Topic: FinCEN Ruling Requested for Bitcoin Mining - page 2. (Read 2697 times)
Did you ever get a ruling on this?
Jazkal, all cryotocoins would be treated the same. So to fincen theres no distinction between btc and ltc.
I didn't see anything like that in the doc, nor any quotes from them on this topic.They say:
Quote
uses it to purchase real or virtual goods and services
I see trading mined BTC for LTC as purchase of virtual goods. The LTC held in this manner, were not mined by me, they were purchased with my mined BTC.
What do you think they classify "virtual goods" as? Anyone know if they have defined this?
And I'm not saying you are wrong, just that I don't see anywhere where they state it that way. You could be right, that's why I'm asking. Hoping other people who have looked into this more maybe have some definitive answers.
Some things to think about...
Example One:
If I mine AltCoins, and sell those for BTC, and then Sell those BTC for US Dollars, does that make me a user or a transmitter?
Example Two:
If I mine BTC, and sell that on one exchange for LTC, and then back again to BTC, can I then sell those for US Dollars without being a transmitter? Or is that considered laundering?
Example Three:
What if I was playing the market with my mined BTC, exchanging them for LTC and WDC and back to BTC?
Jazkal, all cryotocoins would be treated the same. So to fincen theres no distinction between btc and ltc.
Glad to hear it! FinCEN's recent guidance seems to give a clear answer on this, but there's no reason not to get something more specific. I'm interested in the result.
I don't understand what you mean by saying FinCEN gave a clear answer. Where is that clear answer? There is a statement claiming miners are money transmitters but I don't see where they reconcile this claim with the actual definition of a money transmitter which says money transmission is: person A >> Monet Transmitter >> person B
FinCEN's answer was clear, as you noted: miners are money transmitters. Also as you noted, its definition of money transmitter doesn't seem to comport with the typical definition of a money transmitter. That's precisely why I'd be glad to hear their specific reasoning.
http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf
See page 5, section C.
Quote
De-Centralized Virtual Currencies
A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.
{1} 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.
{2} 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.
{3} 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.
A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.
{1} 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.
{2} 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.
{3} 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.
Still clear as mud. But they do break it down into at least three categories, the first two are the ones I'm interested in. #1 says as long as I go from Mined BTC to purchase real or virtual goods, then I'm not under regulation. #2 says if I take my mined BTC and sell it on an exchange for US Dollars, then I am under regulation and need to report.
Am I reading this wrong?
Some things to think about...
Example One:
If I mine AltCoins, and sell those for BTC, and then Sell those BTC for US Dollars, does that make me a user or a transmitter?
Example Two:
If I mine BTC, and sell that on one exchange for LTC, and then back again to BTC, can I then sell those for US Dollars without being a transmitter? Or is that considered laundering?
Example Three:
What if I was playing the market with my mined BTC, exchanging them for LTC and WDC and back to BTC?
I filed a request for an administrative ruling on Bitcoin mining now that I have some Avalons:
http://cointext.com/fincen-ruling-requested-for-bitcoin-mining/
http://cointext.com/fincen-ruling-requested-for-bitcoin-mining/
I think I just realized one minor flaw in what some people are thinking about mining Bitcoins and the FinCEN guidance.
Depending on how the coins are mined (as part of a pool, solo mined, etc), part (and eventually all) of the coins were not created because the transaction fees paid by others may be included in the coins received by the miner.
I know with some pools, the pool keeps the transaction fees, so the wording you used in the request would fit perfectly because the miner only got created coins.
But when the reward is gone in a few decades and only transaction fees are what makes up the mined coins? Or if one is solo mining or on a pool that includes transaction fees in what they pay out? In that case the miner would be receiving coins from someone else and then transmitting them to another if they then send them elsewhere.
I do agree, that guidance is about as clear as mud and we need clarification. However, might want to include more detail in the request if it's allowed to amend what you've already sent.
And a disclaimer: IANAL, but this just seemed like common sense stuff to me.
To me they are saying:
a) the creation of AND THEN the transmission of virtual currency.
AND
b) the acceptance of virtual currency.
Therefore (to me at least), no one will be able to accept a payment in BTC* nor will they be able to send BTC* as a payment without having a money transmission lic.
* or any other virtual currency for that matter.
a) the creation of AND THEN the transmission of virtual currency.
AND
b) the acceptance of virtual currency.
Therefore (to me at least), no one will be able to accept a payment in BTC* nor will they be able to send BTC* as a payment without having a money transmission lic.
Quote
The problem with Bitcoin mining comes in with the FinCEN guidance that claims:
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.
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.
Quote
But the rules that govern FinCEN state:
… The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. …
… The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. …
* or any other virtual currency for that matter.
Glad to hear it! FinCEN's recent guidance seems to give a clear answer on this, but there's no reason not to get something more specific. I'm interested in the result.
I don't understand what you mean by saying FinCEN gave a clear answer. Where is that clear answer? There is a statement claiming miners are money transmitters but I don't see where they reconcile this claim with the actual definition of a money transmitter which says money transmission is: person A >> Monet Transmitter >> person B
FinCEN's answer was clear, as you noted: miners are money transmitters. Also as you noted, its definition of money transmitter doesn't seem to comport with the typical definition of a money transmitter. That's precisely why I'd be glad to hear their specific reasoning.
Someone commented on the blog that they think that provision was aimed at Bitcoin developers.
Sounds to me like they are aiming at miners and trying to cut this thing off at the throat as it were, they want their tax dollars!
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Glad to hear it! FinCEN's recent guidance seems to give a clear answer on this, but there's no reason not to get something more specific. I'm interested in the result.
I don't understand what you mean by saying FinCEN gave a clear answer. Where is that clear answer? There is a statement claiming miners are money transmitters but I don't see where they reconcile this claim with the actual definition of a money transmitter which says money transmission is: person A >> Monet Transmitter >> person B
FinCEN's answer was clear, as you noted: miners are money transmitters. Also as you noted, its definition of money transmitter doesn't seem to comport with the typical definition of a money transmitter. That's precisely why I'd be glad to hear their specific reasoning.
Glad to hear it! FinCEN's recent guidance seems to give a clear answer on this, but there's no reason not to get something more specific. I'm interested in the result.
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