It's important to have the correct mindset when going into this. Don't ever believe that there really are rational rules out there somewhere and that it is possible to follow them and avoid all harassment. You can do everything perfectly, and still encounter a lot of bullshit.
Regardless, you have an absolute right to trade. Full stop. Everything else, the regulations, the taxes, the restrictions, is voluntary.
Further, the US government has zero jurisdiction over trade. They can only regulate commerce. It's right in the Constitution.
So what they will try to do, in these instances, is try to trick you into turning your trade into commerce. That can happen in dozens of ways. But it always involves the introduction of a third party and some kind of conditional binding agreement that you voluntarily agree to.
If you put your Bitcoins on your taxes, guess what? You've voluntarily introduced a third party.
If you register a Bitcoin business or sign up for a bit-license, guess what? You've voluntarily introduced a third party.
If you have an agreement with a Bitcoin ATM manufacturer that you will "operate" the ATM using his exchange services, guess what? You've voluntarily introduced a third party.
So, here's what you need to do in order to
trade Bitcoins. You hand over x Bitcoins; you get y of whatever (Paypal-bux, Federal Reserve Notes, etc) in return.
That's it.
The moment that the other party starts talking about "I'm going to do this" or "I'm going to do that" with whatever you trade him, that's an attempt to turn voluntary trade into a binding commercial agreement. The government will argue that, by continuing, you entered a commercial agreement with the other party and are therefore responsible for whatever idiotic things they told you they were going to do.
Yes, it's ridiculous. But that's what they really think.
That's the basis of their jurisdiction. It's the reason that every one of these actions includes the phrase "affecting inter-state commerce."
It all stems from an idiotic Supreme Court case,
Wickard v. Filburn. Filburn was a farmer who
voluntarily signed up to receive government subsidies on his wheat crop. From that point onward, the government argued that all of the wheat he produced, even for his own consumption, was bound by commercial agreement and subject to whatever regulations it wanted to impose on them. And, incredibly, a bought-off Supreme Court agreed.
So, the way to avoid problems with trading on LocalBitcoins is that, whenever the other party starts saying "I'm going to do this" or "I'm going to do that" with whatever you trade them, just cancel the trade and walk away. At the very least, if you have to continue, make it clear in no uncertain terms that whatever they do is their business, and that you are just engaged in trade. You aren't their "partner". You aren't a "corporation". You aren't a "dealer". You aren't an "exchange". You're an individual engaged in trade.This entire situation is disturbing on so many levels: so much so that I registered this new btctalk account solely to post in this thread alone, knowing that it's likely being monitored by over-zealous prosecutors all around the country.
But HOW pathetic IS that? That we in the Land Of The Free have to THINK this way? Srsly WTF?
Anyway, I wanted to quote the above info re: "trade" versus "commerce" because Benjamin's info seems to have been totally overlooked as this thread has progressed.
But IF this info is really true (?), if it's simply trade vs commerce, then how could LBC vendors best use this fact (?) to protect themselves?
Should they put it in some kind of legal-disclaimer text on their LBC ad listing, or maybe print it out and hand a copy on paper to all potential trade partners in-person, BEFORE proceeding with any exchange of money/value for bitcoins?
Would something like that work? Would it be sufficient protection?
Or is it all just some BS smoke-screen?
What do you guys think?
KEVIN
