Topic: License for entering the business of money transmission (Read 6169 times)

It looks like Texas has cancelled MSB license rental in that state.
https://www.linkedin.com/today/post/article/20141014163134-184694-msb-licenses-for-rent-not-in-texas


_____

Adam Atlas

I'm not sure, but I do know that exchanging $ ro Euro is not the same as exchanging bitcoins as they have specifically set a set of guidelines for Virtual Convertible Currencies - such as bitcoin.

Ok Franky, so let's say I wanted to run a business that compete with D&T and I do not want to learn the hard way.  What is it that someone needs to know from your post of the MSB Exam Manual?

This guidance refers to the participants in generic virtual currency arrangements, using the terms “user,” “exchanger,” and “administrator.”6 A user is a person that obtains virtual currency to purchase goods or services.

Doesn't this mean that using bitcoins to buy something (i.e. conference center) would mean they are a user not an exchanger or administrator?

Edit: i found quotes from fincen to correct 'death and taxes' because due to him also running a MSB business its in his interest to know the brutal truth.

but now ill let him leearn the hard way.

quotes deleted

ill just leave him this to re-learn the truth
http://www.fincen.gov/news_room/rp/files/MSB_Exam_Manual.pdf

(to show i atleast half helped him)

I've never dealt with the Bitcoin Foundation, but if they're goofy enough to have such inept head counsel, what if their choice of representation is just as bad when they shop for a lawyer to sue their lawer
Edit:  Turtles all the way down...

That is assuming that the above is true. Can someone confirm that they did indeed use BitInstant? If thats the case then yes their counsel is completely incompetent, and I would def. sue his slacker ass for potentially throwing my ass in jail. He probably read Fincens guidence once and said "I got this" pulling up his big boy pants, while the rest of us mere mortal peons had to read it a few times to double check the meanings.

Maybe the Bitcoin Foundation is planning to sue its head counsel for gross incompetence
/where's that popcorn

Yes it does when it's clearly written in plain english. Secondly, having the wrong interpertation even if it wasnt clearly written stillshows his incompetence. Thirdly, the biggest show of incompetence is him allowing the foundation to convert BitCoin directly into Fiat to pay for the convention center, which would put them into MSB status.

Does having a different interpretation mean he's incompetent?

I love how the head counsel for the BitCoin foundation is incompetent. He said all miners are MSB's when FinCen made it clear they are only MSB's when they convert into Fiat. I would be scared if I was the foundation right now lol.

If BitCoin foundation converted BitCoin into Fiat, that is the reason for the C&D according to FinCen guidance which makes them an MSB. If this did not happen than who knows why, but from my understanding of reading the posts here, is they converted BitCoin into Fiat.

Most states require a License even if you don't have a physical location in there State. http://moneytransmitterlicense.blogspot.com/2010/01/money-transmitter-license-information.html

http://beforeitsnews.com/alternative/2013/03/realtime-bitcoin-fincen-issues-guidance-on-virtual-currencies-and-regulatory-responsibilities-2599120.html

The Financial Crimes Enforcement Network (“FinCEN”) is issuing this interpretive guidance to clarify the applicability of the regulations implementing the Bank Secrecy Act (“BSA”) to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.1 Such persons are referred to in this guidance as “users,” “administrators,” and “exchangers,” all as defined below.2 A user of virtual currency is not an MSB under FinCEN’s regulations and therefore is not subject to MSB registration, reporting, and recordkeeping regulations. However, an administrator or exchanger is an MSB under FinCEN’s regulations, specifically, a money transmitter, unless a limitation to or exemption from the definition applies to the person. An administrator or exchanger is not a provider or seller of prepaid access, or a dealer in foreign exchange, under FinCEN’s regulations.

Currency vs. Virtual Currency

            FinCEN’s regulations define currency (also referred to as “real” currency) as “the coin and paper money of the United States or of any other country that is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance.”3 In contrast to real currency, “virtual” currency is a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency. In particular, virtual currency does not have legal tender status in any jurisdiction. This guidance addresses “convertible” virtual currency. This type of virtual currency either has an equivalent value in real currency, or acts as a substitute for real currency.

Background

            On July 21, 2011, FinCEN published a Final Rule amending definitions and other regulations relating to money services businesses (“MSBs”).4 Among other things, the MSB Rule amends the definitions of dealers in foreign exchange (formerly referred to as “currency dealers and exchangers”) and money transmitters. On July 29, 2011, FinCEN published a Final Rule on Definitions and Other Regulations Relating to Prepaid Access (the “Prepaid Access Rule”).5 This guidance explains the regulatory treatment under these definitions of persons engaged in virtual currency transactions.

Definitions of User, Exchanger, and Administrator

This guidance refers to the participants in generic virtual currency arrangements, using the terms “user,” “exchanger,” and “administrator.”6 A user is a person that obtains virtual currency to purchase goods or services.7 An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency. An administrator is a person engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.
 Users of Virtual Currency

A user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN's regulations.8 Such activity, in and of itself, does not fit within the definition of "money transmission services" and therefore is not subject to FinCEN's registration, reporting, and recordkeeping regulations for MSBs.9

Administrators and Exchangers of Virtual Currency

An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person.10 FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. 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."11

The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies. Accepting and transmitting anything of value that substitutes for currency makes a person a money transmitter under the regulations implementing the BSA.12 FinCEN has reviewed different activities involving virtual currency and has made determinations regarding the appropriate regulatory treatment of administrators and exchangers under three scenarios: brokers and dealers of e-currencies and e-precious metals; centralized convertible virtual currencies; and de-centralized convertible virtual currencies.

a. E-Currencies and E-Precious Metals

The first type of activity involves electronic trading in e-currencies or e-precious metals.13 In 2008, FinCEN issued guidance stating that as long as a broker or dealer in real currency or other commodities accepts and transmits funds solely for the purpose of effecting a bona fide purchase or sale of the real currency or other commodities for or with a customer, such person is not acting as a money transmitter under the regulations.14

However, if the broker or dealer transfers funds between a customer and a third party that is not part of the currency or commodity transaction, such transmission of funds is no longer a fundamental element of the actual transaction necessary to execute the contract for the purchase or sale of the currency or the other commodity. This scenario is, therefore, money transmission.15 Examples include, in part, (1) the transfer of funds between a customer and a third party by permitting a third party to fund a customer's account; (2) the transfer of value from a customer's currency or commodity position to the account of another customer; or (3) the closing out of a customer's currency or commodity position, with a transfer of proceeds to a third party. Since the definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies, the same rules apply to brokers and dealers of e-currency and e-precious metals.

b. Centralized Virtual Currencies

The second type of activity involves a convertible virtual currency that has a centralized repository. The administrator of that repository will be a money transmitter to the extent that it allows transfers of value between persons or from one location to another. This conclusion applies, whether the value is denominated in a real currency or a convertible virtual currency. In addition, any exchanger that uses its access to the convertible virtual currency services provided by the administrator to accept and transmit the convertible virtual currency on behalf of others, including transfers intended to pay a third party for virtual goods and services, is also a money transmitter.

FinCEN understands that the exchanger's activities may take one of two forms. The first form involves an exchanger (acting as a "seller" of the convertible virtual currency) that accepts real currency or its equivalent from a user (the "purchaser") and transmits the value of that real currency to fund the user's convertible virtual currency account with the administrator. Under FinCEN's regulations, sending "value that substitutes for currency" to another person or to another location constitutes money transmission, unless a limitation to or exemption from the definition applies.16 This circumstance constitutes transmission to another location, namely from the user's account at one location (e.g., a user's real currency account at a bank) to the user's convertible virtual currency account with the administrator. It might be argued that the exchanger is entitled to the exemption from the definition of "money transmitter" for persons involved in the sale of goods or the provision of services. Under such an argument, one might assert that the exchanger is merely providing the service of connecting the user to the administrator and that the transmission of value is integral to this service. However, this exemption does not apply when the only services being provided are money transmission services.17

The second form involves a de facto sale of convertible virtual currency that is not completely transparent. The exchanger accepts currency or its equivalent from a user and privately credits the user with an appropriate portion of the exchanger's own convertible virtual currency held with the administrator of the repository. The exchanger then transmits that internally credited value to third parties at the user's direction. This constitutes transmission to another person, namely each third party to which transmissions are made at the user's direction. To the extent that the convertible virtual currency is generally understood as a substitute for real currencies, transmitting the convertible virtual currency at the direction and for the benefit of the user constitutes money transmission on the part of the exchanger.

c. 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.

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.

Providers and Sellers of Prepaid Access

A person's acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies. 18

Dealers in Foreign Exchange

A person must exchange the currency of two or more countries to be considered a dealer in foreign exchange.19 Virtual currency does not meet the criteria to be considered "currency" under the BSA, because it is not legal tender. Therefore, a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations.

http://beforeitsnews.com/alternative/2013/03/realtime-bitcoin-fincen-issues-guidance-on-virtual-currencies-and-regulatory-responsibilities-2599120.html

With no lights and a drum of canola oil

Everything except franky1's posts. It actually flows pretty well when you ignore him.

You read all of it? 

I'm glad D&T isn't quoting, so I only have to read his side of the conversation.

You two should get a room.

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.

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!