Topic: Bitcoin in France: first legal decision directly related to Bitcoin? - page 13. (Read 63018 times)

I am going to have to get around writing that letter to Fintrac, asking for clarification of their guidlines in light of Bitcoin.


"money" is defined as "a medium of exchange." Something can be money without being a "virtual currency", which is often issued by a specific issuer, pegged to a specific currency, and redeamable for goods/services at the issuer. A "virtual currency" is essentially a coupon.

The difficulty is that even if bitcoin is just considered money, it is still a regulatory pain. For example, if just relaying transactions makes you a Money services businesses (in Canada), the Guideline 6C: Record Keeping and Client Identification for Money Services Businesses is impossible for a bitcoin node to meet. Specifically, section 3.7 Records about certain funds remitted or transmitted
Essentially, no Electronic Funds Transfers involving an annoymized, public transaction record.
Edit: (I think it may be possible to convince FINTRAC to leave bitcoin alone by burying them in paper following the letter of their guidelines)(bold in original)(Possible loophole: does FINTRAC follow RFC 2119 when they use the word "should"?)

I think this "security theater" needs to end. We should declare that the Terrorists won the "War on Terror" by convincing the worlds largest supserpower to strangle its economy with dangerous and pointless "security" measures. Since September 11, 2001, I don't believe it anymore when I am told something is done for "security reasons". Since August 6, 2006 (temporary liquid ban is obviously not temporary), I don't want to fly anymore. Since Mahar Arrar (a Canadian citizen) was arrested  (on a stop-over in the states) and deported ot Siria for torture, I don't want to set foot in or overfly the US anymore. Since an innoncent electrician was shot in the head by police following the London Underground Bombings, I have been more concerned about being killed in police action than terrorist activity.

Assuming that bitcoin is commodity (that's also what I think is) has a big drawback: commodities can be taxed by VAT (or almost is what occours in a lot of country for the commodities): having all the transaction encumbered with a 20-22% of tax will kill almost instantly all the appeal bitcoin can have for the merchant. And also limits a lot the internation exchange of BTC (again moving commodities between borders can be regulated - you can't cross Italian-Swiss border to make an example with 10Kgs of gold without paying taxes).

There is no such thing as bitcoin, it doesn't exits. There is Bitcoin Network, Bitcoin Blockchain and Bitcoin Transaction, but bitcoin it self is nothing, zero, NOT DEFINED. When you transfer one bitcoin, you only send the message that one bitcoin was transfered, but it doesn't say anything about what bitcoin is. Same thing with blockchain it only stores transaction history. Therefore bitcoin is not money or commodity, because commodity is definitely not nothing. Does the idea that you trade USD for NOTHING scares you?

EDIT: it doesn't meat that court can't rule as it pleased, just that without entirely new regulations it would be nonsense.

Btw, isn't cryptography illegal in France if you don't own some weird special permission? I mean bitcoin contains quite a bit of cryptography.

Would anyone care to reply? thanks in advance

Well, this is pretty amazing. It's undoubtedly the first serious attempt by a government to regulate BTC, and as it's France it's going to strongly influence the currents in the EU if not the rest of the world. And of course, there are darker forces behind this attempt to regulate the market.

I don't buy the defense that bitcoin ≠ money, nor do I buy the defense that it's just a protocol. But I do think it's clearly a commodity. If Bitcoin wasn't worth money, there wouldn't be a whole lot of reasons for us to accept it as a gambling payment method, would there? But it's just a commodity -- we take it as barter and convert it in and out of currency. It's not a form of money in and of itself; it's a bridge, an e-currency, a store of value. A commodity holds its value indefinitely against fiat currencies, regulated only by supply and demand; as a limited resource, that's exactly what Bitcoin does. As a commodity, betting on it is just another speculative gamble against floating currencies. Does France stop its investors from buying pork bellies on the CME? Doubt it. What jurisdictional right would they have to do so? Under what law can France stop its citizens from paying a company in another jurisdiction to invest in a commodity on their behalf? Investing in Bitcoin isn't any different from investing in gold or copper or anything else with a limited supply. That's the way to approach it and to fight this thing.

I agree with your post overall, but not this part. Tux knows 100x more about his situation than anyone else in this thread, so to think you know better than him is arrogance. Big Time just expressed his less politely than you did ("you suck" vs "advice that Tux should take"). I'm all for making suggestions, but they should be phrased as such, and politely to boot.

What have you done to help Bitcoin? What are you building?

There are two kinds of people in this community: those who are doing to the work, and those who spend all their time arguing, speculating, and gossiping.

I don't mean to be rude, but the glowing support in this thread took me by surprise.  It is unwarranted, and Tux deserves a rebuke.  Tux:

First you royally screw up running your site and end the big rally by closing the exchange on which it was occuring while simultaneously leaking the emails and password hashes of practically every bitcoin user onto the public internet.  

Now, in the same quarter(!), you are royally screwing up a bitcoin court case of first impression by discussing the ongoing litigation informally in a public forum.  What law firm or lawyer advised you to come here and tell us all this information?  Isn't it bad enough that all your statements made in the past are going to be a part of the litigation, why oh why can you possibly think it is a good idea to continue making statements during the litigation.  

Instead, you should have started a legal defense fund from the very beginning, sought the help of the EFF (is there a french equivalent or sister organization?), and had some discussion about what firm/lawyer would best represent the interests of the community as a whole.  You probably would have been able to raise quite a bit of money for your case.  You also could benefit greatly from the guidance of older, wiser, more experienced businessmen and lawyers than yourself.  

Do you have any experience in business before running mtgox?  My guess: no!

Is this your first experience with a lawsuit, as a litigant?  My guess: yes!

Why a pseudo-socialist, nanny state, police state, big-government country like France, out of all the EU nations?  My guess: you're french!

Going this alone without seeking input from the bitcoin user base is nothing less than foolish arrogance.  You are not qualified to decide, for all of us, which court is most likely to grant a favorable ruling, and on which issues?  

The whole case seems ridiculous, as well.  You are trying to FORCE a specific bank to hold your money and perform banking functions?  That is completely against the spirit of capitalism and free enterprise.  I can't make any sense of your goal at all.  Besides screwing over bitcoin, presumably inadvertently, what could you possibly hope to accomplish?

I'm not  a native english speaker, so I might have swapped them around then... But then see my edit-added comment. If you technically don't even own the bitcoins you went through all that trouble for, then the masses won't want anything to do with it anyway.

But to stick to the wallet example. IRL... if I steal your wallet (not the .dat one, the real one), I technically posess it. It  is in my posession. But I don't legally own it, since it is stolen and you are still the rightful owner.

So with bitcoins, you do not posess them, because they are in the blockchain. But you have the right to do with them what you want,because you own them.

You are mistaking "owning" and "posessing". You don't posess your bitcoins, but you do own them.

And if not, then bitcoin is doomed anyway. It's hard enough to explain all of  this to non-nerds without having to add "but after all of that effort... you don't technically OWN anything though...".

@MagicalTux: this is a very exciting report! I've just reposted it on the Polish Bitcoin forum. Good luck in the court and please keep us informed.

Of course it will be judged to be a virtual currency. Because that is what it is. Even "official" bitcoin frontpage says so: "P2P Virtual Currency".

And lets be honest, we've seen this coming all along, right? We've been talking on these forums about the legal status of bitcoin and what it would mean when companies legally wanted to use bitcoin.
The criticasters have always said that it'd be virtually (pun intended) impossible to really work with bitcoins for tax, legal and official stuff.
The counterargument was always that bitcoin can not be regulated and that even if declared illegal it will still continue to exist and flourish. And it might. For drugs, porn, gambling and some niche stuff.
Not for the masses though, but again... we already knew that.

This is interesting and could have a major impact on the future of bitcoins and of course also on bitcoin prices.

Two questions:
1) What is the issue to become an official bank for MtGox? (apart from the costs, which could be covered also by investors) Forget about anonymity for the moment as well.
2) If MtGox dows not (want to) become a bank, we could engage with one existing bank or broker (i.e. CMCmarkets, igmarkets, swissquote, etc) to allow bitcoin trading. If this would be accepted, how difficult would it be to integrate bitcoin into their trading software and systems?

There are lots of places like this all over Europe. I have never been outside Europe so I can't speak for other continents, but if you make a eurotrip, these houses sometimes come in handy.

It's possible, I don't know the legal status of these. But I am pretty sure that they don't need to follow the same rules, don't need to pay the same fees and most definitely will not take years to create one.

The point of my comment was that I don't believe the issue to be as bad as MagicalTux implied. There are solutions to open an exchange other than become a bank. There are also other countries other than France in the SEPA zone. Even Romania, why not?

I think if bitcoin is to survive its value needs to be dictated by something other than fiat currency.

Why cant we base its value on the supply of orange juice? or maybe tuna fish?

Anything to keep the gooberment out of it.

Yes, that's true.

You don't own bitcoins. You own keys that allows you to give authorization to other people's key to use some coins. The coins really are in the blockchain, which is everywhere.

Speaking about wow gold and other mmo things, it's stated that ALL the mmo things are property of the software house. So every wow gold is property of Blizzard, no matter what. Of course if you are playing wow you can use them, but you can't go around and say "i OWN 100 wow gold"

As for bitcoin well we need them to treat it like gold