Quote from: burnside on March 19, 2013, 04:31:14 AM

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a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.

Is silver an "other value that substitutes for currency"?

I don't know.

I read it to state that if you're selling metal you own, it's okay, but if you are exchanging to USD in order to complete the sale with a third party, it's illegal.

Looking it over quite a few times I'm now convinced that "funds" such as GOLD are not targeted by this report. They don't violate section 1, 2 or 3, which is to say there is no "third party that is not part of the currency or commodity transaction".

A few people on IRC were commenting that, basically, things will be OK so long as you never mix bitcoins with "legal tender". I'd add to that "on behalf of someone else". So a fund would just need to be careful about how they buy and sell precious metals. Basically don't buy in BTC from any coin shop that is not a registered money transmitter and which performs a currency conversion on your behalf in order to complete your order. This means any kind of shop which drop shops, or orders from a third party supplier after you send them bitcoins. As a fund, you wouldn't be able to get around this by doing the conversion yourself and then ordering from, say APMEX. Because then you would be doing a currency conversion and would need to be a registered money transmitter yourself.

I'd speculate there are two reasons why this is being done this way. One, they don't want anonymous people doing bitcoin transactions anymore. So they will de-anonymize it by causing everyone who performs money transactions to "know your customer" or lose their license. Second, bitcoin has become big enough that governments realize they can make money by taxing/regulating it. I suspect a $1,000 money transmitter license is just the beginning. I believe jgarzik's quote will become famous;

Quote from: jgarzik on March 19, 2013, 12:20:33 AM

tl;dr... bitcoins are legal

I think this is what will send bitcoin to $100. It's "legal" now. Big business can move in.