Topic: FinCen preparing to prosectute some Bitcoin users (Read 13159 times)

Does anybody wonder why the mods haven't moved this to the legal section?  lol

Certainly good points.  I had considered Satoshi dice as a major contributor of the BTC transactions, but without doing any real analysis I assumed that it would be a small percentage of actual coins being sent.  At the current numbers, the average transaction size is around 16 BTC.

I contributed to SD for a bit just a learning experience.  I probably did around 30 transactions, lost half of the 1 BTC I was gambling with.  That's a lot of transactions (in aggregate), but a very small amount of actual BTC (even in aggregate).  7% of the entire market cap of BTC moved around in the last 24 hours.

1 - It absolutely could be speculators, the amount of money in this market is a tiny tiny fraction of the value sloshing around in the world looking for someplace safe from devaluation or confiscation to hide.  Right now it's hard to buy bitcoins, but it's alot easier than it was last year and next year it'll probably be easier than it is now, or illegal.

2 - Satoshi's dice is a major source of BTC traffic, are you remembering to factor that in?

This is something I have been assessing.  A quick number crunch shows what a tiny percentage of the total BTC transactions for a day are related to SR.  I want to understand where all this BTC is going -- 560k in the last 24hours.  A fraction of that is SR related.  Where is all this BTC going?  It can't all be speculators.

What if it's just one dude? that would explain why no information leaks have happened, one dude, who from the beginning had a game plan.
what that game plan is, I do not know, but can you imagine if he thought this all out, right through!!

IMO, it's hopelessly naive to think that 'they' don't know exactly who 'Satoshi' is.  A lot of people probably do.

From that article this is the most important bit regarding Satoshi.

"The Financial Crimes Enforcement Network, or FinCen, has signed off regarding online currencies, saying that it would not prosecute their originators so long as no criminal behavior is taking place."

That is why he can't come back. If they can't find him "the originator" they can't prosecute him.

Meeting the Regulators:
http://www.cnbc.com/id/100675118

I would not be confident about that at all.  I have as much confidence in Mark as I do just about anyone in the Bitcoin community at this point, but I don't believe that ANYONE is likely willing to spend significant time in a gulag to protect someone else's BTC or fiat.*  And if they are subject to 'extraordinary rendition' and 'enhanced interrogation', the chance they would not cough up the desired item is probably near zero.

Mark/Mt. Gox could win my trust here by outlining a credible protection strategy capable of withstanding the types of attacks that are known with certainty to be applied against by adversaries such as the US government, and some incontrovertible evidence that such strategies are being employed.  Such strategies are quite possible, if cumbersome, with split secrets and so on.  I'm not holding my breath for such evidence and in the mean time consider any BTC or USD I might have on account with Mt. Gox to be subject with a fair likelihood to total loss.

(*) I feel it technically incorrect to classify BTC I have on account at Mt. Gox as 'mine', but it's convenient shorthand.

Edit: fix

I doubt if Gox is that stupid to have their btc "seized" on the premises.  I am sure if the Japanese government shut gox down, they or some associates would still have plenty of access to their btc.  Isn't btc cool?

What would it do to the exchange rate if all of a sudden the BTC held by Mt Gox were taken completely out of the market for a few years?

+100

agree!

Stay informed, stay involved, know the law, if you aren't part of the process your against it.

Check the Bitcoin Wiki first, educate yourself, and update it with any relevant information for the community.

I highly recommend everyone get a News reader and set it up, ask help from the community to set it up and trade news lists so that new people don't have to struggle with putting every news site one by one into their new Reader.

http://www.jetbrains.com/omea/reader/


Get good information from the internet, Download the YaCy(you see) p2p search engine, same as above ask for help to set it up. help build a uncensored map of the internet and tailor your searches for good balanced information sources.

http://yacy.net/en/index.html  or get it from your favourite torrent client.


We are a conglomeration of users from mostly Democratic countries, I think we should act like it and get involved with our governments so they know our position.

I know there are many here who wish for nothing more than the demise of governments, but that's not going to be possible if we isolate ourselves thinking that we are free to do what we want without having to consider someone else's position, That is just not feasible, sooner or later we must agree to co-operate; After all what would we do if we did not have the Farmer to feed us? or the Trucker to deliver that food? maybe the grocer to keep the food fresh for consumption?

Alone we fall, together we stand.

i highlighted your statement at where btcbuy went wrong, and will leave them to read the full length of regulations as to why/how they went wrong.

if you want to get fiat (in any form) above $1000 in a small period of time or above $10k over a year and no ID is ever asked. then don't expect that service to run for very long.

i too dont want/do drugs. but this is where the media has brainwashed you. bitcoin is not used just for scamming people/drugs/playing the markets.

buy a computer or a tv www.bitcoinstore.com
buy some food https://www.foodler.com/user/Bitcoin.do
plus thousands of other things.

and remember bitcoin is still new. its still in the victorian age of currency. where its just moved away from only being used to trade on market places and whorehouses (cam4bitcoins) and is now moving onto being useful for more of a variety.

so the reason to mine is not to spend today. but to spend later.

if you really need FIAT and your only desire is fiat then only withdraw a couple hundred dollars/euros/pounds just to pay the bills.

cashing out every single bitcoin you mine for fiat defeats the entire reason for even using bitcoin

There is corruption, but you can still influence Congress. Just look at the recent gun licencing bill. It was revoked in part because congressmen were under pressure from their constituents. It was only a small minority of constituents, who happened to be NRA puppets, but as their lobbying was so intense and relentless, and the majority of people for the bill didn't vocalise nearly as much, this influenced the outcome. It should be a similar situation with keeping things reasonable with fincen. If enough US citizen bitcoiners write repeatedly to their congressmen, there should be better odds for a better situation, or at least to prevent it from getting worse. (I'm paraphrasing from Bradley Jansen on the podcast)

I wouldn't have too much faith in your congressional critters - they've been bought and sold for 30 years now.
FinCEN is mostly working to obfuscate the massive fraud known as Wall St. - the crimes they end up prosecuting are laughable.

They enlarged their jurisdiction last year without any oversight or authority:
http://www.zerohedge.com/news/guest-post-long-arm-uncle-sam-just-got-longer

FinCEN's latest ruling suggests a foreign MSB may now be subject to US regulations AND CRIMINAL PENALTIES "even if none of its agents, agencies, branches or offices are physically located in the United States."

But BTCBuy was not exchanging directly for fiat they were doing gift cards in fiat denominations. If I can't even get a gift card with btc why should I mine. I don't want drugs off of SR so I guess I'm left with just trading with scammers in the Marketplace section of this forum, right?

5 pages of blah

put simply

rule 1
if you touch fiat read the regulations and learn the rules and follow them

rule 2 over $1000 / Euro1000 / £850 in a single transaction or multiple transactions deemed as linked (same day/same recipient/payee) requires Identification

rule 3
over $10,000 / Euro15,000 / £12500 in a year requires identification

rule 4
if payee / recipient makes it obvious that the use of the transaction is crime related, or details of the people are linked to a criminal hotlist then a SAR's report has to be made.

rule 5
have policies/ coding features to log any /all info you can gather to recognise repeat business to then warn the transactors they are approaching limits, then requiring ID. gathering ID if they wish to continue.

rule 6
fincen dont just shut down a exchange on a whim. they do however shutdown exchanges if a report gets received to them which they then back track to an exchange and it is found that the exchange aint following the rules... so follow the rules

rule 7
dont be dumb thinking you can be lazy by not having policies inplace, as sometime/someplace if your bank just asks a simple question and you dont have the answer they may end up investigating you.

rule 8
even scammers that try chargebacks trigger the banks involved to then internally investigate and pass on info to fincen if an exchange can't give valid explanations.

rule 9
there are more rules but the simple ones above have been neglected by previous exchanges and so they get shut down and then blame regulators, and not the 17yo zit faced guys behind the exchanges for being lazy to not learn the rules.

many exchanges such as intersango got shut down because the lazyness of not even reading the UK FSA guidelines to even bother following the rules.

the rules are simple. talking to fincen SEC, FSA etc is simple. if you follow them you are fine. but the main thing is rule 1
if your going to touch FIAT READ AND FOLOW THE RULES

rule 10
if you don't want to follow the rules. don't touch FIAT

Just another rambling:

To get around the "miner is an issuer of virtual currency if he sells for $$". The workaround is off course to buy another virtual currency for your mined coins which you then sell. That way you are spending your mined Bitcoins and not selling them which would make you a money transmitter.

Selling bought altcoins does not make you a money transmitter!

Taa daa.. problem solved.

Great idea, I'll ask around and see if I can publish a list on bitcoinfoundation.org.

The article is a bit of a rehash from the podcast. It is a bit of a misnomer saying it's "choking bitcoin entrepreneurs", rather it is choking exchanges. Still a good read though. (edit - I guess exchange owners are big entrepreneus! Just meant the regulations are not yet affecting other businesses that I have noticed.)

The big thing we have on our side is the state of the world. Just look at the currency situation. The government will mostly be slow to react. I am thinking the continued
currency collapse will occur faster than they can even try to stifle bitcoin and other cryptocurrencies. It may not be smooth, but I have a feeling "We are on a mission from God."  
Bitcoin to governments and banks might seem like a problem now, but bitcoin isn't going to really hasten there collapse, they are doing a fine job on their own.

IAS