Effective the May 31st, 2013 Tangible Cryptography has suspended new purchases of Bitcoins through our service FastCash4Bitcoins. We take this step in response to a notice received on the same day from the Commonwealth of Virginia that a complaint has been made that our company is operating as an unlicensed money transmitter.
The Virginia Corporation Commission did an initial investigation in response to the complaint, and determined that our activity may constitute money transmission under Virginia law. The Commission's initial assessment has factual errors which we intend to address. The notice indicated that it appears that our company is issuing Bitcoins through the use of the website https://fastcash4bitcoins.com , which may constitute "sale of issuance of stored value" under Virginia law.
As our clients are well aware this is simply an incorrect assessment of our business activity. The site is used to facilitate the purchase of Bitcoins from clients. Tangible Cryptography is acting as a buyers not issuer of virtual currency. Furthermore there is no obligation for redemption, or holding of customer funds, as would occur in a stored value system. The view that buying, selling, or even issuing new Bitcoins would be seen as stored value is at odds with the guidance from FinCEN earlier this year, that exchangers (and issuers) of virtual currency are not issuers of prepaid access (stored value).
The company has been given thirty days to provide written explanation on why our activity is exempt from licensing under current law. The commission has formally stated that unless exempt from licensing we must stop further activity until such time as we apply for and obtain a Money Transmitter license. The prudent action is for the company to suspend all new transactions while we respond to the Commission's notice
We want to reassure our valued clients that all completed transactions have been paid. At this time there has been no freeze, hold, or closure of our payment accounts. We are one of the few Bitcoin related enterprises which can definitively say that to date, no client has lost funds as a result of theft, hacking, or fraud through fault or negligence by Tangible Cryptography or the services it provides. The future and direction of Tangible Cryptography will depend on the outcome of our response to the Virginia Corporation Commission. While we hope for a timely resolution we recommend our existing clients make alternative arrangements as it is difficult to provide an estimate on how long such a resolution may take.
Staff
Tangible Cryptography, LLC
The Virginia Corporation Commission did an initial investigation in response to the complaint, and determined that our activity may constitute money transmission under Virginia law. The Commission's initial assessment has factual errors which we intend to address. The notice indicated that it appears that our company is issuing Bitcoins through the use of the website https://fastcash4bitcoins.com , which may constitute "sale of issuance of stored value" under Virginia law.
As our clients are well aware this is simply an incorrect assessment of our business activity. The site is used to facilitate the purchase of Bitcoins from clients. Tangible Cryptography is acting as a buyers not issuer of virtual currency. Furthermore there is no obligation for redemption, or holding of customer funds, as would occur in a stored value system. The view that buying, selling, or even issuing new Bitcoins would be seen as stored value is at odds with the guidance from FinCEN earlier this year, that exchangers (and issuers) of virtual currency are not issuers of prepaid access (stored value).
The company has been given thirty days to provide written explanation on why our activity is exempt from licensing under current law. The commission has formally stated that unless exempt from licensing we must stop further activity until such time as we apply for and obtain a Money Transmitter license. The prudent action is for the company to suspend all new transactions while we respond to the Commission's notice
We want to reassure our valued clients that all completed transactions have been paid. At this time there has been no freeze, hold, or closure of our payment accounts. We are one of the few Bitcoin related enterprises which can definitively say that to date, no client has lost funds as a result of theft, hacking, or fraud through fault or negligence by Tangible Cryptography or the services it provides. The future and direction of Tangible Cryptography will depend on the outcome of our response to the Virginia Corporation Commission. While we hope for a timely resolution we recommend our existing clients make alternative arrangements as it is difficult to provide an estimate on how long such a resolution may take.
Staff
Tangible Cryptography, LLC