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This doesn't surprise me, and I expect other large exchanges to follow suite. Although the intentions of many US cryptocurrency regulations are to protect US r

by ve55 9y ago

This doesn't surprise me, and I expect other large exchanges to follow suite. Although the intentions of many US cryptocurrency regulations are to protect US residents/investors, they are instead leading to the exclusion of US residents from everything cryptocurrency-related. No one wants to touch US residents when cryptocurrencies are involved. Exchanges turn you down. ICOs tell you that you are not allowed to participate or outright block you. Gambling websites don't want to touch you either, of course. Neither do derivatives platforms, some sites with margin trading, and many sites with other types of speculation, such as sports betting, prediction markets, etc. It's easier to just exclude US residents instead of dedicating significant time and resources in trying to comply with new regulations that don't fit new technology as well as they should.

kuschku 9y ago
Additionally, most international banks refuse US citizen unless you bring a lot of money, because the US taxes all citizen (not just the money made in the US, or money made by people while they were in the US). And this goes even further, for example due to US patent laws, and export regulations (encryption are weapons of war, etc) even lots of open source software is not directly legal in the US (and many projects outright ban US citizen from working on these, while living in the US - this is also why the OpenBSD hackatons originally were a thing[1]). ________________________ [1] http://www.openbsd.org/hackathons.html http://www.openbsd.org/hackathons.html
- benwilber0 9y ago
  > many projects outright ban US citizen from working on these, while living in the US Do you know of any projects that don't allow US citizens to contribute?
  - kuschku 9y ago
    I literally linked one. For quite a while, OpenBSD banned US citizen from contributing to any cryptography code. Other projects that do stuff that would be illegal under US patent law (including some of my own) do the same today. Even other projects that use the EU law that allows decompilation, but which would be illegal in the US, do the same. But OpenBSD's hackathons are the only project that I want to specifically name. See the footnote 1 in my original comment.
    - gpvos 9y ago
      According to that page, some (early) hackathons were held in the US. Also, that page does not explain the reasoning why they're held outside the US. So that page is only a source for the existence of the hackathons, not for the reasons for their non-US location or for why they don't allow US citizens to contribute. (I wasn't the one who downvoted your GGP post.)
      - kuschku 9y ago
        Oh, I thought that was included. The reason for hackathons in Canada are the US crypto export restrictions. You can't export stronger than 128 bit crypto out of the US today without a permit (and even then only to a few countries, which is why many libraries including the Java stdlib only ship with 128-bit crypto by default, and you need to sign a form with the US DoD to unlock 256-bit crypto in Java). Back in the day it was worse, the limit was at 56-bit, which was easily cracked, and so some countries such as South Korea invented their own crypto (which they implemented as plugin for Netscape and IE5, and which is the reason IE is still used there today), and in yet other situations people simply wrote crypto code outside the US. In the end, people printed out the algorithms and source code for an RSA implementation, shipped that book to Europe, and typed it back into a computer. This quickly enabled people outside the US to get access to strong cryptography, and soon the crypto regulations became less strict. https://en.wikipedia.org/wiki/Export_of_cryptography_from_the_United_States https://en.wikipedia.org/wiki/Export_of_cryptography_from_th... Even today if you have a product, app, program, etc that includes cryptography (even using HTTPS counts) and that is at some point exported from the US to other countries, you need a permit from the US DoD. For example, if you have an app on the Apple AppStore that is sold outside the US. https://news.ycombinator.com/item?id=10835045 https://news.ycombinator.com/item?id=10835045
        firebird84 9y ago
        Are you talking about http://www.oracle.com/technetwork/java/javase/downloads/jce8-download-2133166.html http://www.oracle.com/technetwork/java/javase/downloads/jce8...? I didn't sign any form.
- deleted 9y ago
  [deleted]
- patio11 9y ago
  Additionally, most international banks refuse US citizen unless you bring a lot of money, because the US taxes all citizen (not just the money made in the US, or money made by people while they were in the US). It's less about the taxation per se, which has been true for decades but not generally dissuaded foreign banks. The big thing that makes banking Americans annoying is FATCA compliance: https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance... FATCA levels a highly, highly asymmetric weapon against Americans who desire to bank abroad: if the bank is unwilling to pay a $X ~ $Y0 million dollars in compliance costs and technology changes (amortized over all of its customers), they will lose access to USD clearing. That's an unacceptable outcome for most banks, even banks that one does not generally think of as being heavily exposed to America. Thus my recommendation for Americans living abroad: if you want to get an account with the least hassle, you either want the most gigantic bank you can think of in your country (which can absorb the compliance costs over their thousands of US customers because, hey, your expat population does have to bank somewhere).
  - kevinmchugh 9y ago
    It seems like there's a missing `or` clause, if I didn't go with the most gigantic bank.
    - floatingatoll 9y ago
      There isn’t always an “or” when it comes to feasible, tolerable solutions - especially when working with something designed in part for anonymity and institutions, both financial and government, that will not tolerate anonymity.
      - JamesBarney 9y ago
        But there is usually an "or" following the word "either" ️
benwilber0 9y ago
> Although the intentions of many US cryptocurrency regulations are to protect US residents/investors, they are instead leading to the exclusion of US residents from everything cryptocurrency-related. Coinbase, Gemini, Kraken... The US gov has actually been very progressive with regard to crypto. But if you're dealing in USD and doing bank wire transfers on behalf of USA citizens they require compliance with KYC/AML laws. This is apparently something Bitfinex didn't have the capacity to comply with.
- ve55 9y ago
  Right, it's not difficult if all you want to do is buy BTC or ETH and then sell it later at some point. Gemini is probably the best option for that. Bitfinex offered KYC/AML for US citizens that wished to interface with fiat (USD), but had trouble maintaining their relations with US banks. But if you want to do much more than that, things get pretty difficult if you're trying to be 100% compliant with known regulations and laws. Especially if you are crazy enough to consider the way things are supposed to be taxed when dealing with many cryptocurrencies, tokens, microtransactions, chain splits, air drops, and many other unconventional new mechanisms.
  - ajross 9y ago
    Other countries have broadly equivalent AML statutes. Bitfinex simply believes they can get away with breaking those laws in smaller juristictions.
    - deleted 9y ago
      [deleted]
    - trhway 9y ago
      Other countries don't have such capability to get their extradition requests obeyed :)
- jabits 9y ago
  No, this is a simple case of over-regulation in a budding market way too early. Coinbase pulled out of Hawaii due to burdensome state regulations. I had to open a new account from address in another state. "Although we strive to provide continuous access to Coinbase services, we regret to inform you that Coinbase is indefinitely suspending services in Hawaii. The Hawaii Division of Financial Institutions has recently communicated regulatory policies which will render continued Coinbase operations in Hawaii impractical. We understand this suspension will inconvenience our Hawaii customers and we apologize that we cannot currently project if or when our services may be restored.” http://www.hawaiiweblog.com/2017/02/27/coinbase-pulls-out-of-hawaii http://www.hawaiiweblog.com/2017/02/27/coinbase-pulls-out-of...
gst 9y ago
> No one wants to touch US residents when cryptocurrencies are involved. It's not only cryptocurrencies. As soon as you're taxable in the United States it's pretty much impossible to get a brokerage account at most European brokers (I don't know about other regions). Unfortunately "just use a US based broker then" doesn't work as answer if you're a non-resident US citizen, as lots of US brokerage companies close accounts of non-residents. At this point you're pretty much a customer that no-one wants to deal with.
- geomark 9y ago
  And then there's FATCA which makes you unwanted by banks in many countries. Try cashing a paycheck, paying rent, doing anything while being unbanked in a developed country. US people who don't travel much or live abroad have no idea how oppressive the US government is in its attempts to limit people and capital from migrating.
  - Scoundreller 9y ago
    Plenty of these US persons aren't even migrants, just individuals that happened to be born to (a) US citizen(s).
    - geomark 9y ago
      True. Many have never had any contact with the US or a US institution yet if the IRS ever learns of their existence they receive notice of overdue taxes.
xiphias 9y ago
With their BTC/ETH after going through Momero they can take part in any ICO anyways
discombobulate 9y ago
> US cryptocurrency regulations are to protect US residents/investors, they are instead leading to the exclusion of US residents from everything cryptocurrency-related Crypto assets cause nation states to hit themselves in the face. It's crypto judo.
joering2 9y ago
> It's easier to just exclude US residents instead of dedicating significant time and resources in trying to comply FATCA comes to mind. Incredibly short sighted law that was designed for foreign countries to comply with US code (just reporting back to homeland). But it grew out of proportion so much that upon cost analysis HSBC decided it will be easier just ban new customers and eject current us-citizens than actually keep army of accountants to make sure they comply. Other banks followed it shortly after. The result - us citizens are pretty much unwelcome and almost impossible to setup a business account in most China land. Congratulation Senator Levin, Baucus and Rangel with providing sourceless numbers of $100B USD lost due to outside non-taxation and writing this butchered law. Good job ruining US citizens ability to invest and/or run businesses outside so much already competitive US.

by ve55 9y ago

kuschku 9y ago

Additionally, most international banks refuse US citizen unless you bring a lot of money, because the US taxes all citizen (not just the money made in the US, or money made by people while they were in the US). And this goes even further, for example due to US patent laws, and export regulations (encryption are weapons of war, etc) even lots of open source software is not directly legal in the US (and many projects outright ban US citizen from working on these, while living in the US - this is also why the OpenBSD hackatons originally were a thing[1]). ________________________ [1] http://www.openbsd.org/hackathons.html http://www.openbsd.org/hackathons.html

benwilber0 9y ago
> many projects outright ban US citizen from working on these, while living in the US Do you know of any projects that don't allow US citizens to contribute?
- kuschku 9y ago
  I literally linked one. For quite a while, OpenBSD banned US citizen from contributing to any cryptography code. Other projects that do stuff that would be illegal under US patent law (including some of my own) do the same today. Even other projects that use the EU law that allows decompilation, but which would be illegal in the US, do the same. But OpenBSD's hackathons are the only project that I want to specifically name. See the footnote 1 in my original comment.
  - gpvos 9y ago
    According to that page, some (early) hackathons were held in the US. Also, that page does not explain the reasoning why they're held outside the US. So that page is only a source for the existence of the hackathons, not for the reasons for their non-US location or for why they don't allow US citizens to contribute. (I wasn't the one who downvoted your GGP post.)
    - kuschku 9y ago
      Oh, I thought that was included. The reason for hackathons in Canada are the US crypto export restrictions. You can't export stronger than 128 bit crypto out of the US today without a permit (and even then only to a few countries, which is why many libraries including the Java stdlib only ship with 128-bit crypto by default, and you need to sign a form with the US DoD to unlock 256-bit crypto in Java). Back in the day it was worse, the limit was at 56-bit, which was easily cracked, and so some countries such as South Korea invented their own crypto (which they implemented as plugin for Netscape and IE5, and which is the reason IE is still used there today), and in yet other situations people simply wrote crypto code outside the US. In the end, people printed out the algorithms and source code for an RSA implementation, shipped that book to Europe, and typed it back into a computer. This quickly enabled people outside the US to get access to strong cryptography, and soon the crypto regulations became less strict. https://en.wikipedia.org/wiki/Export_of_cryptography_from_the_United_States https://en.wikipedia.org/wiki/Export_of_cryptography_from_th... Even today if you have a product, app, program, etc that includes cryptography (even using HTTPS counts) and that is at some point exported from the US to other countries, you need a permit from the US DoD. For example, if you have an app on the Apple AppStore that is sold outside the US. https://news.ycombinator.com/item?id=10835045 https://news.ycombinator.com/item?id=10835045
      - firebird84 9y ago
        Are you talking about http://www.oracle.com/technetwork/java/javase/downloads/jce8-download-2133166.html http://www.oracle.com/technetwork/java/javase/downloads/jce8...? I didn't sign any form.
deleted 9y ago
[deleted]
patio11 9y ago
Additionally, most international banks refuse US citizen unless you bring a lot of money, because the US taxes all citizen (not just the money made in the US, or money made by people while they were in the US). It's less about the taxation per se, which has been true for decades but not generally dissuaded foreign banks. The big thing that makes banking Americans annoying is FATCA compliance: https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance... FATCA levels a highly, highly asymmetric weapon against Americans who desire to bank abroad: if the bank is unwilling to pay a $X ~ $Y0 million dollars in compliance costs and technology changes (amortized over all of its customers), they will lose access to USD clearing. That's an unacceptable outcome for most banks, even banks that one does not generally think of as being heavily exposed to America. Thus my recommendation for Americans living abroad: if you want to get an account with the least hassle, you either want the most gigantic bank you can think of in your country (which can absorb the compliance costs over their thousands of US customers because, hey, your expat population does have to bank somewhere).
- kevinmchugh 9y ago
  It seems like there's a missing `or` clause, if I didn't go with the most gigantic bank.
  - floatingatoll 9y ago
    There isn’t always an “or” when it comes to feasible, tolerable solutions - especially when working with something designed in part for anonymity and institutions, both financial and government, that will not tolerate anonymity.
    - JamesBarney 9y ago
      But there is usually an "or" following the word "either" ️

benwilber0 9y ago

> Although the intentions of many US cryptocurrency regulations are to protect US residents/investors, they are instead leading to the exclusion of US residents from everything cryptocurrency-related. Coinbase, Gemini, Kraken... The US gov has actually been very progressive with regard to crypto. But if you're dealing in USD and doing bank wire transfers on behalf of USA citizens they require compliance with KYC/AML laws. This is apparently something Bitfinex didn't have the capacity to comply with.

ve55 9y ago
Right, it's not difficult if all you want to do is buy BTC or ETH and then sell it later at some point. Gemini is probably the best option for that. Bitfinex offered KYC/AML for US citizens that wished to interface with fiat (USD), but had trouble maintaining their relations with US banks. But if you want to do much more than that, things get pretty difficult if you're trying to be 100% compliant with known regulations and laws. Especially if you are crazy enough to consider the way things are supposed to be taxed when dealing with many cryptocurrencies, tokens, microtransactions, chain splits, air drops, and many other unconventional new mechanisms.
- ajross 9y ago
  Other countries have broadly equivalent AML statutes. Bitfinex simply believes they can get away with breaking those laws in smaller juristictions.
  - deleted 9y ago
    [deleted]
  - trhway 9y ago
    Other countries don't have such capability to get their extradition requests obeyed :)
jabits 9y ago
No, this is a simple case of over-regulation in a budding market way too early. Coinbase pulled out of Hawaii due to burdensome state regulations. I had to open a new account from address in another state. "Although we strive to provide continuous access to Coinbase services, we regret to inform you that Coinbase is indefinitely suspending services in Hawaii. The Hawaii Division of Financial Institutions has recently communicated regulatory policies which will render continued Coinbase operations in Hawaii impractical. We understand this suspension will inconvenience our Hawaii customers and we apologize that we cannot currently project if or when our services may be restored.” http://www.hawaiiweblog.com/2017/02/27/coinbase-pulls-out-of-hawaii http://www.hawaiiweblog.com/2017/02/27/coinbase-pulls-out-of...

gst 9y ago

> No one wants to touch US residents when cryptocurrencies are involved. It's not only cryptocurrencies. As soon as you're taxable in the United States it's pretty much impossible to get a brokerage account at most European brokers (I don't know about other regions). Unfortunately "just use a US based broker then" doesn't work as answer if you're a non-resident US citizen, as lots of US brokerage companies close accounts of non-residents. At this point you're pretty much a customer that no-one wants to deal with.

geomark 9y ago
And then there's FATCA which makes you unwanted by banks in many countries. Try cashing a paycheck, paying rent, doing anything while being unbanked in a developed country. US people who don't travel much or live abroad have no idea how oppressive the US government is in its attempts to limit people and capital from migrating.
- Scoundreller 9y ago
  Plenty of these US persons aren't even migrants, just individuals that happened to be born to (a) US citizen(s).
  - geomark 9y ago
    True. Many have never had any contact with the US or a US institution yet if the IRS ever learns of their existence they receive notice of overdue taxes.

xiphias 9y ago

With their BTC/ETH after going through Momero they can take part in any ICO anyways

discombobulate 9y ago

> US cryptocurrency regulations are to protect US residents/investors, they are instead leading to the exclusion of US residents from everything cryptocurrency-related Crypto assets cause nation states to hit themselves in the face. It's crypto judo.

joering2 9y ago

> It's easier to just exclude US residents instead of dedicating significant time and resources in trying to comply FATCA comes to mind. Incredibly short sighted law that was designed for foreign countries to comply with US code (just reporting back to homeland). But it grew out of proportion so much that upon cost analysis HSBC decided it will be easier just ban new customers and eject current us-citizens than actually keep army of accountants to make sure they comply. Other banks followed it shortly after. The result - us citizens are pretty much unwelcome and almost impossible to setup a business account in most China land. Congratulation Senator Levin, Baucus and Rangel with providing sourceless numbers of $100B USD lost due to outside non-taxation and writing this butchered law. Good job ruining US citizens ability to invest and/or run businesses outside so much already competitive US.