Topic: Bitcoins are not "legalized" in the US - understanding FinCEN's announcement (Read 5448 times)

qft

Fixed to "not legalized", since that was the intention of the post. Whether or not they are considered "legal" as long as they haven't been outlawed is up to whoever to decide. I'm just saying that they haven't been declared legal as many seemed to gather from the announcement.

Just use "Bitcoin are not regulated in the US" the phrase shows ambiguity and the way you understand it is not the way I understood it and that shows that is misleading to say the least, especially if you have to ask the "natives" to validate your statement.

i think "legal" in this context mean: does the us gov puts regulation on it. NOT if its illegal (or the opposit).
please natives: correct me

"Bitcoins are not "legal" in the US"

Bitcoins are perfectly legal in the US, as a matter of fact, the FinCEN statement does not say anything about decentralized currencies being illegal, all it says is that money transmitters should register their activities with them.

Bitcoins are perfectly legal in the US and all over the world. <--- this is a fact as of today.

How so?

Litecoin is about to become a botnet haven, as additional ASIC hashpower comes online.

please change the title of this post. It's missleading and wrong

The only "illegal" part going on if fincen's statement does gain permanency by some means is that people who buy/sell "decentralized currency" for fiat currency of any kind in the U.S. are classified as "money transmitters" meaning those traders need to follow regulations in that business category (which I'm willing to bet that 99% or more traders are not licensed as money transmitters.... yet....  this could be a good thing for bitcoin though if it goes the way of brokered trading, in that average joe gives there fiat/btc to a broker who sells/trades on their behalf and returns the proceeds thus shielding the average joe from money transmitter regulations and having a profitable business of their own in doing this, compliance is achieved and the system looks a whole lot cleaner/familiar to John Q. Public overall).  All other uses of "decentralized currency" by standard users (i.e. not a Money business like exchange, or business selling goods/services both of these would fall under standard business or money business laws accordingly), such as buying goods etc. are not illegal, although the expectation may still be that appropriate sales taxes etc. is collected on the traded goods/services as with standard transaction.

Still there's really little technical difference between the coins.  I straddle both BTC and LTC communities and I suspect I'm not alone.
I honestly don't think there is a "Litecoin community" versus a "Bitcoin community".  There *is* an electronic currency community.

Simple. I have seen more innovators in the litecoin community than bitcoin.

Bitcoin = paranoid survivalist
Litecoin = prepared thrivalist

I really dont understand what this mean to the bitcoin community..

What i understand, that they want to make the whole bitcoin trading more save?
For me, as a consumer i dont care about this regulations or?
Its just for Trading PLattforms like MtGox, which now have to follow stronger rules?

Why wouldn't LTC suffer from the same (perceived) hoarding problem?  People are people and the technological basis of the 2 coins is essentially the same.

+1
keyword: guidance

the only way past this point, is for the idiot hoarders to start building services that the public can relate to (sorry your Indian Head coins do not make any sense to the Macaroni and Cheese sector).

otherwise, Bitcoin is dead. Litecoin will replace it.

Your argument is specious at best.  One could apply the same logic to possessing child pornography by saying "They're just computer files with 1's and 0's in them so how can they be legal or illegal?"

Governments can declare anything they want legal or illegal through whatever legislative process they have.  Could the declaration be silly and unenforceable?  Of course.  That being said, the govt could still throw a big damper on BTC and drive it back underground where it started (Silk Road, etc)

The easiest government attack on BTC is to ban exchanging it for fiat currencies like USD.  Another easily enforced attack would be to declare it illegal for use as payment by stores.  Imagine a time in a few years where BTC has become more widely accepted to the point where Amazon accepts it.  This situation might cause concern for the US govt.  If mainstream online and brick-and-mortar stores were to be banned from accepting BTC (easily enforceable) it would effectively shut down BTC.

Activities like mining BTC, possessing BTC, exchanging BTC for goods and services between individuals couldn't really be banned at least not enforceably.
But nonetheless BTC would be driven back into the shadows.

I see in movies all the time, cash is exchanged in-person with a very valuable item(s). Usually this is some giant drug deal, or some high tech stolen equipment, or a bag of diamonds.

In the age of bitcoin, they can use bitcoin to buy or sell the same item. The prior in-person exchange sort of disappears. To "convert" the bitcoin to USD or vice versa, another in-person deal is done, this time with a laptop with internet and someone else with a piece of paper with a QR bar code on it. The transaction is done, it is seen in seconds, it is confirmed in 10 minutes with the first block, and after an hour it is practically irreversibly confirmed.

Even for extremely high value items or cash-to-bitcoin trades, both sides can wait even just the 10 or 20 minutes, and in this fantasy scenario, both sides are armed to the teeth and only the two geeks (bitcoin savvy and smart computer person) on the table are actually talking. Their personal laptops or mobile devices are heavily encrypted to prevent theft, and their 10 bodyguards with submachine guns on both sides prevent dishonor among thieves.

It can even be done remotely by each group having their own full node responding to authorization by the boss on the meeting via phone call or text message. The actual bitcoin transaction is done inside the building far far away and broadcast to the network.

Guidance statements give an indication of how an agency interprets the law.  Until there's a test case, their interpretation remains unchallenged.  You're not going to find many Bitcoin enterprises which can afford to mount a legal challenge if FinCEN tries to slap them with tens of millions of dollars in fines - even huge conventional financial institutions tend to agree to civil forfeiture because the potential penalties per offence are absolutely massive.

Additionally, operating as an unlicensed money transmitter carries with it the potential for criminal prosecution (carrying a penalty of up to 5 years in prison). 

It's tempting to believe that the authorities have bigger fish to fry and that they wouldn't waste their time on small players, but that can't be guaranteed.

Generally speaking, agencies that provide guidance, lay the ground for law makers.

They act much like lobby groups but for a government perspective.

The report from the ECB did something similar for EU governments with their report on virtual currencies.

Its answering these reports at this time that helps guide the laws when they do come in.  While the nature of bitcoin is that its supporters wants nothing to do with governments, politics generally prevents this course of action from being effective.

We certainly live in interesting times!

Yup. I'm glad I could help clear it up a little. These forums tend to be very dramatic lately.