Topic: BitPay is officially now an exchange and no longer just a payment provider. - page 5. (Read 7058 times)
November 01, 2014, 02:05:30 AM
They are essentially a one way exchange in that anyone can open a merchant services account with bitpay, the customer can price something at the amount of bitcoin they wish to sell, then use their own bitcoin to pay for the sale. This would be very similar to how a merchant could potentially swipe their own credit card at their own CC terminal
October 31, 2014, 04:34:52 PM
The FTC froze ~$1.2M USD in BFL's bank account: http://ia902308.us.archive.org/32/items/gov.uscourts.mowd.117531/gov.uscourts.mowd.117531.23.0.pdf
Let's see if the cash adds up, shall we? Skip to the end of this post to find out and check my maths, otherwise enjoy the screenshots that I've put so much effort into for your viewing pleasure.
http://www.walletexplorer.com/address/1LBEfBCDrwQyxL4yGxZ14Y3uZ37UdBEzK5
https://blockchain.info/address/1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs
$671,385 USD (1500 BTC) on 2014-09-17 20:17:27 (less than 24 hours prior to the FTC on BFL)
$1,188,650 USD (2500 BTC) on 2014-09-10 01:15:24
$1,219,950 USD (2500 BTC) on 2014-09-04 20:41:25
$765,780 USD (1500 BTC) on 2014-08-26 21:14:52
$1,206,606 USD (2300 BTC) on 2014-08-21 17:57:45
$496,000 USD (1000 BTC) on 2014-08-15 19:10:14
$293,032 USD (499 BTC) on 2014-08-07 18:03:04
I only screenshot the 1LBEfBCDrwQyxL4yGxZ14Y3uZ37UdBEzK5 BWA, a known BitPay BWA, ignoring the other addresses surpassing $2M USD that BF Labs Inc. liquidated during the same time period, ALSO along with the millions of dollars liquidated prior to the last tx depicted above, thus only checking if the sum in BFL's bank account is close to what was converted to fiat approximately a month prior to the FTC raid forward. Please, I beg you, check my maths, for I've been known to error.
$671,385
$1,188,650
$1,219,950
$765,780
$1,206,606
$496,000
$293,032
$1.2M(+change)
Well, that was a total waste of time! The figures add up and most every penny/satoshi is accounted for. I would have sworn that the figure would've been $5,841,403 thus providing an argument for money laundering on BFL's part, but guess I was mistaken. Apologies!
#ASKFTC
Quote
2. On or about September 19, 2014, BFL’s bank account with BMO Harris Bank N.A. (“BMO Account”) was frozen, along with other assets. The BMO Account contains
approximately $1.2 million.
approximately $1.2 million.
Let's see if the cash adds up, shall we? Skip to the end of this post to find out and check my maths, otherwise enjoy the screenshots that I've put so much effort into for your viewing pleasure.
http://www.walletexplorer.com/address/1LBEfBCDrwQyxL4yGxZ14Y3uZ37UdBEzK5
https://blockchain.info/address/1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs
$671,385 USD (1500 BTC) on 2014-09-17 20:17:27 (less than 24 hours prior to the FTC on BFL)
$1,188,650 USD (2500 BTC) on 2014-09-10 01:15:24
$1,219,950 USD (2500 BTC) on 2014-09-04 20:41:25
$765,780 USD (1500 BTC) on 2014-08-26 21:14:52
$1,206,606 USD (2300 BTC) on 2014-08-21 17:57:45
$496,000 USD (1000 BTC) on 2014-08-15 19:10:14
$293,032 USD (499 BTC) on 2014-08-07 18:03:04
I only screenshot the 1LBEfBCDrwQyxL4yGxZ14Y3uZ37UdBEzK5 BWA, a known BitPay BWA, ignoring the other addresses surpassing $2M USD that BF Labs Inc. liquidated during the same time period, ALSO along with the millions of dollars liquidated prior to the last tx depicted above, thus only checking if the sum in BFL's bank account is close to what was converted to fiat approximately a month prior to the FTC raid forward. Please, I beg you, check my maths, for I've been known to error.
$671,385
$1,188,650
$1,219,950
$765,780
$1,206,606
$496,000
$293,032
$1.2M(+change)
Well, that was a total waste of time! The figures add up and most every penny/satoshi is accounted for. I would have sworn that the figure would've been $5,841,403 thus providing an argument for money laundering on BFL's part, but guess I was mistaken. Apologies!
#ASKFTC
October 31, 2014, 10:21:21 AM
Now I don't know what to believe. here people talking about special edition BTC community, elsewhere people thinking about never to use BTC again.
October 31, 2014, 04:06:30 AM
http://www.csbs.org/regulatory/ep/Documents/EPTF%20Hearing%20Panel%203.pdf
Sonny Vleisides' BF Labs Inc. used BitPay as their private exchange.
BFL used BitPay as a bank.
Sonny Vleisides thought he was clever when he thought he could really get away with bypassing BitPay's stick KYC policy.
The 1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs BWA truly belongs to BFL and NOT HashTrade as was demonstrated to the world in this infamous press release - BF Labs, Inc. Processes $1 Million Bitcoin Merchant Transaction for Institutional Bitcoin Mining Hardware Purchase - first mentioned by me a year ago to the day: http://www.prweb.com/releases/2013/10/prweb11283333.htm
Josh Zerlan has never once called me out as a liar each and every time I've mentioned this.
#ASKFTC
Quote
BitPay was formed in May of 2011, so that has been operating for three years, which makes us pretty old in this space today. During this time we've acquired over 30,000 merchants to accept bitcoin with our service. Our merchants include small, medium, and large sized businesses in every state who accept bitcoin side-by-side with credit cards as a form of payment. At BitPay, our role in the bitcoin ecosystem is very close to that of a traditional merchant-acquirer in the credit card space. Our software helps merchants clear and settle payments, transactions rather, over the bitcoin network.
BitPay is not an exchange. BitPay is not a bitcoin bank. We do not have any consumer facing services. Consumers have no risk of loss from our service. BitPay is committed to being a good corporate citizen. We employ a strict KYC policy to protect against money laundering. Our KYC policy follows the best practices of traditional merchant acquirers.
We need to know who our merchants are and what they're selling. We only want the good actors on our platform.
Bitcoin does have risks as other forms of payments do. Criminals use cellphones, email US
dollars, and banks. BitPay shares the tasks force policy goals to protect consumers from fraud
and money launderers, keeping money launderers away from our business.
We implement a risk-based approach for merchant acquisition as recommended by FinCen BSA,
and the Patriot Act. This approach provides increased CIP in KYC due diligence as the
merchant's daily sales volumes increase.
BitPay is not an exchange. BitPay is not a bitcoin bank. We do not have any consumer facing services. Consumers have no risk of loss from our service. BitPay is committed to being a good corporate citizen. We employ a strict KYC policy to protect against money laundering. Our KYC policy follows the best practices of traditional merchant acquirers.
We need to know who our merchants are and what they're selling. We only want the good actors on our platform.
Bitcoin does have risks as other forms of payments do. Criminals use cellphones, email US
dollars, and banks. BitPay shares the tasks force policy goals to protect consumers from fraud
and money launderers, keeping money launderers away from our business.
We implement a risk-based approach for merchant acquisition as recommended by FinCen BSA,
and the Patriot Act. This approach provides increased CIP in KYC due diligence as the
merchant's daily sales volumes increase.
Sonny Vleisides' BF Labs Inc. used BitPay as their private exchange.
BFL used BitPay as a bank.
Sonny Vleisides thought he was clever when he thought he could really get away with bypassing BitPay's stick KYC policy.
The 1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs BWA truly belongs to BFL and NOT HashTrade as was demonstrated to the world in this infamous press release - BF Labs, Inc. Processes $1 Million Bitcoin Merchant Transaction for Institutional Bitcoin Mining Hardware Purchase - first mentioned by me a year ago to the day: http://www.prweb.com/releases/2013/10/prweb11283333.htm
Quote
Overland Park, KS (PRWEB) October 31, 2013
Josh Zerlan has never once called me out as a liar each and every time I've mentioned this.
#ASKFTC
October 31, 2014, 02:10:35 AM
I'm too lazy to figure out what you are ranting and raving about this time, but I don't see why BFL selling bitcoins to Bitpay would be considered illegal or fraudulent. Merchants exchange bitcoins to fiat through Bitpay all the time. Why can't BFL? Those TOS that you quoted may apply to you, but they don't have to apply to everyone.
1500 BTC: https://blockchain.info/tx/03e15e056bc367222c96ec2a840f36028a2fca5c4e9fa1247bf4e2da3ca90c86
2000 BTC: https://blockchain.info/tx/c9b267bfef483c23032002a206ff8067d80688496afb4d12d61fb4918a5df7f4
2300 BTC: https://blockchain.info/tx/7ab6e12411370990ccfaaebd037a3f5d9cd1b374c8d283b902c85c9256d797bc
1000 BTC: https://blockchain.info/tx/b8051afcfcc5778b1f871c7c81358e38b13688d76847956d907ac69295ea5761
500 BTC: https://blockchain.info/tx/2f73b5f120d87c10cb7be68b2a711fbb82122df5d8c799740217a8518b8a17ef
1700 BTC: https://blockchain.info/tx/a2acd03f700af1111c102c4d43a5aaccfe9bc98fb634df71cd60d7ddca1ea777
800 BTC: https://blockchain.info/tx/ff2805f515a6b5e35dbc972056dcad841835ddff97eb9fafe5022bd2fdea1741
And, the granddaddy of them all...
5,562.354 BTC ($1,000,000 USD via HashTrade MY ASS!): https://blockchain.info/tx/1b6ea350c094071412df1f801651263fd65ffa0b89ad6c8626ceeca8755f50bc
All the transactions above was BFL using BitPay to covert BTC to fiat to be deposited into their bank account using their 1QAHVyRzkmD4j1pU5W89htZ3c6D6E7iWDs BWA pretending they're all for purchases of some types.
If such a practice is legal, then BitPay would surely have included said practice of such on their website, but they can't, hence don't, hence the legal disclaimer.
Quote
We are a Bitcoin payment processor—we enable you to accept Bitcoins as payment for goods or services, and process Bitcoin payments that you receive from your customers. We are not a Bitcoin exchange, Bitcoin wallet, or a place to purchase Bitcoin. By using the Services, you authorize us to receive, hold and disburse funds on your behalf and to take any and all actions that we think are necessary or desirable to provide the Services and to comply with applicable law.
But, Sonny Vleisides always seems to think that he's above the law and can do what the fuck he pleases, going as far as sticking it up his probation officer's ass with three fuckin' big lies that I can prove, but lucky for him she bought them... up to the date of the raid forward, that is. Now she knows that a ~$1K webside is NOT worth $2M USD, among other things, that Sonny Vleisides is on record in stating was worth. Here's that site: http://web.archive.org/web/*/dealerhound.com.
#ASKFTC
October 31, 2014, 01:39:01 AM
I'm too lazy to figure out what you are ranting and raving about this time, but I don't see why BFL selling bitcoins to Bitpay would be considered illegal or fraudulent. Merchants exchange bitcoins to fiat through Bitpay all the time. Why can't BFL? Those TOS that you quoted may apply to you, but they don't have to apply to everyone.
https://bitpay.com/legal#limitation-of-liability
Quote
1. The Services
We are a Bitcoin payment processor—we enable you to accept Bitcoins as payment for goods or services, and process Bitcoin payments that you receive from your customers. We are not a Bitcoin exchange, Bitcoin wallet, or a place to purchase Bitcoin. By using the Services, you authorize us to receive, hold and disburse funds on your behalf and to take any and all actions that we think are necessary or desirable to provide the Services and to comply with applicable law.
We are a Bitcoin payment processor—we enable you to accept Bitcoins as payment for goods or services, and process Bitcoin payments that you receive from your customers. We are not a Bitcoin exchange, Bitcoin wallet, or a place to purchase Bitcoin. By using the Services, you authorize us to receive, hold and disburse funds on your behalf and to take any and all actions that we think are necessary or desirable to provide the Services and to comply with applicable law.
http://blog.bitpay.com/2013/03/23/how-fincen-guidelines-affect-bitpay.html
Quote
We have received numerous industry and press inquiries as to how the March 18 Guidance from FinCEN regarding virtual currencies would affect BitPay.
FinCEN’s guidance that “virtual currency” is a type of money and should be treated like “real currency” is a step in the right direction. We have always worked under the impression that virtual currency is money, so we are glad that FinCEN now agrees with that position.
The heart of FinCEN’s guidance recommends that activities which are classified as Money Services Businesses (MSB) or Money Transmission Businesses (MTB) should be applied equally to both real currency and virtual currency. Therefore activities such as remittance, payroll, and check cashing would be regulated whether the type of money is real or virtual.
We should pay close attention to footnote #10 of the guidance, which states:
10 FinCEN’s regulations provide that whether a person is a money transmitter is a matter of facts and circumstances. The regulations identify six circumstances under which a person is not a money transmitter, despite accepting and transmitting currency, funds, or value that substitutes for currency. 31 CFR § 1010.100(ff)(5)(ii)(A)-(F).
Looking up the six exemption circumstances in 31 CFR § 1010.100(ff)(5) will return the following:
(ii) Facts and circumstances; Limitations. Whether a person is a money transmitter as described in this section is a matter of facts and circumstances. The term “money transmitter” shall not include a person that only: (A) Provides the delivery, communication, or network access services used by a money transmitter to support money transmission services;
(B) 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;
(C) Operates a clearance and settlement system or otherwise acts as an intermediary solely between BSA regulated institutions. This includes but is not limited to the Fedwire system, electronic funds transfer networks, certain registered clearing agencies regulated by the Securities and Exchange Commission (“SEC”), and derivatives clearing organizations, or other clearinghouse arrangements established by a financial agency or institution;
(D) Physically transports currency, other monetary instruments, other commercial paper, or other value that substitutes for currency as a person primarily engaged in such business, such as an armored car, from one person to the same person at another location or to an account belonging to the same person at a financial institution, provided that the person engaged in physical transportation has no more than a custodial interest in the currency, other monetary instruments, other commercial paper, or other value at any point during the transportation;
(E) Provides prepaid access; or
(F) Accepts and transmits funds only integral to the sale of goods or the provision of services, other than money transmission services, by the person who is accepting and transmitting the funds.
We have highlighted exemptions (B) and (F) which describe the activities performed by BitPay. The IRS has defined rules for classifying Payment Processors, or Payment Settlement Entities (PSE) in 2008 with the Internal Revenue Code 6050W. This ruling and others clearly state that Payment Processors and Payment Settlement Entities are not Money Transmitters.
BitPay has a contractual agreement with our sellers for transaction processing, clearance, and settlement of funds that arrive for a given merchant account. BitPay does not have any contractual agreement with any sender of funds, and does not engage in any activities that would be considered Money Transmission activities.
BitPay has voluntarily registered with FinCEN in 2011, so that we have an online account to electronically report any suspicious activity that may arise. However, to date we have not seen any suspicious activity and have not filed any reports. All of our merchants are identified and we know their bank account information, so there is little likelihood for someone engaging in criminal activity to use our service.
On a side note, FinCEN may want to get clarification from Ben Bernanke, who says that gold is not money.
FinCEN’s guidance that “virtual currency” is a type of money and should be treated like “real currency” is a step in the right direction. We have always worked under the impression that virtual currency is money, so we are glad that FinCEN now agrees with that position.
The heart of FinCEN’s guidance recommends that activities which are classified as Money Services Businesses (MSB) or Money Transmission Businesses (MTB) should be applied equally to both real currency and virtual currency. Therefore activities such as remittance, payroll, and check cashing would be regulated whether the type of money is real or virtual.
We should pay close attention to footnote #10 of the guidance, which states:
10 FinCEN’s regulations provide that whether a person is a money transmitter is a matter of facts and circumstances. The regulations identify six circumstances under which a person is not a money transmitter, despite accepting and transmitting currency, funds, or value that substitutes for currency. 31 CFR § 1010.100(ff)(5)(ii)(A)-(F).
Looking up the six exemption circumstances in 31 CFR § 1010.100(ff)(5) will return the following:
(ii) Facts and circumstances; Limitations. Whether a person is a money transmitter as described in this section is a matter of facts and circumstances. The term “money transmitter” shall not include a person that only: (A) Provides the delivery, communication, or network access services used by a money transmitter to support money transmission services;
(B) 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;
(C) Operates a clearance and settlement system or otherwise acts as an intermediary solely between BSA regulated institutions. This includes but is not limited to the Fedwire system, electronic funds transfer networks, certain registered clearing agencies regulated by the Securities and Exchange Commission (“SEC”), and derivatives clearing organizations, or other clearinghouse arrangements established by a financial agency or institution;
(D) Physically transports currency, other monetary instruments, other commercial paper, or other value that substitutes for currency as a person primarily engaged in such business, such as an armored car, from one person to the same person at another location or to an account belonging to the same person at a financial institution, provided that the person engaged in physical transportation has no more than a custodial interest in the currency, other monetary instruments, other commercial paper, or other value at any point during the transportation;
(E) Provides prepaid access; or
(F) Accepts and transmits funds only integral to the sale of goods or the provision of services, other than money transmission services, by the person who is accepting and transmitting the funds.
We have highlighted exemptions (B) and (F) which describe the activities performed by BitPay. The IRS has defined rules for classifying Payment Processors, or Payment Settlement Entities (PSE) in 2008 with the Internal Revenue Code 6050W. This ruling and others clearly state that Payment Processors and Payment Settlement Entities are not Money Transmitters.
BitPay has a contractual agreement with our sellers for transaction processing, clearance, and settlement of funds that arrive for a given merchant account. BitPay does not have any contractual agreement with any sender of funds, and does not engage in any activities that would be considered Money Transmission activities.
BitPay has voluntarily registered with FinCEN in 2011, so that we have an online account to electronically report any suspicious activity that may arise. However, to date we have not seen any suspicious activity and have not filed any reports. All of our merchants are identified and we know their bank account information, so there is little likelihood for someone engaging in criminal activity to use our service.
On a side note, FinCEN may want to get clarification from Ben Bernanke, who says that gold is not money.
Thank you, odolvlobo, for playing. But, if you want to continue to play, be forewarn I have an ace up my sleeve: http://www.coindesk.com/former-sec-chair-takes-advisory-roles-bitpay-vaurum/
#ASKFTC
October 31, 2014, 01:07:37 AM
phin, you do realise that bitcoin is meant to be financial freedom. would you like it if a company refuses to send money to your bank account purely because of speculation. (meaning in a world of innocent till proven guilty in a court, its speculation till a judge makes judgement)
although i hate BFL as much as you, lets put BFL aside and treat what im about to say as a general note about monetary freedom ideals, unless there is a court order to freeze funds the ideal of bitcoin is not to stop transactions. thus because there was no court order to stop transactions, there should be no reason to freeze accounts or stop payments.
so would you prefer a world where i can get your bank to stop doing wire transfers, or force visa/western union/ paypal to not do business with you purely because there is a complaint that you may have sent goods later then promised. or would you prefer these third party services to only freeze funds with proper authorization.
bitpay should not freeze anyones funds without a court order.. even if they are scammy a-holes like BFL.
the issue is not that bitpay is doing anything bad, but the fact that when people want financial freedoms, they need to take extra care and responsibility for funds and if they want some third party to do something, not to expect it to happen automatically.
what should happen is that when there are customer issues. customers dont bitch and moan on forums. but instead they go to court and put a lien on the company and get a court to freeze funds. then send that request too bitpay so they are informed.
although i hate BFL as much as you, lets put BFL aside and treat what im about to say as a general note about monetary freedom ideals, unless there is a court order to freeze funds the ideal of bitcoin is not to stop transactions. thus because there was no court order to stop transactions, there should be no reason to freeze accounts or stop payments.
so would you prefer a world where i can get your bank to stop doing wire transfers, or force visa/western union/ paypal to not do business with you purely because there is a complaint that you may have sent goods later then promised. or would you prefer these third party services to only freeze funds with proper authorization.
bitpay should not freeze anyones funds without a court order.. even if they are scammy a-holes like BFL.
the issue is not that bitpay is doing anything bad, but the fact that when people want financial freedoms, they need to take extra care and responsibility for funds and if they want some third party to do something, not to expect it to happen automatically.
what should happen is that when there are customer issues. customers dont bitch and moan on forums. but instead they go to court and put a lien on the company and get a court to freeze funds. then send that request too bitpay so they are informed.
October 31, 2014, 12:58:49 AM
I realized that I made a grave error in my assessment thanks to a Bitcoiner much wiser than I setting me straight.
I'm too lazy to figure out what you are ranting and raving about this time, but I don't see why BFL selling bitcoins to Bitpay would be considered illegal or fraudulent. Merchants exchange bitcoins to fiat through Bitpay all the time. Why can't BFL? Those TOS that you quoted may apply to you, but they don't have to apply to everyone.
BitPay will covert anybody's BTC to fiat as long as you have a bank account. No questions asked and for any amount.
#ASKFTC
BFL is using BitPay as an exchange to convert their BTC to fiat and deposited into their bank oppose to only using them as a payment service provider of which that is all BitPay is, again, not an exchange.
You can't do! I can't do it! Yet, BFL has converted millions via BitPay. I just found three other BFL BWAs that have used BitPay to convert their BTC to fiat. BFL has been sooooo NAUGHTY!
Where's the fuckin' media on this?
#ASKFTC
You can't do! I can't do it! Yet, BFL has converted millions via BitPay. I just found three other BFL BWAs that have used BitPay to convert their BTC to fiat. BFL has been sooooo NAUGHTY!
Where's the fuckin' media on this?
#ASKFTC
I'm too lazy to figure out what you are ranting and raving about this time, but I don't see why BFL selling bitcoins to Bitpay would be considered illegal or fraudulent. Merchants exchange bitcoins to fiat through Bitpay all the time. Why can't BFL? Those TOS that you quoted may apply to you, but they don't have to apply to everyone.
BitPay will covert anybody's BTC to fiat as long as you have a bank account. No questions asked and for any amount.
#ASKFTC
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