Quote from: Malophor on October 23, 2012, 05:22:00 PM

Here is the transcript:

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"Hello this call is for . This is Anthony from FinCEN. I'm getting back to you after a few weeks. I apologize for the delay. I just wanted to make sure I got a proper answer for you. The bottom line answer for the scenario you describe to us you would be a Money Service Business. That is because you would be a money transmitter purchasing a valuable and using it as money and doing it by means of transmission. So, if that is enough I hope that helps you. In any case, feel free to call us back. Have a good day."

Interesting. What was the scenario? The reason I ask is that Money Transmitter is a very tough license to get. Almost every state requires a MT license and it involves posting a bond, undergoing background checks of beneficial owners, detailed third party auditing of financials, proof of sufficient capital reserves (i.e. sworn statement by bank officers, etc). So merely registering with FinCEN wouldn't make one compliant as a money transmitter. If anything it would be used as evidence by the states as to your willful non-compliance. To my knowledge no Bitcoin related business has a Money Transmitter license (type 409 MSB).

Simply "purchasing a valuable" and paying customers doesn't make one a money transmitter. For example the largest retail gold buyer in the US (APMEX) doesn't have a money transmitter license (or any MSB license). They buy "purchasing a valuable" (gold) and pay sellers via a transmission (ACH or bank wire).

So I wonder what exactly you described?

FinCEN definition of a "money transmitter".
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=d5570d7646c5fc13fe1fa42a61d1dcf1&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.1.3.1

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(5) Money transmitter (i) In general.
(A) A person that provides money transmission services. The term money transmission services means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. Any means includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system; or

(B) Any other person engaged in the transfer of funds.

(ii) Facts and circumstances; Limitations. Whether a person is a money transmitter as described in this section is a matter of facts and circumstances. The term money transmitter shall not include a person that only:

(A) Provides the delivery, communication, or network access services used by a money transmitter to support money transmission services;

(B) Acts as a payment processor to facilitate the purchase of, or payment of a bill for, a good or service through a clearance and settlement system by agreement with the creditor or seller;

(C) Operates a clearance and settlement system or otherwise acts as an intermediary solely between BSA regulated institutions. This includes but is not limited to the Fedwire system, electronic funds transfer networks, certain registered clearing agencies regulated by the Securities and Exchange Commission (SEC), and derivatives clearing organizations, or other clearinghouse arrangements established by a financial agency or institution;

(D) Physically transports currency, other monetary instruments, other commercial paper, or other value that substitutes for currency as a person primarily engaged in such business, such as an armored car, from one person to the same person at another location or to an account belonging to the same person at a financial institution, provided that the person engaged in physical transportation has no more than a custodial interest in the currency, other monetary instruments, other commercial paper, or other value at any point during the transportation;

(E) Provides prepaid access; or

(F) Accepts and transmits funds only integral to the sale of goods or the provision of services, other than money transmission services, by the person who is accepting and transmitting the funds.

The agents response would seem to indicate he is stating that bitcoin is a "currency substitute" which would be a rather broadening of the definition. Bitcoin has no pre-designated value, there is no guaranteed redemption, no insurance or backing (in the sense of capital reserves). If it is a "currency substitute" than essentially anything is. Network bandwidth, or electricity could be viewed as a currency substitute.

Now it may be FinCEN declaration that bitcoin IS a currency substitute (they certainly "can" make that declaration) however given that the central axis around MSB/MT requirement it should have been explicitly stated "..... since bitcoin is a currency substitute ... the scenario you described ...". To not do so is well weird.