From: http://bitcoinmagazine.com/fincen-bitcoin-users-not-regulated-exchanges-are/
"Fortunately, payment processors such as BitPay are exempt. BitPay is legally classified as a payment processor, not a money transmitter. Gallippi points to 31 CFR § 1010.100(ff)(5)(ii)(A)–F, a set of FINCEN rules which clarify that “the term money transmitter does not include a person who only … (ii) Acts as a payment processor to facilitate the purchase of, or payment of a bill for, a good or service through a clearance and settlement system by agreement with the creditor or seller.” Becuase BitPay deals financially only with sellers, CEO Tony Gallippi explains, and not with customers, BitPay is in the clear."
Doesn't that apply to you as well? You don't sell bitcoin, do you?
Topic: [ANN] Tangible Cryptography, LLC files for registration as MSB - page 2. (Read 6830 times)
So you filed the FINCEN application but you have not become a Money Transmitter in any state, correct?
Tangible Cryptography is registered as a MSB with FinCEN it is not registered as a Money Transmitter in any state. No state entity as of yet defines the exchange of virtual currency as Money Transmission. It may only be a matter of time but that time has not arrived yet.
So you filed the FINCEN application but you have not become a Money Transmitter in any state, correct?
How many states have you guys registered FASTCASH in or did you just do the Federal version?
FastCash is a brand name, the legal entity is Tangible Cryptography, LLC. It is incorrect to say "federal version" as if they are equivalents. Recently FinCEN expanded their guidelines to include virtual currencies at this time we are not aware of any state updating their regulations related to virtual currencies. We will register will relevant authorities if and when necessary.
How many states have you guys registered FASTCASH in or did you just do the Federal version?
I am a U.S. citizen living in Florida. My bank is a U.S. bank chartered in Florida. You have disabled ACH to my bank account. Why?
ACH & Bank Wire are unavailable at this time. We are looking to restore these funding options but there is no ETA at this time.
I am a U.S. citizen living in Florida. My bank is a U.S. bank chartered in Florida. You have disabled ACH to my bank account. Why?
Pretty cool! GLWI.
You are stopping cash deposits because no one understands the law or guidelines using it with bitcoin or no laws or guidelines exist for the use of cash deposits to buy bitcoin? If no such law or guideline exists, then it is not unlawful to continue doing it? Just curious since that was the preferred method I used. Thanks.
There are new guidelines from the Department of Treasury's FINCEN unit... the Financial Criminal Enforcement Network and anyone in the US who is trading commercially in bitcoin (acting as any sort of exchange) would be wise to do the same. The US government is VERY serious about money laundering and that is the issue at hand. What is about to happen is all the wannabe's are about to disappear and only the few strong enough to pay tens of thousands of dollars in registration fees (to start) will be players in the fiat->btc->fiat business.
For FC4B, do you accept international customers that will take a Company Check as payment?
What is needed to ensure that international bank wires are not going to Americans? Or the account holder is not an American? Can I give documentation to prove that I am not an American, therefore you can send me an international bank wire?
If we have a foreign passport or foreign birth certificate, should that not be enough to prove status as not American in foreign land?
If we have a foreign passport or foreign birth certificate, should that not be enough to prove status as not American in foreign land?
True but we have no interest in the complexity of maintaining those records. For the time being we will simply bypass the issue by not wiring funds out of the country.
What is needed to ensure that international bank wires are not going to Americans? Or the account holder is not an American? Can I give documentation to prove that I am not an American, therefore you can send me an international bank wire?
If we have a foreign passport or foreign birth certificate, should that not be enough to prove status as not American in foreign land?
If we have a foreign passport or foreign birth certificate, should that not be enough to prove status as not American in foreign land?
You are stopping cash deposits because no one understands the law or guidelines using it with bitcoin or no laws or guidelines exist for the use of cash deposits to buy bitcoin? If no such law or guideline exists, then it is not unlawful to continue doing it? Just curious since that was the preferred method I used. Thanks.
Tangible Cryptography LLC has filed with FinCEN for registration as a Money Service Business (MSB). In light of the guidance from FinCEN released last month we have taken steps to become compliant with the regulations imposed on "virtual currency exchangers". On the advice of legal counsel, Tangible Cryptography filed for registration as a MSB. Even prior to FinCEN guidance management at Tangible Cryptography concluded it was a matter of when not if Bitcoin related enterprises would be subject to regulation. Our policies and procedures put in place over the last year have been designed to make this transition as easy as possible.
What changes will occur with FastCash4Bitcoins?
At this time there are no changes. On advice of counsel our existing procedures are sufficient to meet the regulatory requirements of a MSB. It is important to understand that FC4B has ALWAYS prohibited third party transactions (Bob using FC4B site to pay funds to an account owned by Alice). Users attempting such third party transactions face financial penalties (per our terms of service), closure of account and now under MSB regulations we may be mandated to report these transactions. We have no intentions on allowing third party transactions and the overwhelming majority of our users understand and respect this. We have designed our site, and payment methods to be compliant with FinCEN guidelines. Third party transactions remain prohibited on FastCash4Bitcoins and in the future once our registration with FinCEN is complete these prohibited transactions are likely to cause further issues for users involved.
What changes will occur with Bitcoins Direct?
We are no longer accepting cash deposits effective immediately. The MSB regulations that FinCEN has imposed on "virtual currency exchangers" were never intended for this role, and they contain provisions which are nonsensical and at best vague when applied to a "virtual currency exchanger". The reporting and identification requirements for currency transactions are one such area. In this case "currency" is defined as the physical money of the United States, and foreign governments (to include certain certified instruments such as cashier's checks and money orders). We have sought clarification from FinCEN and will avoid these types of transactions until we have better understanding of the requirements.
As a user of FastCash4Bitcoins or Bitcoins Direct what do I need to do?
Nothing other than continue to use the sites as intended. We have designed our services to ensure that we don't engage in transactions which require enhanced identification or mandated reporting (except in cases of willful abuse by the user). If you use our services as intended (your coins sold to Tangible Cryptography for payment into an account in your name) you can continue to use our services as you always have. We have specifically designed our services to ensure that a user would have to be willfully violating our terms of service to create a transaction (or series of transactions) which result in mandated reporting or enhanced identification requirements. In the more than five thousand successfully completed transactions there have been less than a dozen which may have mandated reporting if Tangible Cryptography has been an MSB. All of these transactions involve a blatant and willful abuse of the system (and a complete lack of common sense). Examples include accounts under a false name, single user with multiple accounts (27 to be exact), user sending bitcoins to multiple accounts (and notifying us when the transaction was delayed), user willfully creating accounts under another person's name (a law firm who had no knowledge of the transaction), user unable to complete a transaction because they did not have identification matching name on the check he requested, and user admitting of his own volition (without any prompting by our staff) that the funds in the transaction are the proceeds of criminal activity). The bar for filing a SAR is generally pretty high and the setup of our service ensure you could not accidentally be reported as a result of a common mistake or misunderstanding.
Why was bullion removed from FastCash4Bitcoins?
Bullion sales are not considered money transmission. Given the reduced regulatory burden we will be processing bullion sales in a separate site launching soon. Same great service and prices but under a new brand dedicated to bullion sales.
Why do you not allow international bank wires on FastCash4Bitcoins?
It is ironic that the reason we prohibit International Transactions is because we do not have the capabilities to ensure the account holder is not an American. Certain provisions of FACTA require financial institutions to record transactions of Americans made to foreign accounts. Without the ability to guarantee a client is not an American we have on the advice of counsel decided to limit our outbound transactions to US based banks. This ensures compliance by default. It is possible this decision will be changed in the future however there is no plan or ETA on that.
Are you going to report all my transactions to the government?
No. MSB are only required to file reports under certain conditions. The two most common scenarios are "suspicious activity" (as defined by FinCEN), and transactions involving more than $10,000 in currency. In this case "currency" is defined as the physical money of the United States, and foreign governments (to include certain certified instruments such as cashier's checks and money orders). Neither of our sites involve physical currency and the bar for suspicious activity is rather high. The nature of our service and limited payment options ensure that the filing of a SAR would require a user to intentionally violate our terms and conditions.
If you file a SAR will you notify me?
Financial Institutions are prohibited from notifying an entity that a SAR has been filed or that their transaction may result in a SAR. We have taken steps to ensure that no user using our service as intended could produce a transaction or set of transaction that would give mandate reporting under the definitions of "suspicious activity". If a user wilfully violates our terms of service and engages in activity such as but not limited to the following we may be mandated to file a SAR:
What changes will occur with FastCash4Bitcoins?
At this time there are no changes. On advice of counsel our existing procedures are sufficient to meet the regulatory requirements of a MSB. It is important to understand that FC4B has ALWAYS prohibited third party transactions (Bob using FC4B site to pay funds to an account owned by Alice). Users attempting such third party transactions face financial penalties (per our terms of service), closure of account and now under MSB regulations we may be mandated to report these transactions. We have no intentions on allowing third party transactions and the overwhelming majority of our users understand and respect this. We have designed our site, and payment methods to be compliant with FinCEN guidelines. Third party transactions remain prohibited on FastCash4Bitcoins and in the future once our registration with FinCEN is complete these prohibited transactions are likely to cause further issues for users involved.
What changes will occur with Bitcoins Direct?
We are no longer accepting cash deposits effective immediately. The MSB regulations that FinCEN has imposed on "virtual currency exchangers" were never intended for this role, and they contain provisions which are nonsensical and at best vague when applied to a "virtual currency exchanger". The reporting and identification requirements for currency transactions are one such area. In this case "currency" is defined as the physical money of the United States, and foreign governments (to include certain certified instruments such as cashier's checks and money orders). We have sought clarification from FinCEN and will avoid these types of transactions until we have better understanding of the requirements.
As a user of FastCash4Bitcoins or Bitcoins Direct what do I need to do?
Nothing other than continue to use the sites as intended. We have designed our services to ensure that we don't engage in transactions which require enhanced identification or mandated reporting (except in cases of willful abuse by the user). If you use our services as intended (your coins sold to Tangible Cryptography for payment into an account in your name) you can continue to use our services as you always have. We have specifically designed our services to ensure that a user would have to be willfully violating our terms of service to create a transaction (or series of transactions) which result in mandated reporting or enhanced identification requirements. In the more than five thousand successfully completed transactions there have been less than a dozen which may have mandated reporting if Tangible Cryptography has been an MSB. All of these transactions involve a blatant and willful abuse of the system (and a complete lack of common sense). Examples include accounts under a false name, single user with multiple accounts (27 to be exact), user sending bitcoins to multiple accounts (and notifying us when the transaction was delayed), user willfully creating accounts under another person's name (a law firm who had no knowledge of the transaction), user unable to complete a transaction because they did not have identification matching name on the check he requested, and user admitting of his own volition (without any prompting by our staff) that the funds in the transaction are the proceeds of criminal activity). The bar for filing a SAR is generally pretty high and the setup of our service ensure you could not accidentally be reported as a result of a common mistake or misunderstanding.
Why was bullion removed from FastCash4Bitcoins?
Bullion sales are not considered money transmission. Given the reduced regulatory burden we will be processing bullion sales in a separate site launching soon. Same great service and prices but under a new brand dedicated to bullion sales.
Why do you not allow international bank wires on FastCash4Bitcoins?
It is ironic that the reason we prohibit International Transactions is because we do not have the capabilities to ensure the account holder is not an American. Certain provisions of FACTA require financial institutions to record transactions of Americans made to foreign accounts. Without the ability to guarantee a client is not an American we have on the advice of counsel decided to limit our outbound transactions to US based banks. This ensures compliance by default. It is possible this decision will be changed in the future however there is no plan or ETA on that.
Are you going to report all my transactions to the government?
No. MSB are only required to file reports under certain conditions. The two most common scenarios are "suspicious activity" (as defined by FinCEN), and transactions involving more than $10,000 in currency. In this case "currency" is defined as the physical money of the United States, and foreign governments (to include certain certified instruments such as cashier's checks and money orders). Neither of our sites involve physical currency and the bar for suspicious activity is rather high. The nature of our service and limited payment options ensure that the filing of a SAR would require a user to intentionally violate our terms and conditions.
Quote
Money transmitters ... that are subject to the requirements of the Bank Secrecy Act and its implementing regulations (31 CFR Chapter X are required to file a suspicious activity report (SAR-MSB) with respect to:
a. Any transaction conducted or attempted by, at, or through a money services business involving or aggregating funds or other assets of at least $2,000 when the money services business knows, suspects, or has reason to suspect that:
i. The transaction involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the nature, source, location, ownership or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation;
ii. The transaction is designed, whether through structuring or other means, to evade any regulations promulgated under the Bank Secrecy Act; or
iii. The transaction has no business or apparent lawful purpose and the money services business knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.
iv. The transaction involves the use of the money services business to facilitate criminal activity.
http://www.fincen.gov/forms/files/fin109_sarmsb.pdfa. Any transaction conducted or attempted by, at, or through a money services business involving or aggregating funds or other assets of at least $2,000 when the money services business knows, suspects, or has reason to suspect that:
i. The transaction involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the nature, source, location, ownership or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation;
ii. The transaction is designed, whether through structuring or other means, to evade any regulations promulgated under the Bank Secrecy Act; or
iii. The transaction has no business or apparent lawful purpose and the money services business knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.
iv. The transaction involves the use of the money services business to facilitate criminal activity.
If you file a SAR will you notify me?
Financial Institutions are prohibited from notifying an entity that a SAR has been filed or that their transaction may result in a SAR. We have taken steps to ensure that no user using our service as intended could produce a transaction or set of transaction that would give mandate reporting under the definitions of "suspicious activity". If a user wilfully violates our terms of service and engages in activity such as but not limited to the following we may be mandated to file a SAR:
- create transactions under a false name.
- open an account under the name of third party.
- announce, declare, or otherwise inform the staff that fund are the result of criminal activity.
- use multiple accounts with intentional mispellings of the users name.
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