putting fiat into an envelope to then send to another country does not allow the banks the same pleasure of playing with your money. so by bitcoin being the border crossing exchange changes this:

person A take money out of bank -> places in envelope -> send to another country -> poof bank note never seen by a bank again

into this
person A does bank wire to exchange in the same country -> money remains in the country -> bitcoins go where they want -> but fiat money still sits in the bank accounts of the same country

the only thing banks dont like is having to freeze accounts while DOJ/SOCA investigate it. because then even banks cant play with the money when its frozen. so do the banks a favour.. read the regulations about FIAT in your country, follow them and you will see that there is no big deal bitcoin related


again fincen is not after bitcoin people. they are after FIAT traders that are not licenced. the words virtual currency which they wish to regulate are the digital forms (virtual, not physical) of bank notes

Not likely.

FINCEN only has 300 employees...
Of which maybe 3 are working on virtual currencies.

This is all about to change FAST...
When Obama will double the FINCEN workforce with a stroke of a pen.

Once they have detailed lists of Early Adoptors hoarding BTC...
They will pick a few high profile targets from BitCoinTalk...
And heavily armed SWAT teams will descend on your humble abode...
You will be perp-walked in front of your neighbors in handcuffs...
While the nice, sexy TV reporter talks about terrorism, money laundering, and porn.

Let's say you have 5,000 BTC worth $500,000 (and who doesn't, baby)...
But have not been filing Tax Returns and just chilling like Satoshi...
Well, the fine is confiscation, up to 300% in additional fines, plus some quality Club Fed time.

So, theoretically, when our First Adopter friend gets out of the joint...
He will owe the US Govt $1,500,000...
Less $231 that friend-o earned working in the Prison Library at $0.11/hour...
So our First Adopter buddy will owe the US Govt only $1,499,769 plus interest...
Certainly not enough to rat on his business associates and cut a deal.

You're right of course. HSBC did pay a $1.9 Billion fine for facilitating money laundering.

http://www.reuters.com/article/2012/12/11/us-hsbc-probe-idUSBRE8BA05M20121211

Jennifer Shasky Calvery, Director of the Financial Crimes Enforcement Network says:
" keep in mind the combined actions by the Department of Justice and FinCEN took down
a $6 billion money laundering operation (Liberty Reserve), the biggest in U.S. history."


However she somehow fails to mention:


Standard Chartered had processed $250bn
in illegal transactions over nearly a decade of business
 with US-sanctioned countries including Libya, Burma and Sudan.

Two HSBC affiliates sent nearly 25,000 transactions involving $19.4 billion
through their HBUS accounts over seven years without disclosing the transactions’
links to Iran.

HSBC cleared $290 million in “obviously suspicious travelers cheques”
that benefitted Russians “who claimed to be in the used car business.”


Previously HSBC processed $60 trillion (that it TRILLION with a "T") in wire transfer and account activity and
had a backlog of 17,000 unreviewed account alerts
regarding potentially suspicious activity
and a failure to conduct anti-money laundering due diligence
before opening accounts for HSBC affiliates.

?

This is my favorite quote:

"FinCEN’s guidance explains that administrators or exchangers of virtual currencies have
registration requirements and a broad range of AML program, recordkeeping, and reporting
responsibilities. Those offering virtual currencies must comply with these regulatory
requirements, and if they do so, they have nothing to fear from Treasury."

"Virtual currencies are a financial service, and virtual currency administrators and exchangers are
financial institutions."

"we see virtual currency administrators and exchangers as a
type of money services business. These businesses are as much a part of the financial framework
as any other type of financial institution. As such, they have the same obligations as other
financial institutions, and the same obligations as any other money services business out there. "

"action taken against one financial institution [Liberty Reserve] and one type of
financial service ... [in a [ criminal case is [or a] regulatory action is – an
action against a particular violator. With this action we were not painting with a broad brush
again"

Coinbase comes to mind.

HELP banks? How? By taking away their business? I'm sure, they will literally smash in your door to get this service.

Do you think its particularly difficult for them to transfer money in other countries? Why? Because its so expensive? For who?
Do you think that when the asian worker comes to them and wants to send money home, they say: "Oh no, not you again. Please go away, we don't like this kind of business, its too much work. Do it in bitcoins."
(Furthermore, I wonder how the asian family handles bitcoins and what the merchants at the local farmer market think about bitcoin payments.)

Don't get me wrong, I highly sympathise with your ideas, but I fear, they are a bit quixotic in some parts.



There is no need of a coin tainting system. Through the full controll of all exchanges (work in progress), all coins which go through them will be "tainted".

This will be the time when they come to tear down the last pillar - mining. They will knock on your door and say: "Hi Grumpy! We saw that you were quite lucky lately and put some nice chunks of bitcoins in your online wallet. Congratulations. Lets talk about this, we are sure you understand its inappropriate that individuals create value out of nothing and distribute it. Imagine people start printing their own dollars, haha."

They should have thought of that before they let Al Gore invent the internets. They haven't really discussed any game-changing potential, possibly because of the half-brain requirement. If they did, they would be talking about all the beneficial things crypto-currencies offer. Instead, they frame Bitcoin as a foreign currency sponsored by "all kinds of mean nasty ugly looking people."

Again, this "conference" sounds like it's nothing but a lobbyist effort to kill Bitcoin with no evidential reasoning. Hopefully, they will someday focus on administering the network competitively as it is designed rather than fighting it idealistically which they have no moral standing to do so. There are real threats out there now from banks like HSBC that need attention.

I'm afraid it's probably not so easy. Point 3 is highly ambiguous and leaves lots of doors open.

Well technically it's not that simple, transactions that miner includes in a block are already transmitted by the network and most of the nodes have them. Miner only provides a time stamp (in terms of blockchain's block count) for a bunch of transactions by publishing a solution to the proof of work problem along with already existing and already transmitted transactions. So technically miners do not transmit transactions (full nodes do), they only time-stamp them.


+1000

They really need to fix their own problems on the part of "integrity and transparency", as they claim in the document, before exploring new territories. Yeah and rename that "office of terrorism" too! I mean, who in their right mind would want to cooperate with an organization who reports to the office with such a name. Maybe it's a trap and we all will be later tagged by the Prism as "aiding the enemy"

I'll just leave it here:
http://youtube.com/watch?v=KP6pBS6uptE

Because anybody with half a brain can see its game-changing potential. It can subvert the current power structures, which are dependent from financial lobbies that control the usd

Dear Jennifer Shasky Calvery,

Why haven't any of the CEO's, chairmen, or directors of HSBC, Wachovia or other banks caught money laundering over the past several years gotten thrown in prison or personally paid enormous fines?

Until these injustices are remedied you can't expect the Bitcoin community to cooperate.

The main problem with regulation that there are lots of people regulating who don't get it.


Basically, again, this woman is talking about children and her wide interpretation means that every miner is a money transmitter. Consider this: The miner creates a block which includes transactions. Anyone who creates transactions is theoretically transmitting money now.


That is the idiotic part. The woman does not get Bitcoin. It is not a virutal currency that is emitted by an entity. THIS is the problem. If the FinCEN regulates LR, that is kind of alright. There is a service provider giving out a currency and therefore its emitter has certain rights and regulations to uphold.

For an exchange, yes, I also think that a bank should be regulated. But the non-existence of an emittent and the handling by decentralized networks is unknown in our systems before. It is a completely new variable, that with old thinking, will be squashed.


Apart from the usual propaganda talk (Those who exploit children), it demonstrates a clear misunderstanding in how laws will affect this thing. Apart from the fact that the "child exploitation" market is not even financially very relevant, they are all already taken care of by asking for AML laws. There is nothing new needed. No new regulation at all. the only thing necessary is existing exchange businesses running compliance. New regulations regarding Bitcoin will, in every case, miss the mark and the system.

But is this going to be a problem? No. Not for Bitcoin. BTC will go back to obscurity and stay where it is. It will say "Fuck you." And with this single move, that a mienr could be considered a money transmitter, the governments will have created the ultimate underground system. Basically, they declare it illegal to mine it and emit it, because mining it is transmitting it. And there you go: The system has been set up. Instead of creating a legitimate system that is like cash, they have created a virtual Hawala banking system in the underground.