Thought #2: I can use remote attestation capable trusted computing hardware to prove to someone else that I haven't kept a copy of the private key I gave them, thus allowing for funds held at an address to be passed from one person to another. This trusted hardware doesn't even need to be Bitcoin specific, essentially any DRM technology can be used in this manner. The DRM doesn't need to be very good either if you use fidelity bonds to limit the maximum return on fraud.
Is the maker of the hardware now a money transmitter? They might not even know their hardware is being used for that purpose.
Topic: So bitzino and any tx's off the blockchain are now money transmitters (Read 1853 times)
March 20, 2013, 01:14:27 PM
March 20, 2013, 01:02:43 PM
Does this mean all wallet services at all are money transmitters?
Take blockchain.info for example. Right now the way they work is they store an encrypted copy of your wallet, AKA your secret keys, and provide you with some software that can decrypt that information and create signed transactions using those keys. Obviously they're not acting as a money transmitter right? All they do is provide you with a way to store some data, and provide some software for you to run.
Lets say they add a new security feature to help protect you against malware. Now the way blockchain.info works is they store all your coins in P2SH multisig addresses. One of the pubkeys is based on a secret key in your wallet, the other one is blockchain.info's secret key, not in your wallet. In addition for every transaction you have to approve it somehow, lets say by sending a text message to your phone. When blockchain.info gets the text message they sign your incompletely signed transaction, making it valid. You can argue they are not acting as money transmitters, they're just adding some additional security and have no way of moving the coins without your approval. After all, how is it any difference from a parent providing their teenager with a wallet that requires the parents approval to spend money? Sounds reasonable to me.
Of course, obviously it needs to be possible to change the method by which you submit your final approval for the transaction. Since it can be changed, I can now securely give someone coins by simply changing that approval code or phone number or whatever to one that only they can control, not me.
Take blockchain.info for example. Right now the way they work is they store an encrypted copy of your wallet, AKA your secret keys, and provide you with some software that can decrypt that information and create signed transactions using those keys. Obviously they're not acting as a money transmitter right? All they do is provide you with a way to store some data, and provide some software for you to run.
Lets say they add a new security feature to help protect you against malware. Now the way blockchain.info works is they store all your coins in P2SH multisig addresses. One of the pubkeys is based on a secret key in your wallet, the other one is blockchain.info's secret key, not in your wallet. In addition for every transaction you have to approve it somehow, lets say by sending a text message to your phone. When blockchain.info gets the text message they sign your incompletely signed transaction, making it valid. You can argue they are not acting as money transmitters, they're just adding some additional security and have no way of moving the coins without your approval. After all, how is it any difference from a parent providing their teenager with a wallet that requires the parents approval to spend money? Sounds reasonable to me.
Of course, obviously it needs to be possible to change the method by which you submit your final approval for the transaction. Since it can be changed, I can now securely give someone coins by simply changing that approval code or phone number or whatever to one that only they can control, not me.
March 20, 2013, 07:48:26 AM
nTimeLock will poke a stick in this silly law.
There is NO law, yet.
March 20, 2013, 07:29:54 AM
Thanks. Yeah, that is a little weird. It seems to go against that they said before, which implied that unless you were exchanging for fiat they didn't care.
March 20, 2013, 07:22:15 AM
Where is that quote from? It doesn't appear in this text as far as I can tell:
http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf
I think a service simply facilitating use by users as defined in the released document wouldn't be forced to do anything, just like individual users aren't MSBs. Anyone who directly exchanges for fiat, on the other hand, would be regulated.
http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf
I think a service simply facilitating use by users as defined in the released document wouldn't be forced to do anything, just like individual users aren't MSBs. Anyone who directly exchanges for fiat, on the other hand, would be regulated.
March 20, 2013, 07:21:24 AM
nTimeLock will poke a stick in this silly law. Soon, exchanges and sites like this will become decentralized and accessible locally. They can even be run on dim and darknets. It's fine to regulate on the fiat side, but once the blockchain is used, there can be no more effective regulation and they will just have to get over it and move on. Render unto Caesar what are Caesar's; and unto teh Blockchain all things Bitcoin. Amen.
March 20, 2013, 07:09:18 AM
Quote
Those who are intermediaries in the transfer of virtual currencies from
one person to another person, or to another location, are money transmitters that must register
with FinCEN as MSBs unless an exception applies.
one person to another person, or to another location, are money transmitters that must register
with FinCEN as MSBs unless an exception applies.
Doesn't this mean all those services we hoped would be built up around bitcoin to take transactions off the blockchain mean they are now money transmitters?
Doesn't this mean that the bitcoin tip bot, for instance, is now illegal... or going to be targetted by FinCEN?
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