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An act to amend Financial and Corporations Codes relating to digital currency
- KeatonDunsford 10y agoCan imagine this will be impossible to force with the rise of decentralized exchanges for BTC and ETH like Bitsquare and EtherEx. But still... "The bill would prohibit a person from engaging in the digital currency business without enrolling in the program and would prohibit the conduct of digital currency business through an unenrolled agent. The bill would require a person seeking enrollment to pay a nonrefundable fee of up to $5,000... The bill would also require the person to provide fingerprints and would authorize the commissioner to deliver the fingerprints to law enforcement agencies." Fuck this.
- tn13 10y agoTruly fuck this law. Not even sure how they are going to enforce this rubbish.
- trhway 10y agoa law may be not completely enforceable in normal situation, yet it would still provide at least two things: 1. scaring away a bunch of would-be players and 2. once somebody got law enforcement attention even for non-related things the law may provide for additional charge and thus higher pressure and higher chances that something would finally stick.
- CamperBob2 10y agoThe usual way, I imagine: by having more guns than you do.
- r00fus 10y agoSo what constitutes a digital currency? I mean, I've heard arguments that BTC is really an asset being traded. Didn't see that Also: looks like proposed fee has been increased to $5000 from $500 (didn't look for other details). Amusing that legalese is essentially similar to code, but without variable declarations (ie, $digitalcurrency := "currency that's traded online, including but not restricted to BTC, etc") it's a bit of a nightmare to parse.
- dragonwriter 10y agoFrom the proposed law: “Digital currency” means any digital representation of value that can be digitally traded and is used to facilitate the sale, purchase, and exchange of goods, services, or other digital representations of value among its users. Digital currency does not include fiat currency, e-money, or currency value of which was fixed by its issuer to the value of a fiat currency.
- jsprogrammer 10y agoMissing is a definition of what "value" is. My Bitcoin is a digital representation of the bits needed to solve a particular block. It doesn't represent value, but a numerical solution to a mathematical problem.
- dogecoinbase 10y agoPlaying dumb only makes you look dumb. Judges/legislators/basically everyone can see right through this kind of pretense and aren't particularly sympathetic to the "b...but I'm technically correct!" stance.
- jsprogrammer 10y agoTechnically correct is the only kind; no pretense needed. >Playing dumb only makes you look dumb.
- smokeyj 10y ago> and aren't particularly sympathetic to the "b...but I'm technically correct!" stance. That stance is called the rule of law and being technically correct matters. That's the whole point of that court thing. http://time.com/money/4421955/bitcoin-miami-judge-money-laundering/ http://time.com/money/4421955/bitcoin-miami-judge-money-laun...
- JumpCrisscross 10y ago
- pookaroo 10y ago.
- notliketherest 10y agoWelcome to the People's Republic of California. Where we're tolerant of everyone as long as they agree with us.
- sctb 10y agoPlease don't comment like this here.
- chollida1 10y agohttps://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1326 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml... I believe this is a better link to the same editing, its atleast easier to parse the changes and it has colours!!
- sctb 10y agoThanks, we updated the link from http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_1301-1350/ab_1326_bill_20160808_amended_sen_v94.pdf http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_1301-1350/ab....
- Kinnard 10y agoI hope this will provide an impetus for the community to organize and stop this.
- logfromblammo 10y agoI hope this will provide an impetus for more tech businesses to diversify their operations to places outside of California. It's a bit like seeing your best friend in an abusive relationship. You almost want to see it go too far, so your friend will finally wise up and break it off. Almost. Yeah, organize and stop this. But also read this pamphlet on how to get help from an abused industry shelter near you.
- verisimilidude 10y agoSome meat from page 30 about the definition of "digital currency business" for the purposes of this act... (d) “Digital currency business” means the business of offering or providing the service of storing, transmitting, exchanging, or issuing digital currency. “Digital currency business” does not include the following: (1) Transmission of digital currency where the transaction is undertaken for non financial purposes and does not involve the transfer of more than a nominal amount of digital currency necessary to complete the transaction. (2) Online games or gaming platforms that use digital currency that (A) have no market or application outside of those games or gaming platforms, (B) cannot be converted into, or redeemed for, fiat currency or digital currency, and (C) are not redeemable for real-world goods, services, discounts, or purchases. (3) Customer affinity or rewards programs that use digital currency that can be redeemed for goods, services, or for purchases with the issuer or other designated merchants, but cannot be converted into, or redeemed for, fiat currency or digital currency that is not part of the customer af nity or rewards program. (4) Issuance of a credit card voucher, letter of credit, or any value that is redeemable only by the issuer for goods and services provided by the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value. (5) A person or entity developing, distributing, or servicing digital currency network software. (6) A person or entity contributing software, connectivity, or computing power to a digital currency network. (7) A person or entity providing data storage or cybersecurity services for an enrolled digital currency business, if the data storage or cybersecurity services do not store digital currency.
- verisimilidude 10y agoFor my part, the wording in #1 looks especially flimsy. What the hell does "nominal" mean? Is "nominal" measured against some absolute dollar value, or against the scope of the task/services rendered? It's not hard to imagine some massive smart contract transactions that would require a lot of resources to perform, but which wouldn't otherwise have any financial purpose. Would those be deemed too costly, not nominally cheap enough, for this act? I also wonder about the meaning of "non financial" here. What would this mean for a coin like ETH? ETH does not aspire to be anything more than grease for the Ethereum network. Nonetheless, it's now traded on exchanges for BTC, USD, etc. Does its rising value in trade mark it as "financial" for the purposes of this act, in every ETH transaction on the Ethereum network, even though it's not directly intended for financial purposes?
- cloudjacker 10y agobitlicense part trois
- erdevs 10y agoWhether it's this bill or not, this kind of legislation is inevitable, isn't it?
- mhluongo 10y agoThe last version was much less restrictive. Regulation is certainly inevitable, but stifling regulation is something we can fight against.
- lijason 10y agoYeah, I don't really understand the anger about this. Financial institutions already have significant regulations. It's not clear to me why the digital currency equivalent institutions shouldn't be treated similarly. If the only argument for digital currency is lack of regulation, it seems that people should be pushing for decreased regulation on financial institutions instead. An end-around regulation just because we're using digital currency as the go-between doesn't seem to make a lot of sense. Big caveat, I haven't read this bill or about this bill enough to know if it goes significantly beyond the regulations for financial institutions. If so, clearly, that's different.
- thinkcomp 10y agoFor context on the California Money Transmission Act, on which this bill is based, see: http://www.thinkcomputer.com/20140214.cfpbcomment.pdf http://www.thinkcomputer.com/20140214.cfpbcomment.pdf OCC has recently expressed interest in regulating financial technology startups at the federal level. So far I'm not aware of any bill in Congress that would actually facilitate their doing so, however. But it's about time. Until then, here's the "Commissioner of Business Oversight"... http://www.janlynnowen.com http://www.janlynnowen.com ...and her perjuring deputy... http://www.robvenchiarutti.com http://www.robvenchiarutti.com
- Animats 10y agoRead "The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one"[1] on Quartz. They can't even find the company's offices. The Hong Kong address is a mail drop. The British Virgin Islands address is a mail drop. The CEO is missing. Looks a lot like an inside job. Fingerprinting cryptocurrency company management is a good idea. [1] http://qz.com/753958/the-65-million-bitfinex-hack-shows-that-it-is-impossible-to-tell-a-good-bitcoin-company-from-a-bad-one/ http://qz.com/753958/the-65-million-bitfinex-hack-shows-that...
- mhluongo 10y agoHow would this bill prevent that? I'd argue it wouldn't, because shenanigans like this aren't happening at US-run bitcoin companies. We already have federal MSB regulations, and should solve this at the federal level. The proliferation of state MSB regulations make it incredibly expensive for new fintech companies to compete against incumbents and internationally.
- Hermel 10y agoAs someone who has suffered a significant loss from the Bitfinex hack, I still prefer technical over regulatory solutions. You should also note that Bitfinex used to have a much more secure setup, with most of its Bitcoins being stored in cold, offline storage. However, US regulation required them to use segregated accounts for each user. Under such a requirement, the cold storage variant does not work any more, so they moved to keep everything online so they could physically move the Bitcoins back and forth as they were used for margin loans within Bitfinex. It was too much misguided regulation that made them vulnerable in the first place.
- mhluongo 10y agoI think the CFTC interference is overstated- BitFinex still could have segregated cold wallets for the whales, and I've heard they made the change primarily in response to the last hack. I want the CFTC interference to be the primary issue, though- it certainly fits the narrative and would be a great lesson going forward. Note: I also lost money on the hack.
- pseudointellect 10y agoGlad the title was updated from the previous titlegore. Thanks, mods!
- jimmaswell 10y agoWill this hurt Second Life/its users?
- yerbatime 10y agoIf you disagree with the proposed legislation, you can very easily contact your CA Senator and let them know here: https://nobitcoinlicense.org/ https://nobitcoinlicense.org/
- mmanfrin 10y agoThe MTA was previously used against companies that simply facilitated marketplaces. I worked for a mobile-ordering startup called GoPago that got hit with a suit over the MTA since we were 'storing currency' (i.e., people paid us money for food that we would then pass on to the merchant that made the food). The only way of getting approval for 'money transfer' was to get a 'Medallion' which took around 18 months. The MTA was awful, and this appears to be gutting the parts that was applicable to its overreach. I see a lot of negativity in this comment section about the changes, as CA is moving to change the law to be used to regulate digital currencies which I believe was the original intent of the MTA (not specifically digital currencies, but anything fiat used as currency).