Can Bitcoins which are not money, be regulated by currency laws for exchanges?

ASICSRUS

member

Activity: 70

Merit: 10

Expert Computer Geek

Don't be fooled into thinking that the dollar is "physically backed" by anything more than your faith and trust in the United Stated. Dollars haven't been "backed" by anything physical for decades.

Roll Eyes

~~~backed by bullets and media! Cool

odolvlobo

legendary

Activity: 4466

Merit: 3391

I take a pragmatic approach. In the end, it doesn't matter how someone personally characterizes or classifies Bitcoin. You might still be able to do some legal gymnastics involving definitions and semantics where regulations surrounding Bitcoin are less well-defined, but that won't last long.

The U.S. government considers Bitcoin to be an "exchangeable virtual currency" and has decided that certain laws that apply to a "currency" also apply to Bitcoin. Most laws that I have seen in the U.S. define "money" in a way that excludes Bitcoin. So, I think it is fair to say that legally in the U.S Bitcoin is effectively a "currency", but it is not "money".

ASICSRUS

member

Activity: 70

Merit: 10

Expert Computer Geek

Quote from: bitrebel on June 13, 2011, 05:46:33 AM

All "currencies" in history have been backed by something tangible, or trust, usually something tangible combined with trust.

Bitcoin, being the world's first P2P "currency" is not actually a currency at all, but an agreed upon encrypted group of numbers that took some "energy" to produce, is limited in volume and thus promotes a sense of "trust". Nothing more, so don't be fooled into thinking it's a "currency" like the dollar is or any other physically backed "money"

All laws that pertain to money, including laws that took down E-Gold related to laws that dealt with actual money, currency laws, and securities, which are monetary backed units of account.

The only problem at all, is using the banks to buy and sell your bitcoins, but that should be legal, since you are not actually trading in "currencies" as an exchange. The regulators may try to get someone on something but it would have to be related to fraud, not the use of the bank to exchange currencies, and if no fraud was involved, then no crime, correct?

Can any bright attorneys or legal eagles help point this thread in the right direction, or am I correct in my assumption?

cold storage bitcoin specific cards and other physical btc/ltc demonstrate some interesting parallels to many other forms of currency! Cool

bitrebel

sr. member

Activity: 364

Merit: 251

All "currencies" in history have been backed by something tangible, or trust, usually something tangible combined with trust.

Bitcoin, being the world's first P2P "currency" is not actually a currency at all, but an agreed upon encrypted group of numbers that took some "energy" to produce, is limited in volume and thus promotes a sense of "trust". Nothing more, so don't be fooled into thinking it's a "currency" like the dollar is or any other physically backed "money"

All laws that pertain to money, including laws that took down E-Gold related to laws that dealt with actual money, currency laws, and securities, which are monetary backed units of account.

The only problem at all, is using the banks to buy and sell your bitcoins, but that should be legal, since you are not actually trading in "currencies" as an exchange. The regulators may try to get someone on something but it would have to be related to fraud, not the use of the bank to exchange currencies, and if no fraud was involved, then no crime, correct?

Can any bright attorneys or legal eagles help point this thread in the right direction, or am I correct in my assumption?

awozny

member

Activity: 75

Merit: 10

What does the number of posts have any bearing on the validity of a persons comments? Many people here are professionals and have lots to offer. When some kid can post hundreds of times really saying nothing of importance, hard to see how the number of posts is a judgement on credibility. Reputation maybe ...but that is not the same thing.

bitrebel

sr. member

Activity: 364

Merit: 251

I would imagine, that Bitcoins are not and cannot be classified legally as a currency.
If they cannot be, legally, considered a currency, then no currency laws can be applied to them.

Simple!

How can you call a seashell "currency" just because a community decides to adopt seashells to trade between each other, and someone is selling seashells for dollars?

The fact remains the seashells remain seashells and not dollars.

Actually, come to think of it, if the bankers ever decide to try to take out Bitcoins through economic regulations with currency laws, it will be a sincere challenge for them to define "money" and how Bitcoins can be called "Money" more than seashells could be.

aral

newbie

Activity: 42

Merit: 0

Why am I trapped in the newbie section having to read people coming on here with 6 posts saying "Listen up guys, what bitcoin needs is credibility"?

Sad

awozny

member

Activity: 75

Merit: 10

I think we all want to agree that Bitcoins are a great idea. What it currently lacks is credibility. In my humble opinion some regulation of this new currency would be a good thing. It would give a much needed boost in credibility that it currently lacks...Geez one of the biggest news reports I recently heard about was buying illegal drugs with bitcoins. Regulation if done correctly (and that is the rub) would help. It should never fall under a central authority and NEVER be allowed to be loaned at interest to anyone.

Nothing actually backs the USD. It is a fiat (by decree) currency. It was once backed by gold but no more. I do not know if bitcoins would qualify as property as you suggested. No one buys bitcoins for the sake of having bitcoins. Bitcoins are just an idea...an encrypted file. You are free to open an exchange if you like..but free market forces would dictate your policy. Not sure if there has been any precedent setting cases regarding bitcoins to know how a district attorney would act.. sooner or later we will find out..

Peace.

bitrebel

sr. member

Activity: 364

Merit: 251

I've studied monetary laws to a degree, and they are usually very specific.
If bitcoin is a series of encrypted numbers, and nothing is actually backing them, and there is no central authority or location, then can they really be controlled with monetary policy or regulations for exchanges?

For instance, say I want to open an exchange and use my bank account. No DA can say I was trading money in an exchange, they can only say I bought and sold property, correct?

Topic: Can Bitcoins which are not money, be regulated by currency laws for exchanges? (Read 972 times)