4 ms·

State money transmission laws are very strict, requiring, among other things, a bond to be posted to protect the public. Accoring to FinCEN, anyone selling uni

by codex 13y ago

State money transmission laws are very strict, requiring, among other things, a bond to be posted to protect the public. Accoring to FinCEN, anyone selling units of a decentralised virtual currency to another person for real currency is a money transmitter--so, for example, if you operated a business exchanging U.S. dollars for Bitcoins, you must be licensed. I don't know if the Bitcoin Foundation did this in California; perhaps there is some other wrinkle of state law at play here.

pelle 13y ago
Yet the Bitcoin foundation is neither a operator of a virtual currency service or an exchanger according to FinCEN rules. Tradehill and Coinbase are based out of California and are following all federal and state rules.
- quackerhacker 13y ago
  I thought Coinbase was based out of SF and even backed by YC? Not sure though, seeing on the privacy page an Oregon address. https://coinbase.com/about https://coinbase.com/about
  - rdl 13y ago
    If you google that address, it is an old address for earth class mail, a commercial mail scanning/forwarding service. (I use them too; they rock if you move a lot, or live overseas.)
- jeremyw 13y ago
  Interesting that you say that. Coinbase is verifiably registered with FinCEN, but not the states, as far as I can see. (Square, mentioned in the article, actually is registered in California.) http://www.fincen.gov/financial_institutions/msb/msbstateselector.html http://www.fincen.gov/financial_institutions/msb/msbstatesel... http://www.dfi.ca.gov/directory/money_transmitters.html http://www.dfi.ca.gov/directory/money_transmitters.html
vessenes 13y ago
As you might guess, we have deep expertise on-hand for the Foundation as to MTB/MSB laws, and can confidently state we do not engage in MTB or MSB activity at the Bitcoin Foundation; we're just a member organization. The state of California is blanket C&D-ing all Bitcoin businesses.
- genwin 13y ago
  Given the online ads included in the letter, it appears they googled for "bitcoin" and used a screen grabber to copy/paste the law text. It's sad how messed up the CA gov't has gotten.
  - vessenes 13y ago
    Yes, this seems likely.
- codex 13y ago
  I wouldn't be surprised if the C&D were blanket. That said, when you Google for "Bitcoin Foundation" you see an "About" section in the #1 result (your website) which begins, "Our mission is to help people exchange...". I wouldn't put it past the state not to have read any further. ;-)
- anigbrowl 13y ago
  OK, but isn't it a fact that the Bitcoin Foundation's membership is made up of MTB/MSB firms? https://bitcoinfoundation.org/members https://bitcoinfoundation.org/members
mtgx 13y ago
That's okay, but what does that have to do with the Bitcoin Foundation? I hope they take them to Court.
gst 13y ago
The Bitcoin foundation does neither exchange or trade Bitcoins, nor does it release any Bitcoin client. Its only mission is to "standardize, protect and promote" the use of Bitcoin. Charging the Bitcoin foundations for violations against the money transmission laws would be like charging NRA for violations against firearm laws. This would be a very alarming precedent and would basically violate your rights for free speech.
- dustcoin 13y ago
  The best argument in favor of the C&D I can think of is that the Bitcoin Foundation pays a salary to the lead developer of the reference client and daemon.
  - gst 13y ago
    If you violate money transmission laws because you pay a salary to someone (without being a licensed money transmitter) there would be lots of people violating those laws in California.
    - dustcoin 13y ago
      I agree, I'm just speculating on California's justification for the C&D, assuming it isn't simply a result of ignorance of how bitcoin works and the role of the Bitcoin Foundation.
      - venomsnake 13y ago
        Isn't a simpler explanation that they are just stupid and didn't take 5 minutes to find out exactly who they are sending the letter to and just sent it to the first google result for bitcoin?
        anigbrowl 13y ago
        That's a two way street. I'm guessing the Bitcoin Foundation might have overlooked some of its due diligence obligations; it looks to me like CA is 'piercing the corporate veil' if you're familiar with that legal term.

by codex 13y ago

pelle 13y ago

Yet the Bitcoin foundation is neither a operator of a virtual currency service or an exchanger according to FinCEN rules. Tradehill and Coinbase are based out of California and are following all federal and state rules.

quackerhacker 13y ago
I thought Coinbase was based out of SF and even backed by YC? Not sure though, seeing on the privacy page an Oregon address. https://coinbase.com/about https://coinbase.com/about
- rdl 13y ago
  If you google that address, it is an old address for earth class mail, a commercial mail scanning/forwarding service. (I use them too; they rock if you move a lot, or live overseas.)
jeremyw 13y ago
Interesting that you say that. Coinbase is verifiably registered with FinCEN, but not the states, as far as I can see. (Square, mentioned in the article, actually is registered in California.) http://www.fincen.gov/financial_institutions/msb/msbstateselector.html http://www.fincen.gov/financial_institutions/msb/msbstatesel... http://www.dfi.ca.gov/directory/money_transmitters.html http://www.dfi.ca.gov/directory/money_transmitters.html

vessenes 13y ago

As you might guess, we have deep expertise on-hand for the Foundation as to MTB/MSB laws, and can confidently state we do not engage in MTB or MSB activity at the Bitcoin Foundation; we're just a member organization. The state of California is blanket C&D-ing all Bitcoin businesses.

genwin 13y ago
Given the online ads included in the letter, it appears they googled for "bitcoin" and used a screen grabber to copy/paste the law text. It's sad how messed up the CA gov't has gotten.
- vessenes 13y ago
  Yes, this seems likely.
codex 13y ago
I wouldn't be surprised if the C&D were blanket. That said, when you Google for "Bitcoin Foundation" you see an "About" section in the #1 result (your website) which begins, "Our mission is to help people exchange...". I wouldn't put it past the state not to have read any further. ;-)
anigbrowl 13y ago
OK, but isn't it a fact that the Bitcoin Foundation's membership is made up of MTB/MSB firms? https://bitcoinfoundation.org/members https://bitcoinfoundation.org/members

mtgx 13y ago

That's okay, but what does that have to do with the Bitcoin Foundation? I hope they take them to Court.

gst 13y ago

The Bitcoin foundation does neither exchange or trade Bitcoins, nor does it release any Bitcoin client. Its only mission is to "standardize, protect and promote" the use of Bitcoin. Charging the Bitcoin foundations for violations against the money transmission laws would be like charging NRA for violations against firearm laws. This would be a very alarming precedent and would basically violate your rights for free speech.

dustcoin 13y ago
The best argument in favor of the C&D I can think of is that the Bitcoin Foundation pays a salary to the lead developer of the reference client and daemon.
- gst 13y ago
  If you violate money transmission laws because you pay a salary to someone (without being a licensed money transmitter) there would be lots of people violating those laws in California.
  - dustcoin 13y ago
    I agree, I'm just speculating on California's justification for the C&D, assuming it isn't simply a result of ignorance of how bitcoin works and the role of the Bitcoin Foundation.
    - venomsnake 13y ago
      Isn't a simpler explanation that they are just stupid and didn't take 5 minutes to find out exactly who they are sending the letter to and just sent it to the first google result for bitcoin?
      - anigbrowl 13y ago
        That's a two way street. I'm guessing the Bitcoin Foundation might have overlooked some of its due diligence obligations; it looks to me like CA is 'piercing the corporate veil' if you're familiar with that legal term.