based on the letter we believe they have some significant misunderstandings on how this technology works.
You are too polite.
He's a good businessman.
Topic: [ANN] Tangible Cryptography suspends Bitcoin related transaction. - page 5. (Read 66806 times)
June 04, 2013, 03:29:29 PM
You are too polite.
He's a good businessman.
June 04, 2013, 12:41:35 PM
OK, total newb here, but the U.S. IS the land of suit/countersuit. Couldn't Tangible Cryptography take steps to protect itself and any investors by seeking legal redress from the Commonwealth of Virginia for any loss or possible loss of income due to interference with its business on the basis of such a vague charge? Go on the offensive! Fight back! (grin)
Simple answer is no. The notice from the commonwealth only indicates we "may" be engaged unlicensed money transmission. There is only a demand to cease "if" we are engaged in activity which requires licensure. However it is prudent for us to stop at this time until we have clarity on the position of the government. At this point it is our intent to avoid an adversarial situation which likely will be costly and time consuming and instead open a dialog with the commission as Bitcoin is an emergent technology and based on the letter we believe they have some significant misunderstandings on how this technology works.
June 04, 2013, 12:14:45 PM
Most state money transmission laws are concerned primarily with protecting the public from people of low character running off with funds, as opposed to the Feds, who are interested in making sure no one moves a penny without "proper oversight." Once OP's attorney makes it clear that he is simply purchasing virtual goods, I bet he'll be right back to business.
It could be a somewhat difficult case because of how broadly worded the Virginia law is.
Quote from: VA Code § 6.2-1900
"Money transmitter" means a person engaged in the business of money transmission.
"Money transmission" means receiving money or monetary value for transmission by wire, facsimile, electronic means or other means or selling or issuing stored value.
"Stored value" means monetary value that is evidenced by an electronic record.
"Monetary value" means a medium of exchange, whether or not redeemable in money.
"Money transmission" means receiving money or monetary value for transmission by wire, facsimile, electronic means or other means or selling or issuing stored value.
"Stored value" means monetary value that is evidenced by an electronic record.
"Monetary value" means a medium of exchange, whether or not redeemable in money.
June 04, 2013, 11:14:40 AM
OK, total newb here, but the U.S. IS the land of suit/countersuit. Couldn't Tangible Cryptography take steps to protect itself and any investors by seeking legal redress from the Commonwealth of Virginia for any loss or possible loss of income due to interference with its business on the basis of such a vague charge? Go on the offensive! Fight back! (grin)
June 03, 2013, 02:51:24 PM
Most state money transmission laws are concerned primarily with protecting the public from people of low character running off with funds, as opposed to the Feds, who are interested in making sure no one moves a penny without "proper oversight." Once OP's attorney makes it clear that he is simply purchasing virtual goods, I bet he'll be right back to business.
This is the Commonwealth of Virginia, otherwise known as DC South. They're in lockstep with Federal regulators. If TC manages to outlawyer them, they'll find another reason to put the freeze on. TC has my undying respect for being open as long as he has been without coming into their sights.
You're more optimistic than I am but in my experience, once the Commonwealth has you in range they don't let go.
June 03, 2013, 02:42:48 PM
I will be dumbfounded if this decision is not reversed. If these bad decisions are allowed to stand it will set a precedent for future bad decisions regarding bitcoin.
I agree. If it comes down to it, and we need to set up a defense fund I will be happy to donate.
Happy to donate as well, but I don't think it will go that far.
Most state money transmission laws are concerned primarily with protecting the public from people of low character running off with funds, as opposed to the Feds, who are interested in making sure no one moves a penny without "proper oversight." Once OP's attorney makes it clear that he is simply purchasing virtual goods, I bet he'll be right back to business.
The vile worm who made the complaint obviously struggles for a reason to exist. He should do the noble thing and reduce his oxygen consumption by 100%.
June 03, 2013, 02:25:26 PM
Speaking as a fellow Virginian and a customer, this is some bullshit. I hope they get their foot off your neck.
I also reside in Virginia and this thread comes as no surprise to me, the Commonwealth will fuck someone over hard for all kinds of dumb shit.
June 03, 2013, 01:43:32 PM
Doesn't criterion 4, "Seller or redeemer of traveler's checks, money orders or stored value", pretty much fit the bill?
Our responses in this thread will be limited until we get some resolution however it is important to understand state law and federal law don't necessarily have the same definitions even for terms with the same "name". Generally speaking the law will define a term and it has that meaning and only that meaning in the scope of that definition.
As we indicated in the response at the federal level however FinCEN has provided guidance that Bitcoins are not stored value and virtual currency does not fall under the definition of "currency dealer or exchanger". FinCEN has changed the definition to "stored value" to be more inclusive of other prepaid products by using the term "prepaid access" however at the federal level "stored value" and "prepaid access" can be considered synonymous.
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
Quote
Providers and Sellers of Prepaid Access
A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies. 18
Dealers in Foreign Exchange
A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations.
A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies. 18
Dealers in Foreign Exchange
A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations.
Ok. Fair argument.
June 03, 2013, 01:37:27 PM
Doesn't criterion 4, "Seller or redeemer of traveler's checks, money orders or stored value", pretty much fit the bill?
Our responses in this thread will be limited until the issue is resolved however FinCEN guidance in April 2013 clearly indicates no other category of MSB applies. It is important to understand state law and federal law don't necessarily have the same definitions even for terms with the same "name". Generally speaking the law will define a term and it has that meaning and only that meaning in the scope of that definition. As we indicated in the response at the federal level however FinCEN has provided guidance that Bitcoins are not stored value and virtual currency does not fall under the definition of "currency dealer or exchanger". FinCEN no longer uses the word "stored value" in regulations preferring instead the more inclusive "prepaid access" however some docs are still out of date so you may still see the older term. At the federal level the two terms can be considered synonymous.
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
Quote
Providers and Sellers of Prepaid Access
A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies. 18
Dealers in Foreign Exchange
A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations.
A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies. 18
Dealers in Foreign Exchange
A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations.
June 03, 2013, 01:11:31 PM
Doesn't criterion 4, "Seller or redeemer of traveler's checks, money orders or stored value", pretty much fit the bill?
No. Bitcoins have no "stored value". There is no guarantee that a Bitcoin will be worth anything, ever, and there is no obligation on the part of any party to pay anything to a holder of a Bitcoin. Like used collector stamps, they only have value because others will buy them (at least at the current time - it is clear that these actions are intended to chill the market by removing buyers from it).
June 03, 2013, 01:09:33 PM
Quote
Money Services Business
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
If Tangible Cryptography were to have wanted to choose something other than Money transmitter, there's nothing else that really applies. And money transmitter isn't really correct either.
Bitcoins simply is a round peg that doesn't fit in any of the regulator's square holes.
Why a combination of (4) and (5) would not be pretty close?
June 03, 2013, 01:07:42 PM
Well, the initial finding was wrong on its face. The site doesn't sell or issue anything. It buys Bitcoins for cash. It's pretty clear that some other person or entity filed a complaint, either out of ignorance or malice, that contained a factually incorrect description of their business activities. The state then took this complaint at face value, without investigation, despite asserting that it had conducted an "initial investigation". Had someone during the "initial investigation" even visited the site, they would have discovered that they do not issue or sell anything. This is akin to the state telling someone that they must stop buying things on eBay.
June 03, 2013, 01:03:59 PM
The company has been given thirty days to provide written explanation on why our activity is exempt from licensing under current law. The commission has formally stated that unless exempt from licensing we must stop further activity until such time as we apply for and obtain a Money Transmitter license.
I see that Tangible Cryptography's MSB registration (#31000023734880), dated March 23, 2013, lists MSB Activities as "Mone transmitter".
- http://www.fincen.gov/financial_institutions/msb/msbstateselector.html
The types of activities to choose from include:
Quote
Money Services Business - The term "money services business" includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:
(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.
- http://www.fincen.gov/whatsnew/html/LaunchNewMSBRegistrationSite.html(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.
If Tangible Cryptography were to have wanted to choose something other than Money transmitter, there's nothing else that really applies. And money transmitter isn't really correct either.
Bitcoins simply is a round peg that doesn't fit in any of the regulator's square holes.
Doesn't criterion 4, "Seller or redeemer of traveler's checks, money orders or stored value", pretty much fit the bill?
June 03, 2013, 12:56:19 PM
Terrible news. TC is definitely an asset to the BTC community. Hopefully everything will work out for the best.
June 03, 2013, 12:32:48 PM
Speaking as a fellow Virginian and a customer, this is some bullshit. I hope they get their foot off your neck.
June 03, 2013, 11:57:38 AM
I will be dumbfounded if this decision is not reversed. If these bad decisions are allowed to stand it will set a precedent for future bad decisions regarding bitcoin.
I agree. If it comes down to it, and we need to set up a defense fund I will be happy to donate.
Put me down for a bit.
June 03, 2013, 12:23:07 PM
The company has been given thirty days to provide written explanation on why our activity is exempt from licensing under current law. The commission has formally stated that unless exempt from licensing we must stop further activity until such time as we apply for and obtain a Money Transmitter license.
I see that Tangible Cryptography's MSB registration (#31000023734880), dated March 23, 2013, lists MSB Activities as "Money transmitter".
- http://www.fincen.gov/financial_institutions/msb/msbstateselector.html
The types of activities to choose from include:
Quote
Money Services Business - The term "money services business" includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:
(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.
- http://www.fincen.gov/whatsnew/html/LaunchNewMSBRegistrationSite.html(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.
If Tangible Cryptography were to have wanted to choose something other than Money transmitter, there's nothing else that really applies. And money transmitter isn't really correct either.
Bitcoins simply is a round peg that doesn't fit in any of the regulator's square holes.
June 03, 2013, 12:12:13 PM
June 03, 2013, 09:41:22 AM
Good luck and keep up the good fight!!!
June 03, 2013, 11:09:37 AM
How is FastCash4Bitcoins.com different from someone posting an ad on Craigslist offering to buy bitcoins? Because it's a company with a website? Is it the TLD that sets them apart? Seriously... if they are a MTB, we are likely all MTBs. Posting a buy order on an exchange is essentially the same thing - offering to buy bitcoins from somebody else.
This is a bad decision made by ignorant officials who are either too dumb or too proud to ask questions and learn about something they know nothing about before making decisions that affect it. If it's because they're worried about getting "their share"... they would have to send warnings to anyone who buys bitcoins from someone else. And if that's the case, they need to start sending warnings to everyone who buys anything from someone else because it is also exchanging fiat currency for something of value... which is all that was happening here. They were not creating or issuing bitcoins; they were just offering to buy something that already existed.
I will be dumbfounded if this decision is not reversed. If these bad decisions are allowed to stand it will set a precedent for future bad decisions regarding bitcoin.
/rant
This is a bad decision made by ignorant officials who are either too dumb or too proud to ask questions and learn about something they know nothing about before making decisions that affect it. If it's because they're worried about getting "their share"... they would have to send warnings to anyone who buys bitcoins from someone else. And if that's the case, they need to start sending warnings to everyone who buys anything from someone else because it is also exchanging fiat currency for something of value... which is all that was happening here. They were not creating or issuing bitcoins; they were just offering to buy something that already existed.
I will be dumbfounded if this decision is not reversed. If these bad decisions are allowed to stand it will set a precedent for future bad decisions regarding bitcoin.
/rant
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