FinCEN Issues New Clarification on BitCoin [June 13, 2013]

polarhei

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Activity: 462

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Firing it up

Quote from: ecliptic on June 25, 2013, 11:59:13 PM

What the hell is a "System Administrator of a virtual currency"

Do they mean to say the developers?

"Those who are intermediaries
in the transfer of virtual currencies from one person to
another person, or to another location, are money transmitters that must register with FinCEN as
MSBs, unless an exception applies"

So that's exchanges.

Nothing about miners. Nothing about mining. Nothing about selling coins for USD$. Absolutely zero technical knowledge, merit, insight, or intelligence. Exchanges are regulated and fulfill the KYC/ etc laws.

Lots of Four Horsemen of the Infocalypse, though.

The method you mentioned is completely exposed. In other law. The being is neutral as the developer's target is not for money. For operators, the guideline is on bankers and sellers.

polarhei

sr. member

Activity: 462

Merit: 250

Firing it up

Quote from: ProfMac on June 21, 2013, 12:45:51 PM

Quote from: Freebanking.org on June 21, 2013, 10:27:30 AM

I was there when she gave the speech. Someone needs to get a transcript of the Q&A because in that she pretty explicitly said miners of bitcoins and creators of virtual currencies need to follow the FinCEN three Rs (registering, reporting and record keeping).

We need a HowTo document.

How to? Use client used to note down how. This includes account and the bitcoin address used at least. We all dislike the infamous to crush the thing.

Bitcoinpro

legendary

Activity: 1344

Merit: 1000

are they represented on this forum they cant issue clarifications to nobody ?

ecliptic

sr. member

Activity: 322

Merit: 250

What the hell is a "System Administrator of a virtual currency"

Do they mean to say the developers?

"Those who are intermediaries
in the transfer of virtual currencies from one person to
another person, or to another location, are money transmitters that must register with FinCEN as
MSBs, unless an exception applies"

So that's exchanges.

Nothing about miners. Nothing about mining. Nothing about selling coins for USD$. Absolutely zero technical knowledge, merit, insight, or intelligence. Exchanges are regulated and fulfill the KYC/ etc laws.

Lots of Four Horsemen of the Infocalypse, though.

MSantori

full member

Activity: 168

Merit: 100

https://bitcointalk.org/index.php?topic=206305.60

MSantori

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Merit: 100

I think this "as a business" discussion is valuable, and if you'd like to continue it, would you mind posting it in the other thread? Don't want to derail this one if possible.

btceic

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Activity: 392

Merit: 250

♫ A wave came crashing like a fist to the jaw ♫

Quote from: MSantori on June 21, 2013, 08:02:10 PM

Quote from: btceic on June 21, 2013, 07:55:17 PM

so to sum things up as far as your interpretation of the current guidelines is; anybody in the us that mines will be required to be licenced?

No, quite the opposite. My (unpopular) position is that only miners operating as a business must register according to the guidance. I believe that the guidance is unclear, and that I may certainly be wrong about this position. It's just my interpretation of an imperfect document.

Ok,
Which brings me back to the "as a business" definition.

Here is what I found in a ~10 minute search on the subject:
http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions

Quote

................. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

In order to make this determination, taxpayers should consider the following factors:

Does the time and effort put into the activity indicate an intention to make a profit?
Does the taxpayer depend on income from the activity?
If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
Has the taxpayer changed methods of operation to improve profitability?
Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
Has the taxpayer made a profit in similar activities in the past?
Does the activity make a profit in some years?
Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

In my case:

Yes
No, but I would like it to be
Possibly
Possibly
Yes
No
Yes
Yes if the value of BTC goes up, less the deductions for depreciating mining equipment if any

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.

MSantori

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Activity: 168

Merit: 100

Quote from: btceic on June 21, 2013, 07:55:17 PM

so to sum things up as far as your interpretation of the current guidelines is; anybody in the us that mines will be required to be licenced?

No, quite the opposite. My (unpopular) position is that only miners operating as a business must register according to the guidance. I believe that the guidance is unclear, and that I may certainly be wrong about this position. It's just my interpretation of an imperfect document.

btceic

sr. member

Activity: 392

Merit: 250

♫ A wave came crashing like a fist to the jaw ♫

Quote from: MSantori on June 21, 2013, 07:46:39 PM

Quote from: btceic on June 21, 2013, 06:04:18 PM

I.E. if i am doing this as not my primary income will i have to become licenced?

btceic, are you referring to my statement in my other thread that miners need only register if they are a business? That isn't a question of whether your mining operations are your primary source of income. It's whether they are a business; i.e. engaged in for profit.

Yes,
So to sum things up as far as your interpretation of the current guidelines is; anybody in the us that mines will be required to be licenced?

MSantori

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Merit: 100

Quote from: btceic on June 21, 2013, 06:04:18 PM

I.E. if i am doing this as not my primary income will i have to become licenced?

btceic, are you referring to my statement in my other thread that miners need only register if they are a business? That isn't a question of whether your mining operations are your primary source of income. It's whether they are a business; i.e. engaged in for profit.

btceic

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Activity: 392

Merit: 250

♫ A wave came crashing like a fist to the jaw ♫

Quote from: Freebanking.org on June 21, 2013, 10:27:30 AM

I was there when she gave the speech. Someone needs to get a transcript of the Q&A because in that she pretty explicitly said miners of bitcoins and creators of virtual currencies need to follow the FinCEN three Rs (registering, reporting and record keeping).

So on this same thinking will precious metal miners also have to follow the three r's?

Does the previous statement of "as a business" still hold?

I.E. if i am doing this as not my primary income will i have to become licenced?

aigeezer

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Cryptanalyst castrated by his government, 1952

Quote from: Severian on June 21, 2013, 04:25:41 PM

Quote from: MSantori on June 21, 2013, 02:02:15 PM

You remind me that I've departed from my libertarian beliefs! I should probably amend my statement: If the government means to achieve its AML/KYC goals, it ought to regulate miners.

You're a better man than I am for being able to see from your opponents' perspective. Thank you for the reminder that I need to do it more often.

It's my hope that they'll eventually just give up when they realize they're doing as Caligula did and declaring war on the sea.

"He is no lawyer who cannot take two sides" (Lamb).

The graciousness between you and OP is disarming though - makes it hard to stay at full boil!

Anyway, I have the impression that all the "wars" on inanimate entities (drugs, poverty, terra, money-laundering) are intended to go on forever.
They are a career bureaucrat's dream.

These Sisyphean systems will collapse, presumably when fiat collapses.

Severian

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Quote from: MSantori on June 21, 2013, 02:02:15 PM

You remind me that I've departed from my libertarian beliefs! I should probably amend my statement: If the government means to achieve its AML/KYC goals, it ought to regulate miners.

You're a better man than I am for being able to see from your opponents' perspective. Thank you for the reminder that I need to do it more often.

It's my hope that they'll eventually just give up when they realize they're doing as Caligula did and declaring war on the sea.

aigeezer

legendary

Activity: 1450

Merit: 1013

Cryptanalyst castrated by his government, 1952

Quote from: MSantori on June 21, 2013, 02:02:15 PM

Quote from: Severian on June 21, 2013, 12:44:24 PM

Quote from: MSantori on June 21, 2013, 12:38:02 PM

I do believe that miners ought to be regulated

You're welcome to your opinion.

You remind me that I've departed from my libertarian beliefs! I should probably amend my statement: If the government means to achieve its AML/KYC goals, it ought to regulate miners.

Hmmn... "the government" of your country, I assume, and miners of one or more countries? Contemporary American overreach is always amusing yet chilling at the same time.

If your government wants to stop money-laundering, it should ban money - especially since side-effects generally do not appear to matter. That could solve its other little money problem at the same time.

MSantori

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Quote from: Severian on June 21, 2013, 12:44:24 PM

Quote from: MSantori on June 21, 2013, 12:38:02 PM

I do believe that miners ought to be regulated

You're welcome to your opinion.

You remind me that I've departed from my libertarian beliefs! I should probably amend my statement: If the government means to achieve its AML/KYC goals, it ought to regulate miners.

ProfMac

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Quote from: Freebanking.org on June 21, 2013, 10:27:30 AM

I was there when she gave the speech. Someone needs to get a transcript of the Q&A because in that she pretty explicitly said miners of bitcoins and creators of virtual currencies need to follow the FinCEN three Rs (registering, reporting and record keeping).

We need a HowTo document.

Severian

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Activity: 476

Merit: 250

Quote from: MSantori on June 21, 2013, 12:38:02 PM

I do believe that miners ought to be regulated

You're welcome to your opinion.

MSantori

full member

Activity: 168

Merit: 100

I think you make a good point, MGUK. I do believe that miners ought to be regulated, and above a certain threshold ought to be held to certain reporting requirements.

I don't believe, though, that the current statutory and regulatory regime actually requires them to. FinCEN disagrees, and is trying to apply this regime to miners. As I noted, I see why they're doing it, and I can't blame them for it. It's the only tool they really have to accomplish their stated mission of preventing money laundering and fraud.

I was just expressing my disappointment in the consequences of using those tools for tasks they were not designed to accomplish. It's not a novel complaint, it's just the one I seem to encounter the most in my practice.

Freebanking.org

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I was there when she gave the speech. Someone needs to get a transcript of the Q&A because in that she pretty explicitly said miners of bitcoins and creators of virtual currencies need to follow the FinCEN three Rs (registering, reporting and record keeping).

AliceWonder

full member

Activity: 168

Merit: 100

Thank you for posting that, I enjoyed reading it and to be honest, it actually made me feel a little bit at ease.
As long as I'm not using bitcoin to circumvent law, it looks like they have no interest in bringing me down.

Topic: FinCEN Issues New Clarification on BitCoin [June 13, 2013] (Read 2725 times)