Topic: License for entering the business of money transmission - page 2. (Read 6169 times)

your the one saying ever penny movement needs a licence.. not me

you keep thinking that banks are psychic to know that a $20 bank transfer is a birthday gift.
and not:
that grandma is buying something off of me.. and then im then buying something using the profits.
or:
that grandma wants something online but doesnt trust the web so is using me as a money transmitter to buy it
or:
that person A is even my grandma paying me.. and not a complete stranger using me as a money transmitter.

the banks do not know the facts of the purpose of transactions under the certain thresholds. to class you as a money transmitter or not.

the banks just know that the people involved are not on an active watchlist and the amounts are below the tresholds to not deem worthy of investigating further.
now PLEASE READ the regulations. phone up fincen, or even speak to bitinstant!!!

sending money to another account, making a payment, etc is NOT money transmission.  You seem to think that anytime money moves it is money transmission.  By that logic every consumer and business is a money transmitter.

Money transmitters move money for SOMEONE ELSE.  If you are moving your OWN MONEY by definition you are not a money transmitter.

I don't need a coffee, what I need is for you to stop making up nonsense and passing it off as fact.  You are negligently incorrect in every statement you have made in this thread.  If you want to be ignorant then go ahead but when you try to spread that ignorance I am going to correct you.

banks, fincen, and other moneytransmitters are not psychic to know the difference between someone transmitting $2 or someone buying a product from another person for $2.
so claiming that every person that sends a penny to another account needs a licence is obsurd.
now please take a step away from the computer and have a coffee.

what the regulators have done (which can be verified by reading the fincen website, and i would plead you to read it)
is set a limit of what they call personal transactions/low risk which do not require investigations (unless a watchlist flag is triggered).
EG
amounts under $1,000 from a individual in a small time period (one day) does not require taking their identification, or requesting the purpose of the transaction.
amounts under $15,000 from a individual totalled in a year does not require taking their identification, or requesting the purpose of the transactions.

amounts over this threshold they deem as business transactions / high risk transactions which do require ID, etc to be investigated as to the purpose of the transaction. if if that transaction purpose is purely a money transmission. then part of the investigation would be to see if they are a licence holder.

never in my life have i seen a bank check that a relative sending money as a birthday gift (not product purchase) is a licence holder...

well maybe thats because during my teenage years (decades ago) i never received over $1000 (£850) in one lump sum from a relative

None of that has anything to do with money transmitter or a license.  

Your are simply 100% wrong in your statement that large transfers require a money transmitter license.  You also are wrong in stating you know the reason for the C&D and you are wrong in claiming a MY license in needed in all 50 states. There is no way to fudge that.   This are false statements. 


Banks are required to file SARs and CTRs and may close accounts if they deem them high risk.  None of that has ANYTHING to do with Money Transmitter laws or licensing.  Banks routinely close non Money Transmitters for being high risk. 

99%+ of B2B commerce is >$1000.  Not sure what kind of childhood lemonade stands you have been running but hopefully $1000 is insufficient for weekly payroll much less inventory purchases.  Of course none of that has anything to do with Money Transmitter laws.  If you are a Money Transmitter you must be licensed to transmit even a single penny.  If you are not a Money Transmitter there is no special "I buy lots of stuff license" even when making seven figure deals.   One does not get a MT license simply because they make large purchases/payments.  One ONLY gets a Money Transmitter license if they are a Money Transmitter.  You are simply throwing stuff against the law and trying to see what sticks.

you are right this is not all i will say on the matter, due to death and taxes knit picking OPINIONS, INTERPRETATIONS and then crying that its posted as FACTS
death and taxes. please step back and have a coffee...

i have never said FACT!!

any business relying fully on legal advice from a forum is asking for trouble. they should take what is wrote here as a stepping stone into understanding a bit of the details of how the system works so that when they go to accountants, solicitors etc they are fully prepared and more understanding of what is being told to them.

CAblez.
please understand that the numbers i used are examples that would trigger a red flag. but would not trigger an automated freezing of your account.

its advisable to read the fincen regulations, guidelines, handbooks etc. and it shows there that banks have a duty to put in place flags of potential risk. to then without freezing accounts, investigate the level of risk and if.... only if the level of risk is high enough to require a sars report to be produced (due to a linked account being on a watchlist) only then would they freeze an account or send a cease and Desist.

this is why i say that the californian bank had IN MY OPINION sent out the C&D order as they seen the funds hop through more then one account (money transmission) and the receipt being bitcoin foundation which is unlicenced. and may IN MY OPINION be on a watch list. IN MY OPINION it has nothing to do with them programming the qt client

now back to death and taxes
when a bank see's money moving from one bank account to another. the bank is not psychic to know if it is product purchase or a movement of funds. until you have a conversation with your bank.

most banks learn what the business purpose is when they receive a business plan. and gradually adjust the potential risk flags accordingly, thus maybe never needing further communications.

but pretending that there are no hidden flags that banks use, pretending that there is no need to inform your banks about large out of the ordinary payments, pretending that FIAT is your money to do with as you please. is why so many of these bitcoin traders on OTC (not formal business exchanges) get their accounts frozen.

so the best advice is to never assume your bank is psychic to know you are buying a convention centre for the weekend, never assume the bank is psychic to know the money received from a licenced exchange is yours, and the MOVEMENT of the fund outwards away from your bank is not another money movement, but a product puchase.

especially if its over $1000 in one go.

I think you are correct on #1 but incorrect on #2 (or at least there may be state differences).  I have received and sent sums to different banks a few times and not heard a peep from the bank or state for that matter. For what its worth they were payments and not solely money transmission and I think that is the point. There can be no payments without money transmission, otherwise the economy would cease to be.

A business or foundation or private citizen shouldn't have to concern themselves with these regulations as they are all customers of the banks which handle these transmissions for purpose (aka payment). I think D&T has it right.

This is false.  Money transmission is money transmission regardless of the dollar amount.  One doesn't need any kind of license to pay $50,000 or $300,000 or $50,000,0000 worth of goods of services.   One needs license if engaged in money transmission of any amount, even $1.99.


False.



This is your dubious claim you keep passing off as fact.  Then again given the non stop material innacuracies it isn't really surprising.  You do realize your false information could result in another person suffering legal harm, if they foolishly assume you are knowledgable. You should stop as you clearly lack a willingesss to say "I don't know" when you lack the facts.


False. Selling goods and services isn't money transmission.  Money transmission is money transmission.  Payments are payments.


I doubt it but pretty much all of it was incorrect, your opinion passed of as fact, or glosses over material details.

this thread has meandered off course.

my initial reply was concerning vladimirs thinking that the C&D order was related to programming an open source piece of software.
i replied by saying the INTERPRETATION was about money(FIAT) transfers into California.

i never once used the word "FACT"


back to the matter at hand.


this is all i will say on the matter

Thank you for admitting this is just a scenario constructed in your mind.   The state has indicated nothing of the sort and payments to vendors are just that payments not a money transfer business.

I never claimed to know why CA launched the C&D.  There are lots of potential reasons (including ignorance by the regulator) however whatever the reason it is clear you are simply ASSUMING this has something to do with the conference.    That is quite a leap but to pass it off as fact is just downright shady.

i am UK based and based on ACTUAL conversations with FSA/HMRC (which also is linked to european laws) that is THEIR assertion of how to class bitcoin, based on THEIR opinion at the time.

it has also been noted that americans who ACTUALLY talk to accountants and know the difference between a commodity and an asset. have came to similar conclusions related to american laws.

bitcoin is neither of these.

money: is a coin or paper minted/printed with a recognised symbol of government ownership (£$), minted/printed value and is legal tender within the country which owns that recognisable symbol. (in short FIAT)
commodity: is a raw material used in the production of other products.

bitcoin however IS:
currency: is an item used as a means of trade
asset: a personal/business possession which holds value.

now that is sorted out.. from the californian banks point of view, as they are not psychic, all that see is the convention centre receive a large deposit (above the threshold which causes a flag) which on investigation came from TBF. then tracing the funds back. they obviously seen more then 1 hop (bitinstant handing TBF the funds and the bitcoin foundation MOVING the funds)

again the californian banks are not psychic to know that before bitinstant (example) bitcoins came from TBF. all they see is TBF receive a lump sum. and pass it on.

it is now for TBF to inform the californian banks/state regulators as to the actual events that occured.

and as for the carrot scenario. if you received $10,000 for carrots. and then spent $700 paying rent, 10 months in a row ($7k) and $300 a month on fast food. they would consider this fine.. no red flags.

but if they seen you receive $10k and you passed that $10k in full directly onto another person.. red flag.
they would ask you to cease and desist doing future large movements. and to explain what this strange payment was for.

which you can then explain it was a sale of carrots to pay down a $10k mortgage. .. the money would then be released.

here we go again. spit for spat both trying to correct each other based on the limited information available to both of us. but here goes the scenario i am reading

names are used are for examples for explanation. not fact.

bitcoins moved from bitcoin foundation 'pot' (addres) to bitinstant
large amount of FIAT moves from bitinstant to a bank account owned by a BF member
large amount of FIAT moves from a BF member to californian convention centre.

receipt from convention centre shows BF as the payer.

so movement of funds from bitinstant to BF member shows up as not a product/service purchase. the money then moves again in full to another bank account..

FLAG potential risk.

banks have many triggers.
EG if you received $10k and spent it at walmart 7-11 the bank would say low risk and treat it as income.
EG if you received $10k and the same day moved the exact $10k to nother bank in another state.. FLAG - potential risk.

initial investigation would show BF does not have a licence.

Everyone said the world was flat too.  "Everyone" is a very weak argument.  Payments are not money transfers.  Never have been.  Paying for a convetion center doesn't require a money transfer.  It requires a payment. 

Now if the Bitcoin Foundation ran a business where persons could deposit cash or other monetary value and the Foundation would make a PAYMENT ON THEIR BEHALF to a convention center .... THAT would be money transmission.

Your logical train is:
a) Bitcoin Foundation had a conference
b) Bitcoin Foundation received a C&D
ergo the conference caused the C&D.

I ate tacos.
I got a notice from the state of VA regarding money transmission
ergo eating tacos results in regulatory action.

try reading wire transfer regulations, money transmission regulations. and then put it into context of what everyone is saying about it being linked to the hiring of the convention centre.

Imaginary-land.

None of that is right.  Spending money is spending money it isn't money transmission.   Otherwise anyone, anyplace, any purchase would always be money transmission.  Funds always move in the sale of goods and services.

CA contention is that the Bitcoin Foundation is running a business that for profit transmits money.  Obviously that is false but it had nothing to do with spending too much money.  I mean did you honestly think this is the first business in the history of the CA to pay for a convention there.

Where are you guys getting this

Has anything other than the cease & desist been released to clarify "California's line of thinking"?

the actual interpretation is that bitcoin foundation moved fiat across state lines into california as a business to pay for the convention centre. so the large (above $1000 in a single transaction) to a Californian bank from a business created a risk flag.

I agree with you. You first and if you're not arrested I'll go next.