Topic: Wait...Does the March 18th finCen legislation make it illegal to trade bitcoins? (Read 3875 times)
May 16, 2013, 10:56:20 AM
This is very possitive IMO. So under this regislation, bitcoin will mostly be used to be hoard or buy goods/services, and that is the most important step towards bitcoin's mainstream acceptance. When you can buy essntially everything on the planet with bitcoin, there is no need for an exchange
May 16, 2013, 10:33:28 AM
The person selling BTC for USD is a money transmitter if that person mined the BTC. IF they bought, they are a user as well.
"7 How a person engages in “obtaining” a virtual currency may be described using any number of other terms, such as
“earning,” “harvesting,” ”mining,” “creating,” “auto-generating,” “manufacturing,” or “purchasing,” depending on
the details of the specific virtual currency model involved. For purposes of this guidance, the label applied to a
particular process of obtaining a virtual currency is not material to the legal characterization under the BSA of the
process or of the person engaging in the process."
This would seem to indicate that it does not matter how you obtain the coins.
May 16, 2013, 09:56:26 AM
Also, it doesn't make it illegal to sell bitcoins, no one has actually clarified that I think.
You'd have to become an MSB if you sold dollars or pounds every time you went on holiday. There'd be a rush to buy duty free shit on the plane, from people that had foreign currency to spare.
MSB probably costs very little if anything. What probably costs a ton is, on exchanges all the official KYC documents that have to be filled out for each of your customers I don't know.
You'd have to become an MSB if you sold dollars or pounds every time you went on holiday. There'd be a rush to buy duty free shit on the plane, from people that had foreign currency to spare.
MSB probably costs very little if anything. What probably costs a ton is, on exchanges all the official KYC documents that have to be filled out for each of your customers I don't know.
It can also require being bonded in certain states.
Also its unclear if you have to register in every state your going to do business in.
This is why that think company is suing mtgox, because they aren't reg'd as MSB in CA and thus its unfair for them to be able to compete there.
May 16, 2013, 09:50:02 AM
Here is another article about the same issue:
http://www.forbes.com/sites/robertwood/2013/05/02/irs-takes-a-bite-out-of-bitcoin/
And here is a quote from the comments:
http://www.forbes.com/sites/robertwood/2013/05/02/irs-takes-a-bite-out-of-bitcoin/
And here is a quote from the comments:
Quote
Part of this is incorrect. I’ve called FinCEN several times and discussed if “miners” need to register as a Money Service Business. They do not.
The act of running a Miner and collecting Bitcoins is not a FinCEN concern. They want to know about the transfer between M1 and M3 types of money. Bitcoin is different than Facebook Points, Amazon dollars, or XBox points. They can be bought and sold for cash.
Anyone who uses LocalBitcoins.com must register. Anyone who runs a service like MtGox is a MSB. People who use MtGox are customers of a MSB and don’t need to register.
How will the IRS know if a profit is made using MtGox or Local Bitcoins? It’s likely that each individuals bank account will be flagged with AML alerts if there is a large ingress or egress of money. This triggers a FinCEN alert which might also go to the IRS.
The act of running a Miner and collecting Bitcoins is not a FinCEN concern. They want to know about the transfer between M1 and M3 types of money. Bitcoin is different than Facebook Points, Amazon dollars, or XBox points. They can be bought and sold for cash.
Anyone who uses LocalBitcoins.com must register. Anyone who runs a service like MtGox is a MSB. People who use MtGox are customers of a MSB and don’t need to register.
How will the IRS know if a profit is made using MtGox or Local Bitcoins? It’s likely that each individuals bank account will be flagged with AML alerts if there is a large ingress or egress of money. This triggers a FinCEN alert which might also go to the IRS.
May 16, 2013, 07:49:40 AM
Also, it doesn't make it illegal to sell bitcoins, no one has actually clarified that I think.
You'd have to become an MSB if you sold dollars or pounds every time you went on holiday. There'd be a rush to buy duty free shit on the plane, from people that had foreign currency to spare.
MSB probably costs very little if anything. What probably costs a ton is, on exchanges all the official KYC documents that have to be filled out for each of your customers I don't know.
You'd have to become an MSB if you sold dollars or pounds every time you went on holiday. There'd be a rush to buy duty free shit on the plane, from people that had foreign currency to spare.
MSB probably costs very little if anything. What probably costs a ton is, on exchanges all the official KYC documents that have to be filled out for each of your customers I don't know.
May 15, 2013, 09:21:23 PM
FinCEN's reach ends at fiat, there is nothing they can do if trade is done inter-system anyway, meaning one crypto to another.
If an exchange wants to convert BTC to USD, they must play by the rules or get shut down, just like any other USD exchange.
I still believe P2P exchange is a necessary move in terms of trading one coin for another, take that power away from places like Gox and leave them to handle fiat currency exchanges.
If an exchange wants to convert BTC to USD, they must play by the rules or get shut down, just like any other USD exchange.
I still believe P2P exchange is a necessary move in terms of trading one coin for another, take that power away from places like Gox and leave them to handle fiat currency exchanges.
agreed, we already have the technology to make a p2p exchange.
setup a Filezilla(ftp server) server and sell your items from home, use YaCy(p2p search engine). upload your directory to YaCy and boom your in business.
now if you need anonymity you'll need to run FreeNet and setup a page.
May 15, 2013, 08:46:22 PM
FinCEN's reach ends at fiat, there is nothing they can do if trade is done inter-system anyway, meaning one crypto to another.
If an exchange wants to convert BTC to USD, they must play by the rules or get shut down, just like any other USD exchange.
I still believe P2P exchange is a necessary move in terms of trading one coin for another, take that power away from places like Gox and leave them to handle fiat currency exchanges.
If an exchange wants to convert BTC to USD, they must play by the rules or get shut down, just like any other USD exchange.
I still believe P2P exchange is a necessary move in terms of trading one coin for another, take that power away from places like Gox and leave them to handle fiat currency exchanges.
May 15, 2013, 08:33:27 PM
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
so reading the guidelines. it is clear to me, that we do not have to worry.
Relax everybody, they just want to catch the people buying large quantities of World of Warcraft Gold, or Bitcoins.
They clearly made it into a regulation instead of a law, because they want casual people to use it for what it's intended for, buying stuff at your favourite merchant or buying virtual items...
they do not like people using it to launder money, from one location to another, the only way to do that is to exchange those bitcoins into cash, effectively your cash has just been cleaned, new cash new serial numbers to track.
though Bitcoin is a very bad option for that... the BlockChain ledger.
and don't forget the Guidelines apply to Fiat Currencies too... so if your exchanging money... they want to talk to you about your activities.
so your Golden, they want you to register, they want exchanges to comply, use virtual currencies freely, but please let us make sure you are legit, buy whatever you want, it's not illegal, exchange your currency, if they want to be dicks later, just don't do crazy 10,000 USD transactions.
so reading the guidelines. it is clear to me, that we do not have to worry.
Relax everybody, they just want to catch the people buying large quantities of World of Warcraft Gold, or Bitcoins.
They clearly made it into a regulation instead of a law, because they want casual people to use it for what it's intended for, buying stuff at your favourite merchant or buying virtual items...
they do not like people using it to launder money, from one location to another, the only way to do that is to exchange those bitcoins into cash, effectively your cash has just been cleaned, new cash new serial numbers to track.
though Bitcoin is a very bad option for that... the BlockChain ledger.
and don't forget the Guidelines apply to Fiat Currencies too... so if your exchanging money... they want to talk to you about your activities.
so your Golden, they want you to register, they want exchanges to comply, use virtual currencies freely, but please let us make sure you are legit, buy whatever you want, it's not illegal, exchange your currency, if they want to be dicks later, just don't do crazy 10,000 USD transactions.
May 15, 2013, 08:26:49 PM
Others in the forum have said that miners who sell their BTC through exchanges registered as MSBs are fine.
May 15, 2013, 08:15:29 PM
There is no "1,000 per day" threshhold to be considered a money transmitter:
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
Quote
No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
Honest question, does a 2 person exchange between USD and BTC count as a money transmission? I thought transmitters were the middlemen in the business of moving money from A to B.
The person selling BTC for USD is a money transmitter if that person mined the BTC. IF they bought, they are a user as well.
A person acting as the middleman between buyer and seller is a money transmitter and exchanger.
The person buying BTC is a user.
The $1000/day stipulation is regarding and exchanger exchanging two more or more foreign currencies up to $1000 total a day an MSB, The same definition states virtual convertible currencies are not included because they are not foreign currencies.
Thanks, this is clear now. The 1000 limit does not apply.
May 15, 2013, 08:00:15 PM
There is no "1,000 per day" threshhold to be considered a money transmitter:
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
Quote
No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
Honest question, does a 2 person exchange between USD and BTC count as a money transmission? I thought transmitters were the middlemen in the business of moving money from A to B.
The person selling BTC for USD is a money transmitter if that person mined the BTC. IF they bought, they are a user as well.
A person acting as the middleman between buyer and seller is a money transmitter and exchanger.
The person buying BTC is a user.
The $1000/day stipulation is regarding and exchanger exchanging two more or more foreign currencies up to $1000 total a day an MSB, The same definition states virtual convertible currencies are not included because they are not foreign currencies.
May 15, 2013, 07:53:21 PM
There is no "1,000 per day" threshhold to be considered a money transmitter:
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
Quote
No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
Honest question, does a 2 person exchange between USD and BTC count as a money transmission? I thought transmitters were the middlemen in the business of moving money from A to B.
May 15, 2013, 07:51:25 PM
The govt using proof dating back 2 years when it just changed the rules a month ago? Perhaps that explains the legal counsel mtgox got.
And if the govt considers bitcoin a currency, how so if it's not legal tender anywhere? And to be coherent will it not tax speculator's profits?
And if the govt considers bitcoin a currency, how so if it's not legal tender anywhere? And to be coherent will it not tax speculator's profits?
May 15, 2013, 07:45:53 PM
There is no "1,000 per day" threshhold to be considered a money transmitter:
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
Quote
No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.
from http://www.fincen.gov/financial_institutions/msb/definitions/msb.html
The phrase "as a business" is curious though. Does that mean as a casual miner that I do not engage "as a business?" This still seems a little vague to me. I can't believe that FinCEN gives two sh!ts about casual miners making .03 BTC per day on their 7970.
May 15, 2013, 07:26:52 PM
This article says that registration is free
http://www.theverge.com/2013/3/20/4127506/bitcoin-foundation-new-us-rules-targeting-virtual-currencies-are
and that Mtgox was relying on Coinlab to be compliant in the U.S. So it must be that Coinlab wanted revenge, broke off and 5 seconds later the US govt saw their chance.
And why are some of you talking so much and then on page three of the thread we discover it's only people who exchange over 1,000 dollars a day that need to register? No wonder that's why quite a few interpreted it as being that only the exchange sites had to register.
http://www.theverge.com/2013/3/20/4127506/bitcoin-foundation-new-us-rules-targeting-virtual-currencies-are
and that Mtgox was relying on Coinlab to be compliant in the U.S. So it must be that Coinlab wanted revenge, broke off and 5 seconds later the US govt saw their chance.
And why are some of you talking so much and then on page three of the thread we discover it's only people who exchange over 1,000 dollars a day that need to register? No wonder that's why quite a few interpreted it as being that only the exchange sites had to register.
May 15, 2013, 07:22:21 PM
still. even if it only applies to miners in the united states, isn't that a big deal? Am I the only one that thinks so? I almost fell out of my seat when I read that.
It's a very big deal. It's basically the end of Bitcoin-to-USD-and-back. You will need an official -centralized- company to handle your Bitcoins from now on. My guess is that no company in the US will be able to do the paperwork for Bitcoin. So that's that: the end of Bitcoin in the US.
You made quite a few gigantic leaps in logic to reach that conclusion of a company to hold all the bitcoins forever not allowing anyone to put theirs in their own wallet.
May 15, 2013, 06:14:51 PM
Not generate $1000 per day, sell / exchange 1000 per day, so if you generated a bunch then sold them all at once ...
You are correct. If I sold that many at once it would most likely be at an exchange which is already compliant with fincen regulations (Damnit GOX), instead of a F2F cash transaction. They'd send off reports of the sale to the appropriate revenue service and I would report capital gains and pay my taxes.
May 15, 2013, 06:09:10 PM
Not generate $1000 per day, sell / exchange 1000 per day, so if you generated a bunch then sold them all at once ...
May 15, 2013, 06:08:41 PM
From what I have read, you need to sell / exchange $1000 worth of BTC per day. Under that and you are exempt from the licensing requirements. I doubt that many miners here fall into that category.
May 15, 2013, 06:03:23 PM
And this is why scrypt coins are way safer than SHA256 coins, since the govt goons could control dedicated Asic hashers, but never GPUs.
Please don't talk when you don't know shit about what you're sayingAgreed
Sorry if you have a truth allergy, I didn't realize.
Fact is, any US customer of BFL is a potential perpetrator and the goons could easily search their property, by just using the BFL customer list. Since Asics are not used for anything else than BTC mining, owning an Asic miner could be seen as probable cause. This threat would probably deter anyone in the US from owning Asics. If the rest of the world mines on Asic, this development would eventually put US miners out of business, if international Asic ownership is high. Even worse, the government could accumulate enough Asics for a 51% attack, if international Asic ownership is low.
With LTC or YAC, this scenario is impossible because it would be impossible to chase anyone owning a GPU or CPU. Not only are there too many GPUs and CPUs, but also these can be plausibly used for other purposes.
Generic hardware cryptos are much less vulnerable than dedicated hw cryptos.
Not sure why you react like this.
Actually, I have now obtained and read the original FinCEN document. http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf
Quote
A user is a person that obtains virtual
currency to purchase goods or services.7
currency to purchase goods or services.7
And footnote 7 says
Quote
7 How a person engages in “obtaining” a virtual currency may be described using any number of other terms, such as
“earning,” “harvesting,” ”mining,” “creating,” “auto-generating,” “manufacturing,” or “purchasing,” depending on
the details of the specific virtual currency model involved. For purposes of this guidance, the label applied to a
particular process of obtaining a virtual currency is not material to the legal characterization under the BSA of the
process or of the person engaging in the process.
“earning,” “harvesting,” ”mining,” “creating,” “auto-generating,” “manufacturing,” or “purchasing,” depending on
the details of the specific virtual currency model involved. For purposes of this guidance, the label applied to a
particular process of obtaining a virtual currency is not material to the legal characterization under the BSA of the
process or of the person engaging in the process.
The document also says:
Quote
A user who obtains convertible virtual currency and uses it to purchase real or virtual
goods or services is not an MSB under FinCEN’s regulations.
goods or services is not an MSB under FinCEN’s regulations.
Long story short, if you buy bitcoins, mine bitcoins, etc. you are not subject to MSB regulations. Only if you trade in bitcoins, speculate in bitcoins, or make a business of buying and selling bitcoins to other users do you need to worry.
Having an ASIC does not make you culpable, and is not "probable cause" for anything illegal. Being BFL customer might be probable cause for gullibility, though.
+1 hope you're right
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