Quote from: Kluge on May 17, 2013, 07:19:44 PM

Hey! Wanna play, uh... five-ish sometimes-loaded questions? (just as speculation, not legal advice)

Sure.

Quote from: Kluge on May 17, 2013, 07:19:44 PM

If MtGox were to become compliant, do you think they'd need both federal and state FinCEN/MSB compliance (assuming they don't latch onto a national bank/CU somehow)? Most people seem under the impression you can just register with FinCEN and it's done - woohoo, you're fully compliant, and this is the "compliance" most BTC MSBs seem to be talking about. But, these companies do business in all 50 states, and all these states have their own laws, licenses, and usually crazy-expensive fees.

Yes. Based on my understanding of how MtGox handles money, it and it's subsidiaries are - under the current statutory regime, required to register with FinCEN, together with every state in which they are transmitting money under that state's MSB laws. Depending upon how they do their business, they are likely required to register in every state with an MSB statute.

Quote from: Kluge on May 17, 2013, 07:19:44 PM

Am I wrong, or is federal FinCEN registration as a MSB not enough?

You are correct.

Quote from: Kluge on May 17, 2013, 07:19:44 PM

Do you know of any US-serving exchanges which you believe probably are fully compliant?

Not a single one.

Quote from: Kluge on May 17, 2013, 07:19:44 PM

Do you believe the USG (particularly, the courts) will accept Bitcoin being treated as a currency, and do you think that premise they're seizing Gox due to should be legally challenged? If you think it should be challenged, who should be challenging it? In an niche economy of startups, maybe we should all chip-in for a legal team to challenge the definition of BTC as a currency?

BTC will be considered a currency or a commodity depending upon the particular regulatory framework applied. Generally speaking, for tax purposes, BTC is treated as a sort of commodity. Income is realized when BTC is converted to fiat, goods or services. I believe this will change once BTC is more widely-accepted in exchange for goods and services. But for MSB purposes, BTC has its feet planted firmly in currency, and the entire money transmitter regulatory framework applies. As to challenging this designation, well, where to start? The bar for challenging an administrative rule is a very high one: the rule must be "arbitrary and capricious". These rules don't strike me as such. In any event, the cost of challenging the rules would likely top a million dollars for competent litigators in the field to bring such a case to completion.

Quote from: Kluge on May 17, 2013, 07:19:44 PM

For almost all of us, we've treated Bitcoin as a commodity rather than a currency for tax purposes - especially relevant because complying with tax regulations as a miner would be an enormous, practically unfeasible pain in the ass. Still, AFAIK nobody's really bringing this up. The implications of letting FinCEN and other bureaucracies call Bitcoin a currency seem pretty unexplored, and there are people just saying "it won't affect me, I'm in the UK" when the US has a tendency for its precedents/definitions to be adopted elsewhere. Do you think the Bitcoin community has under-reacted to the likely changes in definition of Bitcoin will bring, or is it appropriate just to wait until we're explicitly told by a government we're doing something wrong (IF we're doing something wrong)?

I think the regulators are really struggling with this issue. If I had my way, the larger players in the BTC community would fund a competent industry group that would begin a dialogue with the appropriate policy makers.