Topic: Oh NO!!! https://fastcash4bitcoins.com/ SUSPENDS THEIR BUSINESS (Read 2229 times)

I was just reading over the National Money Transmitters Association website and I interpreted things a little differently. It looks as if Montana and South Carolina are the only two truly unregulated states.

New Mexico has regulation regarding checks and money orders.

Just thought I'd point that out.

http://www.urbandictionary.com/define.php?term=cruft

The sooner we're rid of this cruft the better.

Because they pay taxes and fees?

what did you take from the panel or did you not watch? (besides being complicated)

I guess it is nothing much, they put up an explanation, they just need to clarify the nature of their business and that's it.  Just have to wait for them to do the paperwork.

It looks very complicated 
Pelle Braendgaard & Panel Bitcoin 2013 

Although that's true, those kinds of businesses are often regulated under other financial services laws which require AML/KYC compliance (even jewellers are now required to report large transactions in many FATF member countries).  The FinCEN guidance statement doesn't really limit the application of financial services regulations to Bitcoin enterprises.  A business may successfully argue that it isn't a money transmitter, only to find that it needs some other kind of financial services licence to operate (the examples you gave are regulated).

You can be pissy sometimes but I have to admit that I appreciate your explanations on a variety of subjects. This is concise, well thought out and educational. 

It depends on who's definition.  Generally speaking well written statutes will define key terms but there are a lot of horribly written laws on the books.  At the federal level it is defines as:


http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=1874ed9b8ba25f5cf9527e5e39a28df8&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.1.3.1

FinCEN guidance in April states that it is their interpretation that the conversion of virtual currency into real currency or real currency into virtual currency meets this definition.

In WA (for the purpose of state laws/regs/licensing) however it is defined simply as this:

Hmm.  Well that doesn't tell us a whole lot.  Lets see if money transmission is defined.


Does exchanging BTC for USD meets this definition.  Well it depends on what "money" is doesn't it.  Luckily that is defined as well.


So is Bitcoin "money" under WA law?  Well a case could be made that it isn't as no government, international body, intergovernmental organization has stated Bitcoin is "money".   Virtual currency yes but money no.  Still WA is one of those states that likely it won't be decided until either it ends up in court or the law is ammended to be more explicit.

Lets look at another example state, Utah:


Key word is "for the purpose of payments to third parties.  If there is no third party then is there a money transmitter?  This isn't legal advice but a credible case could be made that a company (the first party) buying Bitcoins from you (the second party) and paying the proceeds in USD to the same party (you) would not meet the definition of money transmitter under UT law.  

Some states are just mute on the entire topic.  In Alaska's general code for example the words "money transmitter" simply don't exist.  Under Alaskan law there is no such thing as a money transmitter any more then there is a flux capacitor repairman.

TL/DR:  So the answer really depends on "according to who" and in what context.  The important thing is that no two states define "money transmitter", "money transmission", or even "money" the same.  Some definitions are very specific and exclude Bitcoin by omission, some definitions like WA are vague and really can only be definitively decided in court.  Some definitions are so asininely broad that "money transmission" could include just about anything including the buying, selling, or exchanging of bennie babies ... if a prosecutor so wanted.  
    
    
DISCLAIMER:  I AM NOT A LAWYER.  IF YOU NEED LEGAL ADVICE ON YOUR PARTICULAR SITUATION THE ONLY ACCEPTABLE SOLUTION IS TO RETAIN INDEPENDENT LEGAL COUNSEL.  PERIOD.  The above post is just intended to be educational and highlight that context matters. 

In many states, money orders are considered money transmission.  In Pennsylvania, money transmission only means money orders.  It's fairly certain that the PA legislature wasn't thinking of the internet when they passed that law in 1965.

then what is a money transmitter

A currency dealer buys and sells foreign currency.  Are they a money transmitter?
A precious metals dealer buyers and sells precious metals.  Are they are money transmitter?
A money order issuers, buys and sells (issues and redeems) money orders.  Are they a money transmitter?
A stock broker buys and sells financial instruments.  Are they a money transmitter?

(The answer for all four of these is no).

notice something?

Well Federal Regs ALWAYS apply no matter what state you are in unless the activity is limited to intrastate and I am sure the feds will even argue that point (banking networks are interstate, national banks are interstate, etc).  On the state level it is far more complex.  Many states regulate out of state entities which provide services to the resident of the state.  Some don't and only regulate entities within a physical presence in the state.  The two states above don't have any regs on MTs.  The definitions of every state are slightly different meaning an activity could fall within the definition in one state and not in another.  The US Virgin Islands, Puerto Rico, and DC also license MTs so although 2 states don't there are 51 licenses total  (plus finCEN registration).  For lack of a better term it is a giant mess because the Feds "shouldn't" regulate economic activity inside a state and states shouldn't regulate activity between the states however both do so you end up with up to 55 different agencies all regulating the same thing.

So honestly this is why most entities just take 2 years, spend $10M and get a license in all states which have one regardless of it they need to or not.  

so DT do you know if any exchanges are trying to start in those states? or would that not matter because of federal regulations

New Mexico & South Carolina.

the physical difference that makes them 'just a buyer/seller' rather than money transmitter

interestingly, kepdia says only 48 states regulate money transmitters,
so what are the 2 states that do not?

http://en.wikipedia.org/wiki/Money_transmitter

It makes a big difference to the US government. A money transmitter has to be highly regulated to prevent laundering.

what is the difference?