4 ms·

They chose to not participate with PayPal, and invent their own currency, and in exchange, PayPal stopped dealing with them. Their questions were fairly basic K

They chose to not participate with PayPal, and invent their own currency, and in exchange, PayPal stopped dealing with them. Their questions were fairly basic KYC form-letter questions anyone selling a financial service should be able to answer - if they couldn't, they might be in trouble with the SEC, not just PayPal.

ashtonkem 6y ago
And yet this entire thing is going to turn into an ugly left vs. right culture war, even though this is probably more about KYC regulations.
- some_furry 6y ago
  Fortunately, https://news.ycombinator.com/item?id=24894248 https://news.ycombinator.com/item?id=24894248
  - umvi 6y ago
    Fought by a tiny minority, yes, but that tiny minority can stir up enormous amounts of large scale contention and discord.
  - gridlockd 6y ago
    That "tiny minority" still has an outsized impact. The pareto principle applies to pretty much everything.
    - jacquesm 6y ago
      That's as much to be attributed to the asymmetry between destruction and creation as it is to the pareto principle.
- newacct583 6y ago
  To be fair: the headline is quite clearly crafted to deliberately invite the culture war, and the clicks that come with it. The article itself rejects the premise in its very first sentence.
breakfastduck 6y ago
Genuine question here - what's the difference between them selling this 'currency' and buying in game currency on a video game? Or would those kind of things also have to comply with these kind of regulations?
- deburr 6y ago
  Video game currency is restricted to that video game, and most if not all video games have strict regulations against trading their currency for services outside of the game. The currency they're selling purports to be a general-use currency for real life sales.
- PeterisP 6y ago
  If a video game in-game currency is "input only", as in, the value goes from the players to the company and stays there, it's effectively just a payment for a service. If you allow transfers between users and cashing out to real money (as Epik's "Masterbucks"), then you'd have to comply with these kinds of regulations, so video games try and take steps to ensure that their currencies aren't treated like that, or at least if this does happen, they can't be seen as facilitating it. Epik's marketing material explicitly mentions both "fully transferrable" and "convertible to dollars" - this combination means that you're intentionally running a service that can be used for money transfers, and thus you need to ensure KYC (know your customer) and AML (anti money-laundering) compliance or shut down that service.
  - breakfastduck 6y ago
    Ahh okay I see I missed the point about being able to cash it back out. That makes sense, thank you.
parliament32 6y ago
It's odd though cause Masterbucks isn't crypto, it's just a gift-card-esque balance service. Similar to how you'd have a PayPal "balance" you can send to other people or spend on stuff, and "top up" buy linking a CC or buying a card at 7-Eleven. PayPal might've just realized they're a competitor.
- NovemberWhiskey 6y ago
  PayPal is undeniably a money transmitter, a type of money service business that is required to required to register as such and perform certain minimum levels of compliance work. If Masterbucks is "like PayPal" from that perspective, subject to certain de minimis thresholds, then they too are likely to require registration. Frankly, if this is the case, and the Epik people are complaining that PayPal's due-diligence questions on these topics are "absolutely absurd, and well outside of any knowledge or experience [they] have as a domain registrar" then perhaps they oughtn't to be running that kind of a business?
  - parliament32 6y ago
    It's fair, but is it PayPal's job to enforce that? If I sell MasterCard pre-paid cards at my corner store, will Visa come audit me and ask what sort of people I'm selling those cards to?
    - gruez 6y ago
      >It's fair, but is it PayPal's job to enforce that? Yes, because it's using their payment network. I'm not sure why your example involves Visa auditing a purchase of a prepaid mastercard.
    - nemothekid 6y ago
      Yes. When you deposit the money you earned from your pre-paid cards in your bank account, once you reach a certain size your bank will certainly start asking how you are making money, and if you say "gift cards/cash equivalents that can be traded online" they will also start to ask you who you are selling these cards to. From the banks point of view, they don't want the FBI to come knocking saying that carders in Russia were using the banks money to launder purchases from stolen credit cards. If the bank can't cough up those records they are in hot water. PayPal is the middleman that turns Masterbucks into cold hard cash into your bank account. If PayPal didn't enforce it, then in the eyes of the government PayPal is complicit also.

ashtonkem 6y ago

And yet this entire thing is going to turn into an ugly left vs. right culture war, even though this is probably more about KYC regulations.

some_furry 6y ago
Fortunately, https://news.ycombinator.com/item?id=24894248 https://news.ycombinator.com/item?id=24894248
- umvi 6y ago
  Fought by a tiny minority, yes, but that tiny minority can stir up enormous amounts of large scale contention and discord.
- gridlockd 6y ago
  That "tiny minority" still has an outsized impact. The pareto principle applies to pretty much everything.
  - jacquesm 6y ago
    That's as much to be attributed to the asymmetry between destruction and creation as it is to the pareto principle.
newacct583 6y ago
To be fair: the headline is quite clearly crafted to deliberately invite the culture war, and the clicks that come with it. The article itself rejects the premise in its very first sentence.

breakfastduck 6y ago

Genuine question here - what's the difference between them selling this 'currency' and buying in game currency on a video game? Or would those kind of things also have to comply with these kind of regulations?

deburr 6y ago
Video game currency is restricted to that video game, and most if not all video games have strict regulations against trading their currency for services outside of the game. The currency they're selling purports to be a general-use currency for real life sales.
PeterisP 6y ago
If a video game in-game currency is "input only", as in, the value goes from the players to the company and stays there, it's effectively just a payment for a service. If you allow transfers between users and cashing out to real money (as Epik's "Masterbucks"), then you'd have to comply with these kinds of regulations, so video games try and take steps to ensure that their currencies aren't treated like that, or at least if this does happen, they can't be seen as facilitating it. Epik's marketing material explicitly mentions both "fully transferrable" and "convertible to dollars" - this combination means that you're intentionally running a service that can be used for money transfers, and thus you need to ensure KYC (know your customer) and AML (anti money-laundering) compliance or shut down that service.
- breakfastduck 6y ago
  Ahh okay I see I missed the point about being able to cash it back out. That makes sense, thank you.

parliament32 6y ago

It's odd though cause Masterbucks isn't crypto, it's just a gift-card-esque balance service. Similar to how you'd have a PayPal "balance" you can send to other people or spend on stuff, and "top up" buy linking a CC or buying a card at 7-Eleven. PayPal might've just realized they're a competitor.

NovemberWhiskey 6y ago
PayPal is undeniably a money transmitter, a type of money service business that is required to required to register as such and perform certain minimum levels of compliance work. If Masterbucks is "like PayPal" from that perspective, subject to certain de minimis thresholds, then they too are likely to require registration. Frankly, if this is the case, and the Epik people are complaining that PayPal's due-diligence questions on these topics are "absolutely absurd, and well outside of any knowledge or experience [they] have as a domain registrar" then perhaps they oughtn't to be running that kind of a business?
- parliament32 6y ago
  It's fair, but is it PayPal's job to enforce that? If I sell MasterCard pre-paid cards at my corner store, will Visa come audit me and ask what sort of people I'm selling those cards to?
  - gruez 6y ago
    >It's fair, but is it PayPal's job to enforce that? Yes, because it's using their payment network. I'm not sure why your example involves Visa auditing a purchase of a prepaid mastercard.
  - nemothekid 6y ago
    Yes. When you deposit the money you earned from your pre-paid cards in your bank account, once you reach a certain size your bank will certainly start asking how you are making money, and if you say "gift cards/cash equivalents that can be traded online" they will also start to ask you who you are selling these cards to. From the banks point of view, they don't want the FBI to come knocking saying that carders in Russia were using the banks money to launder purchases from stolen credit cards. If the bank can't cough up those records they are in hot water. PayPal is the middleman that turns Masterbucks into cold hard cash into your bank account. If PayPal didn't enforce it, then in the eyes of the government PayPal is complicit also.