Topic: CFTC Swap laws and international trading and entities for btc (Read 149 times)

You do know that what they just prohibit are American citizens right? If I'm right there is no one prohibiting you to use their services under a corporation which is identified as a juridical entity, even if its owned by American citizens it's identity as a sole company exempts them from this kind of prohibitions. That's how corporation laws works and I think for you to have a more professional legal help you must ask for a real legal assistance in one of your local firms.

i didn't realize it either but tbh i never read the fine print. they've been posting a warning at the top of all pages for ages now when you access bitmex from an american IP. it says "residents" but nothing about citizens. so this was news to me as well.

there are lots of american traders on bitmex, there's no doubt about that. i personally know nearly a dozen.

bitfinex allows some USA residents even without ECP status. if "established or organized outside of the United States or its territorial or insular possessions" then bitfinex may "at its sole discretion" allow you to trade there: https://support.bitfinex.com/hc/en-us/articles/115003461254-US-Residents-Frequently-Asked-Questions

but this is just margin trading and p2p lending. plus you'd have to use bitfinex (yuck) and leverage maxes out at 3.3x.

wow the tos on bitmex say that. That is surreal I almost wonder if they changed it. I could have sworn that it was a resident ban and not a citizen ban for like ages. Even the forex exchanges offshore don't always necessarily discriminate against citizens that are expats with foreign banks. wow. just wow.

I double checked with some guys and they said the UK/EU/AU won't accept foreign corporations owned by us citizens unless they have ECP status. But some international companies will (probably aren't suppose to). apparently even a individual person's LLC is an affiliate conduit or a subsidiary....yeah total crap.

I can't be the only one. There are probably thousands of thousands of traders from America using VPN. The real economic value is god only knows. Apparently they are oblivious to what's coming....

I guess bitmex and deribit aren't taking any chances so they banned citizens too....I swear they changed the wording because I don't remember that part at all.

If you want to trade on platforms like BitMEX or Deribit, you can't be a US citizen. It's a violation of their terms of service:

My reading is the same as yours regarding the CFTC definition of "US person." It doesn't appear to extend to citizens, only residents.

There may be some issues with your desire to remain an American resident, though. How exactly are you planning to engage in swaps? Regarding point (vi) if it applies, due diligence on your counterparties may be required to ensure you aren't engaging with US persons.

  Upon the expiration of this definition on October 9, 2013, the “U.S. person” definition set forth in the Final Guidance will apply.  The Final Guidance provides that the CFTC will interpret the term “U.S. person” generally to include, but not be limited to:

(i)        any natural person who is a resident of the United States;

(ii)       any estate of a decedent who was a resident of the United States at the time of death;

(iii)      any corporation, partnership, limited liability company, business or other trust, association, joint-stock company, fund or any form of enterprise similar to any of the foregoing (other than an entity described in prongs (iv) or (v), below) (a “legal entity”), in each case that is organized or incorporated under the laws of a state or other jurisdiction in the United States or having its principal place of business in the United States;

(iv)     any pension plan for the employees, officers or principals of a legal entity described in prong (iii), unless the pension plan is primarily for foreign employees of such entity;

(v)      any trust governed by the laws of a state or other jurisdiction in the United States, if a court within the United States is able to exercise primary supervision over the administration of the trust;

(vi)     any commodity pool, pooled account, investment fund, or other collective investment vehicle that is not described in prong (iii) and that is majority-owned by one or more persons described in prong (i), (ii), (iii), (iv), or (v), except any commodity pool, pooled account, investment fund, or other collective investment vehicle that is publicly offered only to non-U.S. persons and not offered to U.S. persons;

(vii)    any legal entity (other than a limited liability company, limited liability partnership or similar entity where all of the owners of the entity have limited liability) that is directly or indirectly majority-owned by one or more persons described in prong (i), (ii), (iii), (iv), or (v) and in which such person(s) bears unlimited responsibility for the obligations and liabilities of the legal entity; and

(viii)   any individual account or joint account (discretionary or not) where the beneficial owner (or one of the beneficial owners in the case of a joint account) is a person described in prong (i), (ii), (iii), (iv), (v), (vi), or (vii). [7]

 I've recently been heavily trying to study and interpret Frank Dodd's actual wording. I have a big big monumental issue with being able to access swaps internationally as a retail trader. So I am working on making my international business entity.


Right now I'm trying to figure out if it's possible for me to remain a resident while being the manager or director of a Cayman LLC or similar entity and some how trading through this entity with other internationally registered brokers who offer swaps and prohibit American *resident*.


The issue is what Dodd and Frank considers an eligible contract participant and what it considers and what the IRS considers a non natural , a non natural us person and entity. And wherein the exemptions for swap registration come in. Now there is one *possible* angle - I remain an American resident, but I operate internationally with another international entity, no commercial activity takes place in America, two non natural 'persons' engaging in swaps.


I would b a Controlled Foreign Corporation for tax purposes. The Trump Tax cut laws basically ended tax deffered structure for expat. But fortune 500 company create 'non conduit affiliate' 'non branch' 'non subsidiary affiliate' offices overseas owned by foreign partners...which allows them to skirt the IRS and CFTC.... I am wondering if I can just pay my taxes, but be considered a non natural for the purpose of CFTC?

Recently Tone Vays admitted that he is renouncing his citizenship in order to be able to trade leveraged bitcoin. But I don't think it's neccessary to be a non citizen? It should only be a requirement to not be a resident. Isn't he misrepresenting the actual laws?