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Yikes! Please tell me you consulted with a lawyer before posting this publicly? Even if you gave the OP the BTC at current rates SEC/Courts can make a case agai

by bushido 13y ago

Yikes! Please tell me you consulted with a lawyer before posting this publicly? Even if you gave the OP the BTC at current rates SEC/Courts can make a case against this sequence of events. It does not even have to be reported. I have nothing against you or Coinbase and I do sincerely hope I am wrong. This can have dire consequences on your current and future business(es). It would have been best to refund the withdrawal in its entirety or just credited it, to be used for a future transaction as that would have saved you guys from a world of pain. For any other service I would have given you Kudos for acting, albeit slowly, and applauded honesty(though not so much due to blaming it on the servers, which in a financial context is unacceptable). But for a business that a court can deem/classify as a financial institution (regardless if you consider yourself one), this could be considered as a admittance of wrong doing. edit: grammar

joonix 13y ago
Coinbase is not a bank. Or a financial institution. If it were, it'd have a charter and licenses. It's a merchant just like any other. You give them money in exchange for goods. No different than iTunes.
- bushido 13y ago
  It does not need to be licensed as a financial institution to be deemed as one. The courts can and will deem them that the company is subject to some of the rules and regulations governing the financial industry and up the charges against them when this enforced. I am purposely not saying 'if'. Because there is no possibility of this not being brought to a judge on the behest of SEC themselves or a consumer complaint. In layman terms: (1)they buy and sell BTC on behalf of clients and charge the client for the transaction including their fees. (2)they are an online payment processor of sorts. They will need to follow more regulations than Paypal, as paypal is also a digital wallet of sorts, but while it provides a conversion, they technically do not trade(buy/sell currencies) on behalf of clients.
  - blantonl 13y ago
    Bitcoin is not an official currency in the eyes of the law. Therefore, there are almost zero regulations that would apply to Bitcoin transactions, other than contract law.
    - bushido 13y ago
      You are right, botcoin is not a currency, but it is a security and it is traded on an exchange. Here's the definition of a security [Securities Act of 1933, Section 2(a)(1)]: The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

by bushido 13y ago

joonix 13y ago

Coinbase is not a bank. Or a financial institution. If it were, it'd have a charter and licenses. It's a merchant just like any other. You give them money in exchange for goods. No different than iTunes.

bushido 13y ago
It does not need to be licensed as a financial institution to be deemed as one. The courts can and will deem them that the company is subject to some of the rules and regulations governing the financial industry and up the charges against them when this enforced. I am purposely not saying 'if'. Because there is no possibility of this not being brought to a judge on the behest of SEC themselves or a consumer complaint. In layman terms: (1)they buy and sell BTC on behalf of clients and charge the client for the transaction including their fees. (2)they are an online payment processor of sorts. They will need to follow more regulations than Paypal, as paypal is also a digital wallet of sorts, but while it provides a conversion, they technically do not trade(buy/sell currencies) on behalf of clients.
- blantonl 13y ago
  Bitcoin is not an official currency in the eyes of the law. Therefore, there are almost zero regulations that would apply to Bitcoin transactions, other than contract law.
  - bushido 13y ago
    You are right, botcoin is not a currency, but it is a security and it is traded on an exchange. Here's the definition of a security [Securities Act of 1933, Section 2(a)(1)]: The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.