Quote from: mr_random on June 15, 2013, 08:53:26 PM

Quote from: DeathAndTaxes on June 14, 2013, 08:50:44 PM

No please don't add misinformation.

FinCEN has definitively and clearly indicated that an entity which exchanges virtual currency for real currency is NOT a "(1) Currency dealer or exchanger"; they are a "(5) Money transmitter". All of it is laid out in the cite above. Please don't try to apply common sense to the law. While you may "think" it would "make sense" for an exchanger to be under category 1 you would be wrong. It is one thing to be wrong, it is another thing to spread misinformation.

You're actually completely wrong. See the recent FinCEN guidance pdf: http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf

Note on page 2, under the heading "Definitions of User, Exchanger,and Administrator" it says: "An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency".

I cited that document. Read further and you will realize why I am correct (I also included cites). "Exchanger" is not a " Currency dealer or exchanger". Don't try to apply common sense to the law. Laws have absolutely nothing to do with common sense. Read further into the guidance on what type of msb a virtual currency exchanger is.

It isn't "currency dealer or exchanger" (which is a sub type of MSB regulations). Yes it would make logical sense than a virtual currency exchanger would fall under the sub type which has "exchanger" in its name. Once again don't try to apply common sense to the law, you will fail.

Further in the guidance FinCEN puts it in absolute black and white. Once again before saying "I am wrong". This is the exact wording of the document you cited.

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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 FinCENs regulations

AND

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" ... a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations."

Before responding I would recommend (a recommendation which likely will fall on deaf ears) that you STOP and read the entire guidance from the first line to the last one. Don't skim it, don't try to speed read it, don't try to look for the once sentence that you think means what you think it means. Read it completely every word. It is in absolute black and white.

What you say is "completely wrong" is absolutely right. There are only 6 types of MSBs. No more, no less. They all have exact definitions in the eCFR. When registering as a MSB you must select one or more of the following six types. You can't select none, you can't write in a new type. All MSBs must be one these six.

(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.

The law doesn't allow any other type of MSB. FinCEN can't write new law. The guidance is there way of putting Bitcoin (a square peg) into one of the existing definitions (a round hole). While it doesn't make common sense the only category which can even be stretched to cover exchanging virtual currency is money transmitter. That is what the guidance says (if you read the whole thing). You will notice there is no "exchanger" or "virtual currency exchanger" in the list. Congress would need to pass new law for that to happen. A virtual currency exchanger is a "(5) Money transmitter".

Exchanging virtual currency for real currency = (5) Money transmitter
Exchanging real currency for virtual currency = (5) Money transmitter
Exchanging on real currency for another real currency = (1) Currency dealer or exchanger