4 ms·

>I think the Mt. Gox thought that they were immune Well, as we stand in May of 2013 perhaps it's obvious that Mt. Gox should have identified themselves as a Mo

by 300bps 13y ago

>I think the Mt. Gox thought that they were immune Well, as we stand in May of 2013 perhaps it's obvious that Mt. Gox should have identified themselves as a Money Transmitter and Money Service Business. Let's agree on two things though: 1. There's a fuzzy line as to who should have to get a license for this. For instance, the person that sold me Roman denarii for U.S. dollars on EBay might have to get a Money Service Business license with a strict interpretation of the law. 2. Literally two years ago in May of 2011 when Mt Gox filled out the forms, Bitcoin was not considered by most people to be a "currency". When most people think of currency exchange, they're thinking of U.S. dollars, Euros, Swiss Francs, British Pounds, etc. Is Parker Brothers responsible for registering as a Money Service Bureau because they exchange U.S. Dollars for Monopoly Money?

richcollins 13y ago
Does your business accept funds from customers and send the funds based on customers' instructions (Money Transmitter) Seems like this is more applicable (although still a stretch) as they receive USD and then forward them on to BTC sellers.
- reeses 13y ago
  Don't forget the vouchers for traditional currencies that could be exchanged without any conversion into bitcoin. Those were often leveraged to get around the banking latency, but would just as easily been used as a (slow) way of paying for illicit goods or for obfuscating layering in an ML scheme.
dragonwriter 13y ago
> Literally two years ago in May of 2011 when Mt Gox filled out the forms, Bitcoin was not considered by most people to be a "currency". But the US dollar has been considered a currency for a long time (longer, in fact, that the "Money Transmitter" rules at issue in the warrant have been in place), and certainly before May 2011. And that's the currency whose transmission is at issue in the warrant. Further, the issue is not incorrect forms filled out in 2011, but unlicensed money transmission business continuing to be conducted into 2013.
mikeyouse 13y ago
There's a fuzzy line as to who should have to get a license for this. For instance, the person that sold me Roman denarii for U.S. dollars on EBay might have to get a Money Service Business license with a strict interpretation of the law. No offense, but the slightest bit of research will remove any 'fuzziness' in most laws, especially in easily quantifiable fields like financial services. From the FinCEN[1]: "An activity threshold of greater than $1,000 per person per day in one or more transactions applies to the definitions of: currency dealer or exchanger; check casher; issuer of traveler's checks, money orders or stored value; and seller or redeemer of travelers' checks, money orders or stored value. The threshold applies separately to each activity -- if the threshold is not met for the specific activity, the person engaged in that activity is not an MSB on the basis of that activity." Literally two years ago in May of 2011 when Mt Gox filled out the forms, Bitcoin was not considered by most people to be a "currency". The legal distinction has nothing to do with a 'currency', only a 'store of value'. It was fairly obvious from the beginning they were ignoring Federal statutes. You can't avoid taxes by claiming to be a sovereign individual and you can't use cleverly disguised money to avoid taxes and regulations, this has all been tried before. [1] - http://www.fincen.gov/financial_institutions/msb/definitions/msb.html http://www.fincen.gov/financial_institutions/msb/definitions...
- viggity 13y ago
  So does a corn broker considered a money exchanger/transmitter? Corn be a "store of value". What about gold? Or oil? Or a Cryptographic chunk of data?
  - mikeyouse 13y ago
    I'll start with the second part of your question; [Can] Corn be a "store of value". What about gold? Or oil? It doesn't matter. The whole point of the 'Money Services Business' designation which Bitcoin just ran into is to enforce standard regulations for all 'Financial Institutions'. The definition of 'Financial Institutions' already includes brokers, broker-dealers, exchanges, etc.[1] So [is] a corn broker considered a money exchanger/transmitter? No. They are considered brokers. Brokers and commodities exchanges are regulated separately by FINRA and the CFTC/NFA and therefore are not considered MSBs. From the regulation: The term “money services business” shall not include: .... A person registered with, and ... regulated by, the SEC or the CFTC. [2] It's all there. The concept of a 'bitcoin' isn't actually very original, people have invented dozens of currencies and other schemes to launder money and avoid taxes. Whether or not that was Bitcoin's intent, it's going to have to play by the rules as if it were. [1] - http://www.fincen.gov/financial_institutions/msb/definitions/fin_ins.html http://www.fincen.gov/financial_institutions/msb/definitions... [2] - http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=b49834e109380edefdffa135472c6b6f&rgn=div8&view=text&node=31:3.1.6.1.2.1.3.1&idno=31 http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=b49834e1...

by 300bps 13y ago

richcollins 13y ago

Does your business accept funds from customers and send the funds based on customers' instructions (Money Transmitter) Seems like this is more applicable (although still a stretch) as they receive USD and then forward them on to BTC sellers.

reeses 13y ago
Don't forget the vouchers for traditional currencies that could be exchanged without any conversion into bitcoin. Those were often leveraged to get around the banking latency, but would just as easily been used as a (slow) way of paying for illicit goods or for obfuscating layering in an ML scheme.

dragonwriter 13y ago

> Literally two years ago in May of 2011 when Mt Gox filled out the forms, Bitcoin was not considered by most people to be a "currency". But the US dollar has been considered a currency for a long time (longer, in fact, that the "Money Transmitter" rules at issue in the warrant have been in place), and certainly before May 2011. And that's the currency whose transmission is at issue in the warrant. Further, the issue is not incorrect forms filled out in 2011, but unlicensed money transmission business continuing to be conducted into 2013.

mikeyouse 13y ago

There's a fuzzy line as to who should have to get a license for this. For instance, the person that sold me Roman denarii for U.S. dollars on EBay might have to get a Money Service Business license with a strict interpretation of the law. No offense, but the slightest bit of research will remove any 'fuzziness' in most laws, especially in easily quantifiable fields like financial services. From the FinCEN[1]: "An activity threshold of greater than $1,000 per person per day in one or more transactions applies to the definitions of: currency dealer or exchanger; check casher; issuer of traveler's checks, money orders or stored value; and seller or redeemer of travelers' checks, money orders or stored value. The threshold applies separately to each activity -- if the threshold is not met for the specific activity, the person engaged in that activity is not an MSB on the basis of that activity." Literally two years ago in May of 2011 when Mt Gox filled out the forms, Bitcoin was not considered by most people to be a "currency". The legal distinction has nothing to do with a 'currency', only a 'store of value'. It was fairly obvious from the beginning they were ignoring Federal statutes. You can't avoid taxes by claiming to be a sovereign individual and you can't use cleverly disguised money to avoid taxes and regulations, this has all been tried before. [1] - http://www.fincen.gov/financial_institutions/msb/definitions/msb.html http://www.fincen.gov/financial_institutions/msb/definitions...

viggity 13y ago
So does a corn broker considered a money exchanger/transmitter? Corn be a "store of value". What about gold? Or oil? Or a Cryptographic chunk of data?
- mikeyouse 13y ago
  I'll start with the second part of your question; [Can] Corn be a "store of value". What about gold? Or oil? It doesn't matter. The whole point of the 'Money Services Business' designation which Bitcoin just ran into is to enforce standard regulations for all 'Financial Institutions'. The definition of 'Financial Institutions' already includes brokers, broker-dealers, exchanges, etc.[1] So [is] a corn broker considered a money exchanger/transmitter? No. They are considered brokers. Brokers and commodities exchanges are regulated separately by FINRA and the CFTC/NFA and therefore are not considered MSBs. From the regulation: The term “money services business” shall not include: .... A person registered with, and ... regulated by, the SEC or the CFTC. [2] It's all there. The concept of a 'bitcoin' isn't actually very original, people have invented dozens of currencies and other schemes to launder money and avoid taxes. Whether or not that was Bitcoin's intent, it's going to have to play by the rules as if it were. [1] - http://www.fincen.gov/financial_institutions/msb/definitions/fin_ins.html http://www.fincen.gov/financial_institutions/msb/definitions... [2] - http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=b49834e109380edefdffa135472c6b6f&rgn=div8&view=text&node=31:3.1.6.1.2.1.3.1&idno=31 http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=b49834e1...