Wanted to bump this thread back up and see if there were any new developments. I have recently talked with a lady at FINCEN who told me that personally buying and selling bitcoins for cash was not an issue and I would not be considered a money transmitter or MSB. So my question now is if machines like the Skyhook can qualify as just an extension of me since there is no third party involved. I'm thinking it can and that's the way around the MSB and money transmitter status.
It looks like some of the other BTM are in trouble with FINCEN/AML due to there being a third party involved in the transaction (robocoin?). I plan to talk with FINCEN again soon but wondered if anyone else has dealt with these issues and the possible ramifications of just a standalone unit.
UPDATE: Talked with FINCEN on 4/08/2015. They have stopped being helpful and will only read the definitions to you as to user, administrator, exchanger. Play at your own risk.
Topic: Bitcoin ATM questions (Read 7587 times)
I am 99.99% sure one would need a money transmitter license in the US to exchange bitcoin. Running a bitcoin ATM can also be classified as an exchange by Fincen
Just to clarify the terminology, FinCEN does not license money transmitters. It's the money transmitters who register with FinCEN. Licensing happens at the state level where many have not taken any position on Bitcoin yet. So yes, you must be registered with FinCEN, but do you have to be licensed as a money transmitter in your state? It depends...
More detail on my blog here...
http://blog.atlantabitcoin.com/us-bitcoin-atm-regulation-101/
I am 99.99% sure one would need a money transmitter license in the US to exchange bitcoin. Running a bitcoin ATM can also be classified as an exchange by Fincen
As far as the US goes, operators don't talk about it much but I think most of them are operating without a MT license at the state level, but registered as a MT at the federal level. Then there are what I call "gorilla" operators who operate low key skyhook machines that have not been publicly advertised.
Yes, you must comply with the FinCEN guidance if you intend to operate legally.
A common argument that operators make is that Bitcoin ATMs do not meet the definition of money transmission at the state level. Prepaid cards have their own set of AML requirements so that comparison is not ideal. Regardless of what you call it, the details of how it operates will determine if it is in or out of scope of a given states MT laws.
I have not heard of any arrests of operators either.
(this is not legal advise but I can recommend an attorney!)
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...does that mean you will need a money transmitter license because FinCen says so?
Yes, you must comply with the FinCEN guidance if you intend to operate legally.
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Wouldn't 1 way bitcoin atm's (dispensing bitcoins for cash but not giving out cash) be more like a prepaid card or vending machine? Since technically you are putting money in to get say a printed paper copy of bitcoin or transferred to your bitcoin address much like a gift card?
A common argument that operators make is that Bitcoin ATMs do not meet the definition of money transmission at the state level. Prepaid cards have their own set of AML requirements so that comparison is not ideal. Regardless of what you call it, the details of how it operates will determine if it is in or out of scope of a given states MT laws.
I have not heard of any arrests of operators either.
(this is not legal advise but I can recommend an attorney!)
Do the owners of most of the up and running bitcoin atm's hold a money transmitter license?
IRS says bitcoin is an asset, does that mean you will need a money transmitter license because FinCen says so?
Wouldn't 1 way bitcoin atm's (dispensing bitcoins for cash but not giving out cash) be more like a prepaid card or vending machine? Since technically you are putting money in to get say a printed paper copy of bitcoin or transferred to your bitcoin address much like a gift card?
Lastly, I understand it is still mostly gray area. With that said, I had trouble finding any persons who were arrested, sued, or had their bitcoin atm's taken down for not holding a license. Anyone care to comment or report of anyone that was actually taken down for owning a bitcoin atm without a license?
Thanks.
IRS says bitcoin is an asset, does that mean you will need a money transmitter license because FinCen says so?
Wouldn't 1 way bitcoin atm's (dispensing bitcoins for cash but not giving out cash) be more like a prepaid card or vending machine? Since technically you are putting money in to get say a printed paper copy of bitcoin or transferred to your bitcoin address much like a gift card?
Lastly, I understand it is still mostly gray area. With that said, I had trouble finding any persons who were arrested, sued, or had their bitcoin atm's taken down for not holding a license. Anyone care to comment or report of anyone that was actually taken down for owning a bitcoin atm without a license?
Thanks.
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