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Um, duh? That one is literally right in the Constitution (between regulating Coinage and control of interstate commerce).

by mpyne 13y ago

wmf 13y ago
Some people were (hypocritically) claiming that Bitcoin is not money and thus any regulations of money do not apply.
- Dylan16807 13y ago
  Both pro- and anti-bitcoin groups were rather split on whether it counted as money or not.
  - mpyne 13y ago
    Well the government itself issues money that's worth something simply because they think it is, so considering bitcoin as "money" is at least not inconsistent with what the government is already doing in this sphere. :)
    - betterunix 13y ago
      Actually fiat currencies have value because the government promises to accept them for tax purposes (and for various other purposes -- fees, fines, court settlements, etc.). The government does not "think" the money is worth something; the people think the law has meaning and is worth following, and so the law gives money its value. The relationship between money and law is a major reason (maybe the only reason) that currencies tend to be neatly partitioned along international borders.
deleted 13y ago
[deleted]
- Dylan16807 13y ago
  Those two statements are not inconsistent. "Papers" is not just about pulp, it's about the information encoded onto it. Bits don't have to be more than just bits to be protected. Therefore bits can be 'just information' under both clauses and get the result your original statement would have had. Note: I'm not saying I think this is the most reasonable way of interpreting the law, I'm just saying you haven't shown why it would be wrong.
julespitt 13y ago
The Constitutional provisions deal with the right of the Federal and State Governments to issue currency, not individuals or private organizations. Meanwhile, there has been a long history of minor private currencies in the US without legal interference. I haven't read the decision yet, but the justification in the article is weak. If Bitcoin is a currency because it can be exchanged for dollars and other real currencies, anything I can sell on Ebay is a currency as well. I guess the SEC will crack down on fraudulent dealers on ebay now.
- rayiner 13y ago
  Article I, Section 8 says that Congress may: "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;" So the Constitution gives Congress not just the right to issue currency, but to regulate both its own currency and other currencies. In any case, Shavers's argument was ridiculous to begin with. He claimed that his investments didn't fall under the umbrella of the SEC because Bitcoin isn't money. But the SEC regulates securities, not currency. A security is just a tradeable financial instrument. The subject of the security doesn't have to be, and often isn't, money. E.g. a share in a corporation is not backed by dollars, it's backed by an ownership stake in some legal entity.
  - julespitt 13y ago
    Article I, Section 8: Says nothing about "other currencies," only the value of its own coined money and of foreign coin. I don't see it. To be clear, I'm devil's advocate arguing that this probably shouldn't be an SEC case, not that he hasn't committed a prosecutable fraud. Securities always represent a legal obligation to something. A stock represents legal ownership of a legally recognized organization. If this guy wasn't making such binding obligations, as I suspect he wasn't, it isn't a securities issue - just fraud. Because applied this broadly, the SEC would therefore regulate as Securities Dealers: Ebay, Baseball Card publishers, and Blizzard's World of Warcraft.
    - rayiner 13y ago
      I think the gap you're trying to carve out for bitcoin between U.S. money and "foreign coin" is a narrow and tenuous one. You've got a good point that, depending on how Shavers's investment was structured, he might not have been issuing anything that could be called a security. But he was billing it as a "bitcoin hedge fund" so if there was some sort of tradable interest in the fund that would in fact be a security.
ferdo 13y ago
There were many private currencies in the 19th century that the government never claimed power over. Here's one example: http://en.wikipedia.org/wiki/Christopher_Bechtler#The_Bechtler_Private_Mint http://en.wikipedia.org/wiki/Christopher_Bechtler#The_Bechtl... This move with regard to Bitcoin is merely Bank.Gov trying to protect its monopoly on the issuing of currency.
- dangoldin 13y ago
  Some still exist: http://en.wikipedia.org/wiki/Ithaca_Hours http://en.wikipedia.org/wiki/Ithaca_Hours
- stinkytaco 13y ago
  I don't know that the government has any illusions over the issuance of currency. I can spend and exchange my foreign currency in the US, correct? I can take my US dollars and transfer them and get foreign currency in another country as well. What this says is that any commercial exchange is subject to government regulation.
  - ferdo 13y ago
    The US government claiming power over the currency its banking corporation issues is one thing. I don't know why people just accept, without question, the claim that the government has regulating authority over a currency that it doesn't issue.
    - rayiner 13y ago
      Because the Article I, Section 8 says that Congress has the power to: "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"
      - ferdo 13y ago
        This isn't Congress doing the "regulating". It's the Executive Branch.
jlgreco 13y ago
It is my impression that earlier this year the IRS, in some non-binding way (a press release or something?) said that they suggested people treat bitcoin as a commodity for tax purposes, not a currency. I may be recalling incorrectly since I can't find anything saying that now, but whether it is a currency or a commodity is certainly something that has been frequently discussed. The important part of this news seems to be that bitcoin is indeed going to be a currency. That currencies can be regulated is not news at all.
- dragonwriter 13y ago
  This case is almost completely unrelated to Bitcoin's treatment under tax law; the court finding that Bitcoin is "money" for purpose of the Exchange Act and thus that transactions involving it meet that prong of the test for whether they are "securities" transactions subject to that Act does not say anything about their treatment under tax law. In computing terms, the definition of a local variable in one scope doesn't tell you anything about a variable with the same name in a different scope.

Um, duh? That one is literally right in the Constitution (between regulating Coinage and control of interstate commerce).

by mpyne 13y ago

Um, duh? That one is literally right in the Constitution (between regulating Coinage and control of interstate commerce).

wmf 13y ago

Some people were (hypocritically) claiming that Bitcoin is not money and thus any regulations of money do not apply.

Dylan16807 13y ago
Both pro- and anti-bitcoin groups were rather split on whether it counted as money or not.
- mpyne 13y ago
  Well the government itself issues money that's worth something simply because they think it is, so considering bitcoin as "money" is at least not inconsistent with what the government is already doing in this sphere. :)
  - betterunix 13y ago
    Actually fiat currencies have value because the government promises to accept them for tax purposes (and for various other purposes -- fees, fines, court settlements, etc.). The government does not "think" the money is worth something; the people think the law has meaning and is worth following, and so the law gives money its value. The relationship between money and law is a major reason (maybe the only reason) that currencies tend to be neatly partitioned along international borders.

deleted 13y ago

[deleted]

Dylan16807 13y ago
Those two statements are not inconsistent. "Papers" is not just about pulp, it's about the information encoded onto it. Bits don't have to be more than just bits to be protected. Therefore bits can be 'just information' under both clauses and get the result your original statement would have had. Note: I'm not saying I think this is the most reasonable way of interpreting the law, I'm just saying you haven't shown why it would be wrong.

julespitt 13y ago

The Constitutional provisions deal with the right of the Federal and State Governments to issue currency, not individuals or private organizations. Meanwhile, there has been a long history of minor private currencies in the US without legal interference. I haven't read the decision yet, but the justification in the article is weak. If Bitcoin is a currency because it can be exchanged for dollars and other real currencies, anything I can sell on Ebay is a currency as well. I guess the SEC will crack down on fraudulent dealers on ebay now.

rayiner 13y ago
Article I, Section 8 says that Congress may: "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;" So the Constitution gives Congress not just the right to issue currency, but to regulate both its own currency and other currencies. In any case, Shavers's argument was ridiculous to begin with. He claimed that his investments didn't fall under the umbrella of the SEC because Bitcoin isn't money. But the SEC regulates securities, not currency. A security is just a tradeable financial instrument. The subject of the security doesn't have to be, and often isn't, money. E.g. a share in a corporation is not backed by dollars, it's backed by an ownership stake in some legal entity.
- julespitt 13y ago
  Article I, Section 8: Says nothing about "other currencies," only the value of its own coined money and of foreign coin. I don't see it. To be clear, I'm devil's advocate arguing that this probably shouldn't be an SEC case, not that he hasn't committed a prosecutable fraud. Securities always represent a legal obligation to something. A stock represents legal ownership of a legally recognized organization. If this guy wasn't making such binding obligations, as I suspect he wasn't, it isn't a securities issue - just fraud. Because applied this broadly, the SEC would therefore regulate as Securities Dealers: Ebay, Baseball Card publishers, and Blizzard's World of Warcraft.
  - rayiner 13y ago
    I think the gap you're trying to carve out for bitcoin between U.S. money and "foreign coin" is a narrow and tenuous one. You've got a good point that, depending on how Shavers's investment was structured, he might not have been issuing anything that could be called a security. But he was billing it as a "bitcoin hedge fund" so if there was some sort of tradable interest in the fund that would in fact be a security.

ferdo 13y ago

There were many private currencies in the 19th century that the government never claimed power over. Here's one example: http://en.wikipedia.org/wiki/Christopher_Bechtler#The_Bechtler_Private_Mint http://en.wikipedia.org/wiki/Christopher_Bechtler#The_Bechtl... This move with regard to Bitcoin is merely Bank.Gov trying to protect its monopoly on the issuing of currency.

dangoldin 13y ago
Some still exist: http://en.wikipedia.org/wiki/Ithaca_Hours http://en.wikipedia.org/wiki/Ithaca_Hours
stinkytaco 13y ago
I don't know that the government has any illusions over the issuance of currency. I can spend and exchange my foreign currency in the US, correct? I can take my US dollars and transfer them and get foreign currency in another country as well. What this says is that any commercial exchange is subject to government regulation.
- ferdo 13y ago
  The US government claiming power over the currency its banking corporation issues is one thing. I don't know why people just accept, without question, the claim that the government has regulating authority over a currency that it doesn't issue.
  - rayiner 13y ago
    Because the Article I, Section 8 says that Congress has the power to: "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"
    - ferdo 13y ago
      This isn't Congress doing the "regulating". It's the Executive Branch.

jlgreco 13y ago

It is my impression that earlier this year the IRS, in some non-binding way (a press release or something?) said that they suggested people treat bitcoin as a commodity for tax purposes, not a currency. I may be recalling incorrectly since I can't find anything saying that now, but whether it is a currency or a commodity is certainly something that has been frequently discussed. The important part of this news seems to be that bitcoin is indeed going to be a currency. That currencies can be regulated is not news at all.

dragonwriter 13y ago
This case is almost completely unrelated to Bitcoin's treatment under tax law; the court finding that Bitcoin is "money" for purpose of the Exchange Act and thus that transactions involving it meet that prong of the test for whether they are "securities" transactions subject to that Act does not say anything about their treatment under tax law. In computing terms, the definition of a local variable in one scope doesn't tell you anything about a variable with the same name in a different scope.