Quote from: DeathAndTaxes on June 03, 2013, 09:57:55 PM

Quote from: bitrick on June 03, 2013, 09:22:42 PM

The guidance doesn't make "anyone" an exchanger because there is an explicit exemption for "users" purchasing goods and services who are not in the business of buying and selling currency, so I disagree on that point as well.

You miss the point. Anyone who exchanges virtual currency for real currency is an exchanger is one way to interpret the guidance. So say MtGox becomes a MSB. Great now every on of MtGox clients would need to also. They all are "exchanging virtual currency for real currency". The guidance provides no exclusion that those exchanging with regulated exchangers are themselves exempt. This would make anyone who ever has or ever will exchange real currency need to register as an MSB. It seems implausible that is FinCEN intent however by the letter of the guidance it is what is stated.

The guidance is unclear, it is just my opinion but only clarity from FinCEN will resolve that lack of clarity for me. That is the point of an administrative ruling. It certainly is possible that the AR will result in more clear guidance one that advises that the example in section c is not binding any such trade of BTC for USD constitutes an "exchanger". The good news is it would remove ambiguity from the definition and force FinCEN to clean up their guidance. Is it FinCEN intent that anyone who ever buys or sells Bitcoins for real currency needs to register as a MSB? I really doubt it but if so the AR will require them to state so in black and white.

OK, I did miss that point on virtual -> real currency exchanges (as opposed to real->virtual) as that would not be entitled to the "Users" exemption as written, but I also think the regulation is clear enough on that activity, as I shall explain.

Even if you sell bitcoins for dollars, whether on an exchange or in a park in NYC, I disagree that "Anyone" is a money transmitter for that reason. The wording is: "An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person.10"

You still have to be an "administrator" or "exchanger" to fit that definition. Those terms are defined near the top of the guidance and both definitions state the person is "engaged as a business". That is the core issue from a legal point of view.

If I sell some bitcoins for dollars occasionally on mt gox, I consider that a personal activity. I'm not engaged as a business when I perform these actions. This is also why selling some Euros to a friend after a vacation is not a felony. However, if I advertised and held an auction for my bitcoins to a group of exchanges every week, then I'd be a business and would be covered by regulation.

It comes down to the definition of "business" and FinCen seems pretty confident that these terms have sufficient legal precedent (see the following link). I tend to agree. I know I am not engaged as a business with respect to my bitcoin activities and am confident a judge or jury would agree.

As I stated earlier, it is not clear how miners escape these regulations and that is where further clarification might help. One could argue that they are engaged as a business.

http://www.americanbanker.com/issues/178_104/fincen-chief-q-and-a-what-we-expect-from-digital-currency-firms-1059485-1.html?zkPrintable=1&nopagination=1