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Bitcoin is legally an asset. Processing the transfer of bitcoin is legally no different from processing the exchange of baseball cards. Transferring $100 worth

by jjk166 5y ago

Bitcoin is legally an asset. Processing the transfer of bitcoin is legally no different from processing the exchange of baseball cards. Transferring $100 worth of baseball cards might be a money transmission, but transferring a signed Barry Bonds card regardless of its value is not. Likewise, sending $100 dollars in the form of bitcoin might be money transmission, but sending 0.03 BTC regardless of the dollar value is not. And those are exactly the sort of transfers processed by miners. To subject miners to FinCEN rules, the US would have to recognize bitcoin (and any other cryptocurrency one wanted to so regulate) as a legal currency. Further the idea that removing a transaction, which is functionally equivalent to moving funds back, is not a money transmission while the original movement of funds is a money transmission is absurd. Otherwise it would be trivial to create a cryptocurrency where initial payments are never validated and you simply rely on removing the superfluous transactions to achieve the same effect.

effie 5y ago
> To subject miners to FinCEN rules, the US would have to recognize bitcoin (and any other cryptocurrency one wanted to so regulate) as a legal currency. Isn't this just a detail, consistent with author's call for action? To him, participating in the bitcoin network means facilitating money transfers. If the gov. decides to adopt this viewpoint, calling bitcoin a foreign currency won't be difficult.
- jjk166 5y ago
  Yes, but recognizing it as a foreign currency would be a huge gain in legitimacy, which would seriously work against the author's stated goal of disrupting cryptocurrencies. Further, it's not enough to only require this for bitcoin, people would just jump to the next cryptocurrency. You'd essentially have to recognize all mined cryptocurrencies as valid foreign currencies (which would probably lead to a whole slew of complications) or significantly amend many existing laws to create some third category, which again goes against the author's "use existing laws to deal with bitcoin" approach. Of course once we get into this quagmire of trying to determine what exactly counts as a money transmission, there will be a whole host of financial institutions who will throw quite a bit of money at the prospect of creating new loopholes in existing regulations. All in all I would be very surprised if the author would desire the actual outcomes of their stated plan.

by jjk166 5y ago

effie 5y ago

> To subject miners to FinCEN rules, the US would have to recognize bitcoin (and any other cryptocurrency one wanted to so regulate) as a legal currency. Isn't this just a detail, consistent with author's call for action? To him, participating in the bitcoin network means facilitating money transfers. If the gov. decides to adopt this viewpoint, calling bitcoin a foreign currency won't be difficult.

jjk166 5y ago
Yes, but recognizing it as a foreign currency would be a huge gain in legitimacy, which would seriously work against the author's stated goal of disrupting cryptocurrencies. Further, it's not enough to only require this for bitcoin, people would just jump to the next cryptocurrency. You'd essentially have to recognize all mined cryptocurrencies as valid foreign currencies (which would probably lead to a whole slew of complications) or significantly amend many existing laws to create some third category, which again goes against the author's "use existing laws to deal with bitcoin" approach. Of course once we get into this quagmire of trying to determine what exactly counts as a money transmission, there will be a whole host of financial institutions who will throw quite a bit of money at the prospect of creating new loopholes in existing regulations. All in all I would be very surprised if the author would desire the actual outcomes of their stated plan.