Topic: [No] Did FinCEN overstate the money transmitter definition in their guidance? (Read 2996 times)
August 09, 2013, 01:10:21 AM
D&T, haven't you already argued people out of your initial interpretation, or was that someone else? LOL
August 08, 2013, 10:06:10 PM
Don't be embarrassed. Be embarrassed when you do that in a brief and then have to dance around it in front of a judge on oral argument.
But call me first. I've done it more times than I care to admit. I can pretty much walk you through it
But call me first. I've done it more times than I care to admit. I can pretty much walk you through it
August 08, 2013, 06:46:18 PM
On edit: DOH. I realized somehow I had window open with outdated (2009) version of the regs. Well prior to 2011 when the reg was updated it would have been a decent argument. The latest version of the regs however are symmetric so no joy there.
Since you can't delete anything from this forum I will leave the original incorrect post below so everyone can see my mistake.
Quote
5) Money transmitter —(i) In general. (A) A person that provides money transmission services. 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. “Any means” includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system
Since you can't delete anything from this forum I will leave the original incorrect post below so everyone can see my mistake.
Quote
I was rereading the Bitcoin Foundation's response to DFI and the section dealing with the asymmetry of the MT law in CA. At first it caused me to first say "man I wish the federal law was written similarly" and then made me check to see what the wording actually was.
In the guidance dated FinCEN states
http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
However what does the actual regulate states.
http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=a7e1bef2c8dbac0d6893186f0c01390c&n=31y3.1.6.1.2&r=PART&ty=HTML#31:3.1.6.1.2.1.3.1
Removing the aspects not in dispute it becomes:
The actual definition doesn't provide three criteria for accepting and transmitting as the guidance indicates but rather two criteria for accepting and a third criteria for transmitting.
Accepting:
a) currency
b) funds denominated in currency
AND
Transmitting
a) currency
b) funds
c) the value of the currency or funds
Note that despite the statement in the guidance the actual reg does not define a money transmitter as one who accepts "the value of the currency or funds" that is only included in the definition for transmission. One could argue this is merely an oversight by FinCEN however this particular reg has been updated three times. If the reg was intended to state the following as FinCEN claims they why doesn't it?
Reg 31 CFR § 1010.100(ff)(5)(i)(A) as implied by FinCEN's guidance (the bolded portion is absent from the actual regulation).
In the guidance dated FinCEN states
Quote
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
11)
31 CFR § 1010.100(ff)(5)(i)(A).
11)
31 CFR § 1010.100(ff)(5)(i)(A).
http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
However what does the actual regulate states.
Quote
31 C.F.R. 103.11(uu)(5)
(5) Money transmitter— (i) In general. Money transmitter:
(A) Any person, whether or not licensed or required to be licensed, who engages as a business in accepting currency, or funds denominated in currency, and transmits the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution, a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both, or an electronic funds transfer network;
(5) Money transmitter— (i) In general. Money transmitter:
(A) Any person, whether or not licensed or required to be licensed, who engages as a business in accepting currency, or funds denominated in currency, and transmits the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution, a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both, or an electronic funds transfer network;
http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=a7e1bef2c8dbac0d6893186f0c01390c&n=31y3.1.6.1.2&r=PART&ty=HTML#31:3.1.6.1.2.1.3.1
Removing the aspects not in dispute it becomes:
Quote
accepting currency, or funds denominated in currency, and transmits the currency or funds, or the value of the currency or funds
The actual definition doesn't provide three criteria for accepting and transmitting as the guidance indicates but rather two criteria for accepting and a third criteria for transmitting.
Accepting:
a) currency
b) funds denominated in currency
AND
Transmitting
a) currency
b) funds
c) the value of the currency or funds
Note that despite the statement in the guidance the actual reg does not define a money transmitter as one who accepts "the value of the currency or funds" that is only included in the definition for transmission. One could argue this is merely an oversight by FinCEN however this particular reg has been updated three times. If the reg was intended to state the following as FinCEN claims they why doesn't it?
Quote
Any person, whether or not licensed or required to be licensed, who engages as a business in accepting currency, or funds denominated in currency, or other value that substitutes for currency and transmits the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution, a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both, or an electronic funds transfer network
Reg 31 CFR § 1010.100(ff)(5)(i)(A) as implied by FinCEN's guidance (the bolded portion is absent from the actual regulation).
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