What if Bitcoinica requires identification for all customers? - page 3.

evoorhees

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Quote from: zhoutong on February 17, 2012, 11:57:05 AM

Quote from: SgtSpike on February 17, 2012, 11:49:27 AM

Does this mean you would start sending out 1099's based on incomes made from each account? Cheesy

No. We will not operate the business in the United States, nor will we respond to requests outside of our operating jurisdiction.

Good answer Zhou... but the US believes you are ALREADY in their jurisdiction, merely because US residents do business with you. As of two days ago, http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-A001.html

The problem with keeping the private records of your customers, is that WHEN the US demands your records, they'll have a treasure trove of information with which to harass people.

With that said, it's inevitable that some portion of the Bitcoin businesses will go the route of full legalization/licensing. I think, strategically, that is probably a net benefit, because it allows Bitcoin to grow and gain adoption. I'm okay with it, because I also know Bitcoin itself is inherently beyond the grasp of the state - and so the longer it's allowed to exist and grow, the better. If the government thinks it's regulating Bitcoin because it's managed to regulate most exchanges, then I'm okay with them having that delusion. It will keep them docile.

eldentyrell

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felonious vagrancy, personified

Quote from: zhoutong on February 17, 2012, 01:35:33 AM

- We will have a detailed Terms of Service and Privacy Policy before identification becomes an absolute requirement.

You also must implement exit addresses BEFORE identification becomes an absolute requirement.

For those who don't know, an exit address is a bitcoin address that the customer registers with an exchange when they sign up. The address cannot be changed once the account is established. At any time, and for any reason -- even if the account is "frozen" for any reason -- the customer can request total liquidation of their account and payment of all resulting funds to the exit address. In order for this to be an "exit address", this liquidation ability must override any and all "account frozen" or "account pending review" or "we think your account was compromised" (this is why the exit address is unchangeable) or other nonsense statuses imposed on the account.

If Bitcoinica starts requiring identification without first committing to an exit address policy, I will immediately liquidate my positions and close my account.

0ni0ns

newbie

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Why the hell is bitcoinica wanting more identification than mtgox does? I will certainly stop trading if its required for bitcoin deposits/withdraws. I have no plans to use USD within bitcoinica except to use my profits to buy more bitcoins. I work hard to be 100% anonymous online and prefer to keep it that way.

labestiol

sr. member

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Where will the business be operated ? Singapore ?

Will this registration as financial service provider resolve liquidity issues ?

I never tried bitcoinica because of liquidity issues, which is obviously a huge limitation. Without that, i would have for sure some money in it.
To me that's also actually good news. I'm ok giving personal info to have a quality, reliable service. I already do for broker accounts.

If some are not ok with that, i'm sure someone else will set up something for them.

Qoheleth

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Quote from: notme on February 17, 2012, 01:08:02 PM

Good compromise, but I'm concerned that since they are still taking out USD loans to go long, or purchasing USD with BTC to go short the government will require identification. Perhaps not, but I'm almost certain my government would.

It is a gray area. But gray is better than black, especially if you have a lawyer who thinks it's a light enough gray to be feasible in court (and presumably Bitcoinica is in consultation with its lawyers about whatever actual issue underlies this poll).

notme

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Quote from: Qoheleth on February 17, 2012, 12:57:05 PM

What if this is only required before you deposit or withdraw fiat?

Here's how I see it:

If you're depositing or withdrawing fiat, that money has to go through a traditional clearinghouse, where you can be identified by "someone with a warrant" already.
If you're not depositing or withdrawing fiat (e.g. using bitcoins as maintenance for going long), then your use of Bitcoinica isn't in any way touching the money to which regulation applies, until and unless BTC's legal status switches to being considered currency itself.

So, folks who really want to deal anonymously would still be able to use Bitcoinica for those purposes that make sense, and maybe whatever legal requirements Zhou is sweating about would still be fulfilled?

Just an idea.

Good compromise, but I'm concerned that since they are still taking out USD loans to go long, or purchasing USD with BTC to go short the government will require identification. Perhaps not, but I'm almost certain my government would.

Qoheleth

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Spurn wild goose chases. Seek that which endures.

What if this is only required before you deposit or withdraw fiat?

Here's how I see it:

If you're depositing or withdrawing fiat, that money has to go through a traditional clearinghouse, where you can be identified by "someone with a warrant" already.
If you're not depositing or withdrawing fiat (e.g. using bitcoins as maintenance for going long), then your use of Bitcoinica isn't in any way touching the money to which regulation applies, until and unless BTC's legal status switches to being considered currency itself.

So, folks who really want to deal anonymously would still be able to use Bitcoinica for those purposes that make sense, and maybe whatever legal requirements Zhou is sweating about would still be fulfilled?

Just an idea.

zhoutong

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Quote from: SgtSpike on February 17, 2012, 11:49:27 AM

Does this mean you would start sending out 1099's based on incomes made from each account? Cheesy

No. We will not operate the business in the United States, nor will we respond to requests outside of our operating jurisdiction.

muyuu

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Quote from: zhoutong on February 17, 2012, 11:42:24 AM

Quote from: muyuu on February 17, 2012, 11:35:50 AM

Are verified accounts required for anything at this point?

No, but you can already get your account verified using our verification feature.

Ok, thanks for your answer.

In the FAQ you still recommend TradeHill as an exchange. I suggest you update that...

Cheers

SgtSpike

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Does this mean you would start sending out 1099's based on incomes made from each account? Cheesy

zhoutong

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Quote from: muyuu on February 17, 2012, 11:35:50 AM

Are verified accounts required for anything at this point?

No, but you can already get your account verified using our verification feature.

muyuu

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Are verified accounts required for anything at this point?

teflone

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Quote from: Raoul Duke on February 17, 2012, 09:45:18 AM

Zhoutong, when you are fully compliant don't forget to embed the Paraipan Seal of Approval on Bitcoinica.

Your user base will skyrocket for sure.

New name should be Para-pain (in the ass)

muyuu

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Quote from: cheat_2_win on February 17, 2012, 10:05:07 AM

Quote from: muyuu on February 17, 2012, 07:59:23 AM

Tbh, if this happens I see myself or somebody else creating a new one without these requirements.

A big number of users won't accept this change easily.

You can't be serious. Without complying with the legal requirements, no matter how outrageous they seem, the exchange can and will be declared illegal. I think it will be a good thing for exchanges to comply so that in the long run bitcoin is traded widely.

About the anonymity, bitcoin can be made anonymous as long as you remain within the bitcoin domain. As soon as you cross over from bitcoin to USD (or for that matter any other currency) electronically, you will leave an electronic trail that can be easily tracked. Does not matter how much anonymity you think you have got online?

Yep, this is why you don't create an exchange yourself. You operate in bitcoins and bitcoins only, and since bitcoins are not legally money, you have zero regulations to respond to. You only need bitcoins and proofs of transaction (be it mtgox codes or intersango PoT just to mention the 2 biggest exchanges). They deal with the legal part, that's why they are exchanges.

If you want bitcoinica to be also an exchange, that's when the big can of worms is opened. I may want to use this service with bitcoins that come, for instance, from mining. Or direct sales in bitcoins. There is no need to be passing my personal information around. It's a negative trade-off IMO, which is just what I'm stating here.

M4v3R

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New section on Bitcoinica for proceeding with verifications, showed up few moments ago:

cheat_2_win

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Quote from: muyuu on February 17, 2012, 07:59:23 AM

Tbh, if this happens I see myself or somebody else creating a new one without these requirements.

A big number of users won't accept this change easily.

You can't be serious. Without complying with the legal requirements, no matter how outrageous they seem, the exchange can and will be declared illegal. I think it will be a good thing for exchanges to comply so that in the long run bitcoin is traded widely.

About the anonymity, bitcoin can be made anonymous as long as you remain within the bitcoin domain. As soon as you cross over from bitcoin to USD (or for that matter any other currency) electronically, you will leave an electronic trail that can be easily tracked. Does not matter how much anonymity you think you have got online?

Raoul Duke

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Zhoutong, when you are fully compliant don't forget to embed the Paraipan Seal of Approval on Bitcoinica.

Your user base will skyrocket for sure.

sgbett

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Quote from: Technomage on February 17, 2012, 06:38:11 AM

I don't know about you but I've always thought that exchanges will be the way authorities can have some control over Bitcoin. It's crucial for its long term survival. So far only Mt. Gox has been serious about this and has been targeted but other exchanges will follow eventually.

This doesn't kill Bitcoin's anonymity, no one forces you to acquire bitcoins from a major exchange. There are already a number of ways you can buy bitcoins from people directly. As more and more exchanges add these requirements, it's likely that alternative ways of acquiring bitcoins become more commonplace.

From my perspective all of this is very good development and it reduces fears that Bitcoin might some day be announced illegal. If that happened, all exchanging would be person to person and that is where any larger potential Bitcoin has, dies.

This is exactly right. Bitcoinica is a place where you can use bitcoin to trade on leverage, and if it requires ID then so be it - you have the choice whether to indulge or not.

I see this as analogous to cash. If you want to open a broker account, or do forex trading etc then you are likely going to have to identify yourself to the brokerage. If you just want to hoard, spend and remain anonymous then you can use good old cash.

The benefit over cash is that you have X number of other ways of moving huge amounts of bitcoin around internationally and virtually anonymously. Whereas if you try an take a suitcase full of dollars out of the country you can bet seem questions are gonna be asked!

Crypt_Current

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Quote from: smickles on February 17, 2012, 08:04:17 AM

Quote from: Crypt_Current on February 17, 2012, 06:48:16 AM

Quote from: Technomage on February 17, 2012, 06:38:11 AM

I don't know about you but I've always thought that exchanges will be the way authorities can have some control over Bitcoin. It's crucial for its long term survival. So far only Mt. Gox has been serious about this and has been targeted but other exchanges will follow eventually.

This doesn't kill Bitcoin's anonymity, no one forces you to acquire bitcoins from a major exchange. There are already a number of ways you can buy bitcoins from people directly. As more and more exchanges add these requirements, it's likely that alternative ways of acquiring bitcoins become more commonplace.

From my perspective all of this is very good development and it reduces fears that Bitcoin might some day be announced illegal. If that happened, all exchanging would be person to person and that is where any larger potential Bitcoin has, dies.

I mostly agree with this -- the main problem I see is something like this: Right now, as is, Bitcoin is offering extremely impoverished, yet smart people (like myself) to financially turn their lives around and get a fresh start. If I had to start paying taxes on my earnings, boom it's game over and I'm back to being impoverished and underpaid (unless I want to partake in the then illegal trading markets which will no doubt spring up), but I don't want to -- this is why I still do not deal drugs or anything like that.

you know if you're poor and smart, you shouldn't actually have to pay taxes, in fact, you should get EIC and the people who do pay taxes pay you.

no EIC if you have no EI
I sure as heck took advantage of that refundable american opportunity credit though ;-)
edit: lol and promptly spent it on bitcoins

smickles

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Quote from: Crypt_Current on February 17, 2012, 06:48:16 AM

Quote from: Technomage on February 17, 2012, 06:38:11 AM

I don't know about you but I've always thought that exchanges will be the way authorities can have some control over Bitcoin. It's crucial for its long term survival. So far only Mt. Gox has been serious about this and has been targeted but other exchanges will follow eventually.

This doesn't kill Bitcoin's anonymity, no one forces you to acquire bitcoins from a major exchange. There are already a number of ways you can buy bitcoins from people directly. As more and more exchanges add these requirements, it's likely that alternative ways of acquiring bitcoins become more commonplace.

From my perspective all of this is very good development and it reduces fears that Bitcoin might some day be announced illegal. If that happened, all exchanging would be person to person and that is where any larger potential Bitcoin has, dies.

I mostly agree with this -- the main problem I see is something like this: Right now, as is, Bitcoin is offering extremely impoverished, yet smart people (like myself) to financially turn their lives around and get a fresh start. If I had to start paying taxes on my earnings, boom it's game over and I'm back to being impoverished and underpaid (unless I want to partake in the then illegal trading markets which will no doubt spring up), but I don't want to -- this is why I still do not deal drugs or anything like that.

you know if you're poor and smart, you shouldn't actually have to pay taxes, in fact, you should get EIC and the people who do pay taxes pay you.

Topic: What if Bitcoinica requires identification for all customers? - page 3. (Read 7090 times)