Topic: Discussion of Leaked FBI Report on Bitcoin- April 2012 - page 3. (Read 6990 times)

Aww, I already have typed up the first 5 pages!

For what it's worth, here's my comments on it so far...
- Whoever wrote it didn't like commas.
- A few word-choice mistakes, especially in the text boxes. (example:  "...that allows users to consolidate many bitcoin address..." )
- For some reason, they believe that all Bitcoin addresses are tied to a person's IP address.  See the green box on page 5 for more details on that.
- They make mention that it is the first FBI look into Bitcoin, which I thought was interesting.

EDIT:  Would anyone still be interested in a hand-typed, exactly-as-displayed version of the document in docx format?

+1 and start a separate thread to handle crowd source funding and progress.  Having a digital searchable, quotable version would be an asset for whole community.

Perfect! Throw us your BTC address when your done, Ill gladly donate 2-3 BTC for it.

For the record, I've already got OCR going on it and its having good results. I'll post when its done and I've fixed the errors.

Sure, I'm in for 2 BTC.

Wanna set up the thread?

mturk ftw

In the other thread someone said they are willing to retype it (or OCR and correct it).  Maybe we can crowdfund this.  Get 10 people who want a readable copy to pledge 2? BTC. 

Someone needs to OCR this ASAP

Caution I am not a lawyer but I have seen one on TV.

My semi-informed but totally layman's understanding of cross state licensing:

1) Most states require a license if your company has a presence in that state.

2) Some states (NY, CA, VA about a dozen more) require a license even if you are out of state (foreign entity) if you process any tx for residents in that state.

3) We have learned that many surety bond issuers can issue a multi-state bond.  So if you need to be licensed in 8 states and the largest requires a 200K bond you can find an issuer who can issue a bond covering your obligation in all 8 states.  It will be more than the cost of a single state bond but it won't be 8x the cost of a single state bond.  Cost is still pretty significant though.  Oh to just have an extra $200K in cash (to post a security deposit in lieu of a bond).

4) If you aren't registered in all states some mechanism of verifying the user's address will be required.  You can then dynamically limit your offerings to the states where you either have a license or no license is required.

We are looking into licensing in Virginia.  Due to the cost and complexity we likely will not initially obtain licensing in states which require licensing for out of state entities (IMHO I feel they are overstepping their bounds).   As a result if we offer any money transmitter services it will not include all 50 states.

Not exactly optimal but the govt has really turned this into a mess.

I am including links to a readable .pdf file. That Scribd file is horrid.

http://www.bitcointrading.com/forum/index.php?topic=525.0

Direct link to the report

http://www.bitcointrading.com/files/fbi/92797476-FBI-Bitcoin-Report-April-2012.pdf

I'm too good looking to go to jail  

Good luck Yankee...

According to my research (dated ~6 months), operating in the US implies getting licensed in ~47 states.  Only a few states, such as NY or CA, have a law that requires out of state businesses dealing with NY/CA residents to be licensed in NY/CA.

As you probably know, that implies a surety bond and background check in ~47 states

I would have opened a US exchange over a year ago, if not for the state licensing requirements.

I talked to State of North Carolina banking/securities people as well as lawyers...

In continution of this thread https://bitcointalksearch.org/topic/bitcoin-fbi-report-april-2012-80114

For those who have not read it, www.scribd.com/doc/92797476/FBI-Bitcoin-Report-April-2012

I want to point out 7th page 'Third-Party Bitcoin Services' as it discusses area where Bitinstant holds its legal footing.

It seems like from this report and using this report as legal precedence, that Bitcoin businesses need the following

1- Register as a federal MSB with FinCEN
2- Become state licensed in 40 US States
3- Develop a reasonable effort to deter money-laundering with an AML Manual and Program.

#2 scares me the most, because it is physically impossible for me or any of us to do that without spending $5m+

There is a way around #2, but Im still looking into the legalities of it- its a loop hole which they can easily close.

They also mention the $1,000 a day threshold does not apply
Source 'Additionally since any third-part Bitcoin services falls under the MSB rule would do so as a money transmitter, there is not a transaction threshold (such as 1,000 per day) that must be met for regulations to apply, unlike dealers in foreign exchange or issuers or sellers of checks or monetary instruments'

This is my biggest worry...