Topic: License for entering the business of money transmission - page 3. (Read 6114 times)

they keep messing with us, its time we start messing with them.





http://thebitcoinnews.co.uk/2013/06/20/your-bitcoin-wallet-is-being-tracked-by-feds/




maybe start tracking each fed and posting what they do each minute of their life.


what is good for the goose is also good for the gander.


sorry this had to be posted--i know some will hate it and that is their right to do so. this is my right and therefore i did it.

+1 and
There's a pretty schizoid outlook on this forum.  Words like "government" & "statism" are used as pejoratives, and at the same time laws are expected to be appropriate, just & rational. When a cruiser with the words "to serve and protect" pops up in your rearview mirror, are you expecting it to "serve and protect"

Thank you for all these answers. I'll check the Legal forum for more.

Your overhead is not the states concern. If the state cared they would make it a lot easier for small start ups to stay in business.

This law isn't here because govt expects everyone to run out and register. I doubt most people would be approved anyway. In fact, I doubt they care if you register. This gives them the ability to prosecute whenever they want and let's them set up Bitcoin politically as a rouge group of criminals operating outside the law. Then they need to spend no money attempting to fight Bitcoin, there will be no government super computers attacking the network but instead a slow propaganda campaign that erodes the user-base or at least keeps "the problem" from growing.

We address these issues in the legal subforum, mostly. 

In sum, there are two regulatory regimes that govern most bitcoin businesses: Money Transmission and Securities:

Money transmission is regulated on the state and federal levels.  The federal level is straightforward.  Miners (who convert to fiat) and Exchangers (who buy or sell BTC as a business) are considered "money transmitters" by FinCEN, the government agency that administers the Bank Secrecy Act.  These businesses must register with FinCEN as money services businesses, and design and implement Anti-money laundering (AML) and Know your Customer (KYC) policies.  The state level is more complex.  Any state in which your business solicits customers or transacts business - whether or not your business is physically located there - will require a license in that state.  These licenses are expensive and time-consuming.  Also, they are not granted automatically; money transmission is a privilege under most states' laws, not a right.

Securities are regulated on the state and federal levels as well.  Most of the perpetual mining bonds and "shares" of "companies" being sold in the securities forum here on the boards are unregistered, restricted securities.  They also don't provide the kinds of disclosures that issuing companies are required to provide.  That's lawyer talk for "illegal".  These issuances would likely be legal, if their issuers would file the appropriate paperwork to comply with the rules.  Unfortunately, there is not enough money involved yet to make a lawyer worth it.  Until then, it's casual securities fraud.

The foregoing was a very general explanation of the regulatory regimes that apply to BTC businesses.  If you have more specific questions, I would suggest looking into the legal subforum.  There is a lot of very granular detail in the posts there.  Hope this helps!

I am currently in the process of establishing my LLC and registering as a proper MSB. I should probably keep a blog of that somewhere for people's use and help.

I'm already somewhat along in the process and one of the challenges that I have come across is the following: FinCen's letter back in May was the first type of guidance (any guidance) and that's for the federal level. The general legal consensus is that at the STATE level there would have to be similar position statements about virtual currency. Some states may say, "you must register with us" others may say, "we dont care about virtual currency, you just need to be OK with FinCen". So that's a little unclear right now at the state level and it could take YEARS for all 50 states to have something in place. State registration is the safe play, but it may ultimately be unnecessary depending on the position your individual state takes.

Not in the eyes of those who created this system: The established power structures. They don't like competition you see, so they're essentially making it impossible for a small honest business to succeed in this market.


Yes, now all miners should register as MSBs, even those who mine 0.1BTC pr. month - this makes a lot of sense, and there's no overhead associated with it at all..

According to Patrick Murck, General Counsel for the Bitcoin Foundation, anyone that mines Bitcoin needs an MSB license.


http://www.thegenesisblock.com/town-hall-discussion-with-gavin-andresen-and-patrick-murck/

My understanding is that it needs a license for each state it does business in.
Yes it is absurd and we need a change to federal law.

CampBX for example I believe only has the licenses in Georgia which means that they could get in trouble with the State of California for people like me who do business with them.

Part of me wants to see it happen so it can go to trial and hopefully get clarified but I don't want to wish that on anyone.

My hope is that an exchange needs a license only in the state where it's headquartered, and nowhere else.
If you're on the East coast, you should be able to run a web-based business with customers from California without any license from CA. This used to be a principle, and it should not be different with BTC.

that's absurd

You will need separate licenses, I guess your legal fees and professional services fees will be extremely high

This is a follow-up to the discussion about the Bitcoin Foundation which receives a cease and desist order from California.

So I understand that you need a license for the business of money transmission, but I think the subject needs to be clarified. Sadly, I have more questions than answers.

My belief is that only exchanges need a license. Is this correct?

Do all states require such a license, or only California?

Is it possible to get a nation-wide license, say maybe from Delaware? If not, it means that an exchange would need to get a license from all 50 states to do business in the whole country. What a bureaucratic nightmare!