Further thoughts on the "money transmitter" designation

data_teks

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Quote from: paraipan on May 30, 2013, 10:16:58 AM

Quote from: RodeoX on May 29, 2013, 08:53:20 AM

Using bitcoin, including using qt, should not be a problem. You are not a money transmitter because you are not transmitting money, as FinCen see it. If you operate an exchange that exchanges bitcoin for fiat then you will need to be licensed as a transmitter.

Source please?

As far as I know from extensive legal counsel bitcoin is not a financial instrument, or better said "money", but personal property like domain names for example. There are already many laws and regulations in place that take into account digital property that could, and would, be applied in the future. Looking for new regulations doesn't sound like a very bright idea in my opinion.

Yeah, I tend to agree here. I just look at this way; once your exchange company has enough money in the bank account that makes it worth it for the US government to seize it, this is when they consider you a "money transmitter". So just keep your money spread around....

...of course, now your probably considered a terrorist Undecided

paraipan

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Quote from: RodeoX on May 29, 2013, 08:53:20 AM

Using bitcoin, including using qt, should not be a problem. You are not a money transmitter because you are not transmitting money, as FinCen see it. If you operate an exchange that exchanges bitcoin for fiat then you will need to be licensed as a transmitter.

Source please?

As far as I know from extensive legal counsel bitcoin is not a financial instrument, or better said "money", but personal property like domain names for example. There are already many laws and regulations in place that take into account digital property that could, and would, be applied in the future. Looking for new regulations doesn't sound like a very bright idea in my opinion.

data_teks

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Quote from: QuantumQrack on May 30, 2013, 12:58:27 AM

Would like to add that getting licensed to use money is a fucking joke on humanity.

If you know the company you're sending your money to is licensed and has paid some $7 million+ bond, it's a pretty good bet they won't scam you; so I like that. Just imagine all the deadbeat companies there would be if these licenses didn't require some type of security bond.

PS. I think it's a little steep in price though. It should be more like $10k or so per state, just like if you're dealing in precious metals.

ArticMine

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Monero Core Team

Quote from: datafish on May 29, 2013, 08:16:33 AM

I wonder if FinCEN could come out with an additional "guidance" along these lines...

A) If you operate a bitcoin node, defined as any client or server software that forwards bitcoin transactions to the bitcoin network at large, regardless of whether or not you are mining said currency, then you are a "money transmitter" and need to be licensed as such.

B) The preceding paragraph applies to anyone operating a node which accepts transactions from or forwards transactions to any U.S. citizen, regardless of the location of the node.

C) If you store your bitcoins on a hosted wallet, where someone else forwards your transaction to the network, then you are not a money transmitter.

Thoughts on the likelihood of such a scenario and its impact on bitcoin? Do we all move to Tor/I2P?

IANAL. Fincen has already provided guidance and as far as I can see in. A) and B) the answer is no. The key is that you have no discretionary control over the private keys to the transactions unlike a MSB. C) The owner of the Bitcoins is not a MSB since they are sending their own funds but the company who provided the hosted wallet is a MSB if they have control over the Bitcoin private keys. Why because the receive direction from you and then send the BTC upon your direction to a third party.

QuantumQrack

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Quote from: GGGGG on May 30, 2013, 12:06:06 AM

Quote from: pekv2 on May 29, 2013, 08:58:02 AM

Food for thought. How much are these licenses cost? We all know a fishing license isn't for the fish, but to pay for DNR's job entitlement.

I believe, and someone correct me if I'm wrong, that the cost of becoming a money transmitter involves a $25 million "security deposit"

I believe to get surety bonded in 48 states costs $7,000,000. Or 53,000 BTC (at the time of writing this)

Q. What is the total amount of surety bonds we’ll be required to have?

A. Surety bond amounts are set by each individual state. Some states have a statutory or set bond requirement while other states have a fluctuating bond requirement. States with a fluctuating bond requirement start with a minimum bond amount that will increase and fluctuate yearly based on your volume of transactions, number of “agents” or number of physical locations. Needless to say, the minimum total amount of surety bonds you’ll need to be licensed nationwide is approximately $7,000,000.

Source: http://msbtalk.wordpress.com/

Would like to add that getting licensed to use money is a fucking joke on humanity.

bytemaster

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fractally

What is that 'security deposit' for (in theory, not in practice). The only logical reason to require a security deposit is *if* there is an IOU involved as part of the transmittal service. If that is the case, then what logical reason would remain for a security deposit if you only deal in digital goods that have 0 counter-party risk? The only one I can think of is: so we know where you are, have you by the balls, and can force you to comply with money laundering regulations...

They will do what they want, find ways to ignore and work around them!

With BitShares (https://bitcointalksearch.org/topic/m.2314427 BOUNTY) we can have a decentralized gold-backed bank with one-or-more anonymous issuers with 0 counter-party risk and receive interest on those deposits. Why would anyone continue using a regular bank if they could earn interest on gold denominated deposits with 0 counter-party risk?

GGGGG

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Quote from: pekv2 on May 29, 2013, 08:58:02 AM

Food for thought. How much are these licenses cost? We all know a fishing license isn't for the fish, but to pay for DNR's job entitlement.

I believe, and someone correct me if I'm wrong, that the cost of becoming a money transmitter involves a $25 million "security deposit"

FoBoT

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if bitcoin continues success, large corporations (CitiBank, BOA, Visa, MC) will put pressure on the govt to use regulations like that to clamp down
they'll do it the way the RIAA/MPAA use ISP's to crack down on people that upload movies/music/copyright material, nasty letters from the datacenter hosting companies or ISP threatening legal actions, then they'll make a few example cases out of people that cannot afford legal representation and bankrupt or jail them, scare the bitcoin community into compliance with the government/corporate overlords

jgarzik

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Quote from: datafish on May 29, 2013, 08:16:33 AM

I wonder if FinCEN could come out with an additional "guidance" along these lines...

A) If you operate a bitcoin node, defined as any client or server software that forwards bitcoin transactions to the bitcoin network at large, regardless of whether or not you are mining said currency, then you are a "money transmitter" and need to be licensed as such.

No, because it is not possible for you to spend the money.

Quote

B) The preceding paragraph applies to anyone operating a node which accepts transactions from or forwards transactions to any U.S. citizen, regardless of the location of the node.

Ditto the preceding answer.

Quote

C) If you store your bitcoins on a hosted wallet, where someone else forwards your transaction to the network, then you are not a money transmitter.

In this example, you do have the ability to spend this money. You are transmitting value.

pekv2

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Food for thought. How much are these licenses cost? We all know a fishing license isn't for the fish, but to pay for DNR's job entitlement.

Eich

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i dont think it matters what fincen tries to do. until you have someone physically preventing you from installing the bitcoin client, how can their regulation do anything? Agorist transactions are still going to remain unregulated.

RodeoX

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The revolution will be monetized!

Using bitcoin, including using qt, should not be a problem. You are not a money transmitter because you are not transmitting money, as FinCen see it. If you operate an exchange that exchanges bitcoin for fiat then you will need to be licensed as a transmitter.

Gabi

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If you want to walk on water, get out of the boat

I don't think i need a license to run bitcoin-qt

Especially since then what about all other virtual currencies? Wow gold, EVE isk, and all other games, they too need a money transmitter license? Nah

Serge

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are you trying to imply that fincen would guide use of bitcoin only to be restricted to banks and other financial institutions covered by money transmitter licence? that's what would happen if fincen guides according to your proposal. keep dreaming...

datafish

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Swimming in a sea of data

I wonder if FinCEN could come out with an additional "guidance" along these lines...

A) If you operate a bitcoin node, defined as any client or server software that forwards bitcoin transactions to the bitcoin network at large, regardless of whether or not you are mining said currency, then you are a "money transmitter" and need to be licensed as such.

B) The preceding paragraph applies to anyone operating a node which accepts transactions from or forwards transactions to any U.S. citizen, regardless of the location of the node.

C) If you store your bitcoins on a hosted wallet, where someone else forwards your transaction to the network, then you are not a money transmitter.

Thoughts on the likelihood of such a scenario and its impact on bitcoin? Do we all move to Tor/I2P?

Topic: Further thoughts on the "money transmitter" designation (Read 1235 times)