Topic: FinCen preparing to prosectute some Bitcoin users - page 4. (Read 13153 times)

+1 to this, and also to crazy_rabbit about paying taxes.

It's technically not possible to launder money if the money is not associated with a crime.  At least the way I read the definition of money laundering.  I'm good here...happy days!

I lost interest in drugs about 25 years ago and have not spent a dime on them since that time.  I'm golden here to, although I think it should be fine for people to waste their money and destroy their bodies with drugs if they choose to do so.

As for capital gains, they won't kill me.  I didn't expect to make any money on Bitcoin at all so any net profit I make is great.  Thanks to the rich fuckers here in the US and our level of political corruption, we have low taxes for people who earn money by having money vs. by actually working for a living it so I'll ride along with them.

Even though I don't like my tax dollars killing kids in the outer reaches of our empire, I'll ante up anyway because it would be monumentally stupid not to.  Particularly when doing something which, although perfectly ethical, corp/gov is probably not going to be real fond of.  Cheating on one's taxes in association with Bitcoin will, I'm projecting, be one of the surest ways to end up in one of our gulags.

This is pretty much the scenario my mind devised when first theorizing on how the 'powers that be' (FinCen, Govt, etc) would respond to Bitcoin once it became a serious threat. Total psy-ops operation through major media outlets.

In fact, anyone discussing this thread topic has already fell victim to phase one. All they had to do is make a statement and we're already falling in line like sheeple, trying to figure out how to stay within the guidlines they prescribe. The seed has already been planted, they've made the first move, and we're acting according to their plan. You're all discussing and contemplating a defensive move, which is what they want and expect you to do.

Now they will monitor forums and chatrooms to see how we're all reacting to the news and use the info they gather to plot their next move. They know where we get info and they know where we relay info...they'll use the same places to listen in on us and to "leak info".  Operation: Bitcoin Down" is already underway....probably has been for a while. To the public, they ignore or play down Bitcoin...to us, they "leak" information of impending doom.

Bitcoin (and other cryptos) will ultimately lose as long as we all play their game. Not only did they write the freaking book on how to play, but they write new rules at their discretion.

Working on a defense only is certain death for Bitcoin. We all need to start brainstorming offensive moves. Obviously I don't mean violence of any kind....but, the media will be their battlefield...How could we beat them to it?

Just my 2 cents...

On a positive note, the best thing about a government agency becoming involved is that they are slow to act and react. A bigger worry for us is the corruption within listening to or following "orders" from corporate interests, politicians, etc. Regardless, if things are kept legit we have a HUGE backing. That is my point in this thread. We need to come together and have a good community of spokespeople, lawyers, etc. to defend and represent us going forward. We will probably be fine as long as another big war isn't started, then those crazy patriot laws get worse.

It would be nice to just have very very small transaction fees applied to legal defense, but then that would be like a tax and we already have that. We are going to need to depend on us, especially the early adopters who already have a good income and lots of bitcoins sitting around. 

Rock on Bitcoin community, Rock on...

IAS

The terrible thing about any government agency becoming involved with prosecuting crimes involving Bitcoin is that the little idiot “average Joe” will be the one who suffers. I expect when Bitcoin is finally attacked by ‘merica (I’ve been waiting for it for some time now) it won’t be the rich Bitcoin power brokers that are hurt the most it will be the small time user that the government imprisons as an example. I am shocked by MT Gox decision to have any presence in this country even for the forum.  There must be someplace in the world more suitable than ‘merica.

This isn't clear to me at all:

"A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter.
In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency."

My interpretation:

Our business (an ad network) accepts Bitcoin from users (advertisers) and pays users (publishers) in Bitcoin. From the sounds of this we are a money transmitter and an exchanger because:

1) we accept such de-centralized convertible virtual currency from one person (advertisers)
2) as part of the acceptance and transfer of currency (currency and or virtual currency?) (i.e. paying publishers for displaying ads), ..., or other value that substitutes for currency (i.e. virtual currency?)

It's ambiguous. We are not located in the US also. I will speak with a lawyer....

I called FinCEN not long after their ruling and asked them about their interpretation of miners. The guy I talked to said they are still working things out and mentioned having access to the guy who actually wrote the ruling. He said he would keep my contact details and possibly send me more information when he had clearer answers to my questions (specifically about mners). Most likely he meant I'm now on some government watch list. He was really friendly and seemed genuinely interested in working with (not against) the Bitcoin community.

I also talked to the person in charge of money transmitters in my state and he wasn't as familiar with Bitcoin, but he had been researching it. Both people told me about the processes needed to register, and it honestly didn't seem like that big of a deal. I'd like to hope if you follow the law, they will pretty much leave you alone. I have zero experience in these matters, so I'm probably naive there.

Adam did a great job with the podcast, and we were honored to sponsor episode number one. It feels good to contribute in a small way to its future while being part of its history. I'm looking forward to the next show.

There is absolutely no way this will ever fly.  If Bitcoins are "convertible money" or "funds" or whatever for the purpose of sending them to an exchange, then the same standard applies to trading them for goods and services.  Their whole so-called regulatory scheme is based on a distinction that doesn't actually exist.

Let me tell you how this will actually go down.  It will be done on a case by case basis, to people with specific circumstances that plausibly fit whatever obfuscated legal definition of cronyist, state-supported profit they come up with.  But it will be made to seem like the regulations apply generally.  It will be a total psy-op case, just like 'Wickard'.

They will pick some small-time guy who took out a fiat loan and used it to buy Bitcoins, which then went up in value.  They will make a huge deal about how he bought a tablet pc or something worthless at a Bitcoin store, but that this is fine because it's just "normal" everyday business.  Then they will harp on how he "profited" by trading a bunch of those Bitcoins at an exchange, and how that's "speculating" and "money laundering" and "unlicensed trading" and whatnot.

This will mostly happen in the media, of course.  The actual court case will probably just be settled with a plea bargain.

The important thing is that they will never once point out that the only reason they are prosecuting this guy is because he took advantage of the normal, everyday, licensed fraud that is the fiat money system.  The whole point will be to sweep that under the rug, while setting a precedent in people's minds and deflecting blame to Bitcoin.

Here's the legal argument that I think gets made if FinCEN goes after a business that accepts BTC:
The business accepted money for goods, this is fine under the guidelines.
The business then transmitted the BTC to an exchange.
The exchange then transmitted fiat money to the business, which is also fine as long as the exchange is following relevant laws and is licensed.

The room for argument is step #2.  Is transmitting BTC to an exchange going to be something they try to stop.  I don't see how they will go after this, but I don't put insane legal arguments past them.

    The bold font in the parenthesis doesnt suffice?

If you are going to give your interpretation as well then you might want to edit that to make it more clear what is the original FinCEN content being excerpted. (quotes, italics,  line spacing, ...  all are tools available to help distinguish the two.)

Sounds like they are making up rules on the fly. They're scared of bitcoins, now they'll start trying to shut it down.

Read:

I disagree with the interpretation above that it is illegal in the United States to sell bitcoin whether for cash or at the exchanges.

The sentence 'a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter' only refers to miners if I am not mistaken. I don't know what the implications would be for miners selling bitcoins though.

Bradley thinks FinCEN is indifferent to the damage they do in pursuit of their larger goals.  I don't think it's as simple as going after drug dealers, the ambiguity is there to cause concern and eventually to spark panic.

I expect the targets to be unknown, relatively small and to all appearances harmless individuals operating businesses moving value from bitcoin to dollars or the other way around.  I expect the infractions to be small and omissions rather than obvious criminal acts.  I expect this to cause a panic as it dawns on people that anyone moving from dollars to bitcoin or vice-versa on a regular basis are subject to all kinds of legal implications.

I expect this to cause a shift in the way some people think about money, and I expect there to emerge a class of people who transact entirely in Bitcoin because it more appropriately suits their lifestyle while discarding the legal implications involved in currency conversion.

Adam B. Levine

Pirateat40 is a rather obvious candidate.

As far as I can see pirateat40 has a lot more to worry about than just the SEC, including the IRS over witholding taxes, and yes FinCen over all sorts of money laundering offenses.  Now as to the impact on the BTC / USD exchange rate of piratat40 in shackles and an orange jumpsuit that is anyone's guess.

Pirateat40 will be indited by the US SEC

Yeah if anything it will be over this and possibly Pirate@40.

Thanks for the comments and interests guys. My intention here is purely one of being careful and keeping an eye out.

Yes, it's possible that the man in podcast is lying, but regardless, he sounds very intelligent and familiar with FinCen and we shouldn't overlook that. I'm giving him the benefit of the doubt.
If he is wrong then we have nothing to worry about. But we should prepare in case he is right. It is much better to approach things proactively than purely re-actively.  I think that is fair considering we are dealing in currencies and ALL competitors to the dollar (that I am aware of) have been shut down by FinCen that I can remember. The only ones that haven't I believe are small local currencies.

What we do have on our side are a few things:
1 - We have good intentions it appears
2 - The government traditionally is very very slow to react.

IAS

K. Thanks.

I emailed newegg, I will start a new topic pertaining this.

That is a good point, although rather than "illegal" the accurate way to phrase it would be "makes you a money transmitter".

This language needs some clarification to be sure. I still think if you are mining and sell your mined btc on an exchange, you should not have to register separately with FinCen b/c (a) you could not possibly file SARs b/c you don't know who you are trading with, and (b) the exchange already should file SARs, and is the person best equipped to do so.

Please keep in mind these are GUIDELINES and not the law or even administrative regulations. So ultimately if you have real concerns about what you're up to, you probably need to dive deeper. If I were a big mining pool I would pay a good firm to advise me on getting some no-action letter or other comfort on my proposed legal position.