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Laws would probably have to be re-written to categorize them as a money transmitter, because there is no fiduciary duty for the Lightning Network Node (they can
by jlrubin 9y ago
Laws would probably have to be re-written to categorize them as a money transmitter, because there is no fiduciary duty for the Lightning Network Node (they cannot wrongfully claim funds).
These changes shouldn't happen, there are lots of companies who provide services where it doesn't make sense for them to act like money transmitters. For instance, BitGo is a 2-of-3 multisig wallet where they hold one key. They aren't a money transmitter because they can't send funds without your approval nor can they prevent you from sending funds.
- AlexCoventry 9y agoThanks. Do you know of any other existing legal frameworks which would require super-nodes to follow KYC protocols? Maybe it was just a general concern about centralization resulting in easy targets for regulation.
- JumpCrisscross 9y ago> Laws would probably have to be re-written to categorize them as a money transmitter, because there is no fiduciary duty for the Lightning Network Node American law draws two circles. One is for entities with know your customer (KYC) requirements. The other is for entities with a fiduciary duty to their clients. The second circle is inside the first. Lots of entities with no client fiduciary requirements are required to know their customers. TL; DR If you’re handling others’ money, or helping others transmit money, directly or indirectly, you have a KYC liability under current law. Disclaimer: I am not a lawyer. This is not legal advice.
- bitxbitxbitcoin 9y agoLaws take time to be rewritten. And as we've seen with the BitLicense - there are many, many jurisdictions that are content to take a wait-and-see approach. Essentially, let one state take the charge, see if businesses all of a sudden stop servicing customers from said state, and learn from their mistakes :).