I hope you are right that it is no different than operating a Bitcoin node.
I found this on the IRS website. ( It is only the US and the US is a small part of the world)
https://www.irs.gov/payments/third-party-network-transactions-faqs
Characteristics of a third party payment network include:
* The existence of a central organization with whom a substantial number of providers of goods and services (who are unrelated to the central organization) have established accounts
* an agreement between the central organization and the providers to settle transactions between the providers and purchasers
* the establishment of standards and mechanisms for settling such transactions, and
* the guarantee of payment in settlement of such transactions.
Topic: LN hubs as money transmitters under FinCEN regulatory requirements? (Read 161 times)
December 21, 2017, 06:43:43 PM
December 21, 2017, 06:27:36 PM
Anyone have an opinion or know anything about this?
as i read it, here is the pertinent law with regard to money transmission:
https://www.law.cornell.edu/uscode/text/18/1960
Quote
(1) the term “unlicensed money transmitting business” means a money transmitting business which affects interstate or foreign commerce in any manner or degree and—
(C) otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity;
(2) the term “money transmitting” includes transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier
(C) otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity;
(2) the term “money transmitting” includes transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier
with regard to commerce, i don't see any substantive difference between LN nodes and bitcoin nodes. in both cases, nodes propagate transactions across the network. they don't substantively affect buying/selling. in the case of LN nodes, operators are just being compensated for bandwidth use.
LN nodes don't intuitively know anything about illicit funds. routing is such that nodes don't know where transactions are from or where they are going. they can only identify the "hops" in between. so that clause seems like a non-issue.
it's the "transferring funds on behalf of the public" that leaves me scratching my head. i suspect that it doesn't apply because LN nodes aren't really transferring funds. they are transferring hash images that relinquish control of other people's funds. it's a very interesting legal issue. but again, no matter what the conclusion is, i don't see how this is fundamentally different than bitcoin nodes.
December 21, 2017, 06:09:03 PM
Anyone have an opinion or know anything about this?
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