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Wrong. This company does not sell Bitcoins - they buy them (the state's "initial investigation" - which likely consisted of reading a complaint filed anonymous

Wrong. This company does not sell Bitcoins - they buy them (the state's "initial investigation" - which likely consisted of reading a complaint filed anonymously by a competitor - had this entirely wrong). They are only "transmitting money" in the same way that people who buy things from Amazon or eBay are when they buy products. By your definition, I guess I need to become a licensed MSB next time I buy a replacement power supply on eBay.

TylerE 13y ago
How is this really any different from Western Union?
- downandout 13y ago
  I don't even understand the comparison. They were buying (not selling) Bitcoins directly from sellers. Western Union is specifically engaged in the business of enabling people to send money to others.
  - TylerE 13y ago
    They were taking money from customers, in exchange for which the customer received some sort of token of value, which could be used as a medium for exchange or reconverted to USD later.
    - downandout 13y ago
      It's not a token or store of value. Bitcoins only have value to the extent that others will buy them. There is not a person on the planet that has a contractual obligation to exchange or buy Bitcoins for anything.
      - TylerE 13y ago
        Bullshit. Things with easily accessible, live-updated exchange rates have value. We're not talking about baseball cards here.
        downandout 13y ago
        We're not talking about baseball cards here. You're right, we are literally talking about the buying and selling of random numbers. However, once again, Bitcoins have zero inherent value. There is no person or organization that has any obligation to buy or otherwise exchange them. They only have value to the extent that others will buy them.
        TylerE 13y ago
        I'm just going to invoke No True Scotsman at this point.
mikeash 13y ago
If I buy Euros, am I not transmitting money? There's a difference between Bitcoin and power supplies, namely that the former is money and the latter is not. The law applies to currency. Bitcoin advocates can't seem to make up their mind as to whether Bitcoin actually qualifies as "money". It's money right up to the point where the law starts talking about "money", then magically it's just some arbitrary good that's not actually a currency at all.
- deleted 13y ago
  [deleted]
- oleganza 13y ago
  Law may say what it wants. The reality is people trade things for things. Some other people define certain things as special and force you to comply based on their definitions. No one outside the legislative structures gives a rat's ass about those definitions. When you and me trade something for something, we don't care about someone's definitions, we only care about the value that we get in result. And your friends also don't care. Only people who have power to force you to comply use that power to play with words and mess with your mind.
  - mikeash 13y ago
    That's a fantasy. Here in reality, if you're operating a commercial enterprise, the way you operate depends greatly on what kind of item you sell. For example: 1. Hard liquor not for consumption on site: illegal to sell in Virginia, only the state can. 2. Firearms: highly regulated. 3. Food: must meet health department regulations. 4. Computer parts: fairly open, must still meet basic business licensing requirements, collect sales tax, etc. You can talk about how things ought to be all you want, but all that matters here is how things are, and how things are appears to be that this Bitcoin operation falls under a certain category of law with which they are not compliant. The law is not written with Bitcoin in mind at all, so conspiracy theories about governments specifically targeting Bitcoin do not appear to have any basis.
    - oleganza 13y ago
gamblor956 13y ago
If Bitcoins are considered currency, then it is subject to all of the same laws that would apply to any other currency. Money transmitter laws are currency agnostic--they apply equally to transmitters of pesos as they do to transmitters of dollars. OTOH, if Bitcoin is not a currency, then it would not be subject to these laws--but in such case it would be unlikely for Bitcoin to ever become more than an extremely niche means of exchange.
- dragonwriter 13y ago
  > If Bitcoins are considered currency, then it is subject to all of the same laws that would apply to any other currency. Money transmitter laws are currency agnostic--they apply equally to transmitters of pesos as they do to transmitters of dollars. The main reason many Bitcoin-related business are potentially covered by money transmitter (and related) rules is because of how they handle traditional currencies like US dollars in connection with their Bitcoin-related business.
dragonwriter 13y ago
> They are only "transmitting money" in the same way that people who buy things from Amazon or eBay are when they buy products. Per the FinCEN guidance on virtual currencies [1], " An administrator or exchanger that [...] buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person." So, no, the situation isn't the same in the eyes of the federal regulator, and its not really surprising that state regulators whose scope of authority is set by the federal rules view things the same way as the federal regulators. [1] http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001....

TylerE 13y ago

How is this really any different from Western Union?

downandout 13y ago
I don't even understand the comparison. They were buying (not selling) Bitcoins directly from sellers. Western Union is specifically engaged in the business of enabling people to send money to others.
- TylerE 13y ago
  They were taking money from customers, in exchange for which the customer received some sort of token of value, which could be used as a medium for exchange or reconverted to USD later.
  - downandout 13y ago
    It's not a token or store of value. Bitcoins only have value to the extent that others will buy them. There is not a person on the planet that has a contractual obligation to exchange or buy Bitcoins for anything.
    - TylerE 13y ago
      Bullshit. Things with easily accessible, live-updated exchange rates have value. We're not talking about baseball cards here.
      - downandout 13y ago
        We're not talking about baseball cards here. You're right, we are literally talking about the buying and selling of random numbers. However, once again, Bitcoins have zero inherent value. There is no person or organization that has any obligation to buy or otherwise exchange them. They only have value to the extent that others will buy them.
        TylerE 13y ago
        I'm just going to invoke No True Scotsman at this point.

mikeash 13y ago

If I buy Euros, am I not transmitting money? There's a difference between Bitcoin and power supplies, namely that the former is money and the latter is not. The law applies to currency. Bitcoin advocates can't seem to make up their mind as to whether Bitcoin actually qualifies as "money". It's money right up to the point where the law starts talking about "money", then magically it's just some arbitrary good that's not actually a currency at all.

deleted 13y ago
[deleted]
oleganza 13y ago
Law may say what it wants. The reality is people trade things for things. Some other people define certain things as special and force you to comply based on their definitions. No one outside the legislative structures gives a rat's ass about those definitions. When you and me trade something for something, we don't care about someone's definitions, we only care about the value that we get in result. And your friends also don't care. Only people who have power to force you to comply use that power to play with words and mess with your mind.
- mikeash 13y ago
  That's a fantasy. Here in reality, if you're operating a commercial enterprise, the way you operate depends greatly on what kind of item you sell. For example: 1. Hard liquor not for consumption on site: illegal to sell in Virginia, only the state can. 2. Firearms: highly regulated. 3. Food: must meet health department regulations. 4. Computer parts: fairly open, must still meet basic business licensing requirements, collect sales tax, etc. You can talk about how things ought to be all you want, but all that matters here is how things are, and how things are appears to be that this Bitcoin operation falls under a certain category of law with which they are not compliant. The law is not written with Bitcoin in mind at all, so conspiracy theories about governments specifically targeting Bitcoin do not appear to have any basis.
  - oleganza 13y ago

gamblor956 13y ago

If Bitcoins are considered currency, then it is subject to all of the same laws that would apply to any other currency. Money transmitter laws are currency agnostic--they apply equally to transmitters of pesos as they do to transmitters of dollars. OTOH, if Bitcoin is not a currency, then it would not be subject to these laws--but in such case it would be unlikely for Bitcoin to ever become more than an extremely niche means of exchange.

dragonwriter 13y ago
> If Bitcoins are considered currency, then it is subject to all of the same laws that would apply to any other currency. Money transmitter laws are currency agnostic--they apply equally to transmitters of pesos as they do to transmitters of dollars. The main reason many Bitcoin-related business are potentially covered by money transmitter (and related) rules is because of how they handle traditional currencies like US dollars in connection with their Bitcoin-related business.

dragonwriter 13y ago

> They are only "transmitting money" in the same way that people who buy things from Amazon or eBay are when they buy products. Per the FinCEN guidance on virtual currencies [1], " An administrator or exchanger that [...] buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person." So, no, the situation isn't the same in the eyes of the federal regulator, and its not really surprising that state regulators whose scope of authority is set by the federal rules view things the same way as the federal regulators. [1] http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001....