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The key detail here is that Liberty Reserve (Like MtGox) was operating an unlicensed money transmitter. Let's be honest, if you're transmitting money without a
by josh2600 13y ago
The key detail here is that Liberty Reserve (Like MtGox) was operating an unlicensed money transmitter. Let's be honest, if you're transmitting money without a license, you're gonna end up in jail once you hit scale. It's inevitable; the only companies that evade capture are the small potatoes.
So I think companies like MtGox have a lot to worry about, but companies like Tradehill, which have gone and done the regulatory dance, will be fine.
This is not the US versus Bitcoin, this is the US versus dumbasses who try to cheat the money transmitting rules and know damn well what they're doing is illegal. I happen to sympathize with these folks because I don't think the government should have its hands in every monetary transfer, but regulatory concerns are always a part of any business plan and ignoring them is a plan too (albeit not necessarily the best one).
- deleted 13y ago[deleted]
- jontas 13y agoAre you sure about this? It was my understanding that MtGox meets the legal requirements of its jurisdiction (Japan), and I know they require identity verification depending on how much money you're moving around(1). What I would like to know definitively is whether MtGox is openly flaunting the rules, or is just doing their best to operate in a legally untested area. 1. https://support.mtgox.com/entries/20919111-AML-Account-Statuses https://support.mtgox.com/entries/20919111-AML-Account-Statu...
- Torgo 13y agoWell, AFAIK they didn't seize MtGox LLC's money per se, they seized the accounts of Mutum Sigillum, which appears to be a subsidiary company in the USA set up to facilitate transfers through Dwolla which only offers services to US entities.
- jonknee 13y agoIt doesn't matter if they meet Japan's rules as long as they have US customers. Liberty Reserve was not a US company either...
- sliverstorm 13y agoYup, hardly sufficient to operate in the USA under Japan's rules. For the same reasons you are subject to the local laws when visiting another country; their roof, their rules.
- Judson 13y agoLots of people have been commenting about Tradehill doing all of the regulatory work needed to by completely in the clear, yet, a cursory search for a registered MSB[0] going by Tradehill, inc. or Tradehill didn't turn up any results. Tradehill alludes to the fact that they are doing some simple "know our customer" type verifications, but that won't satisfy FinCEN when they come knocking. [0]: http://www.fincen.gov/financial_institutions/msb/msbstateselector.html http://www.fincen.gov/financial_institutions/msb/msbstatesel...
- josh2600 13y agoI have some friends in tradehill and while I can't speak to their precise regulatory actions, I do believe they registered as a money transmitter.
- Judson 13y agoThey don't appear to have registered as a money transmitter in CA. http://www.dfi.ca.gov/Directory/money_transmitters.html http://www.dfi.ca.gov/Directory/money_transmitters.html