Quote from: Bitco on July 04, 2013, 08:25:19 AM

Quote from: BitGo on July 03, 2013, 10:35:33 PM

The real meat in this letter is under Section C for "stored value." The Bitcoin Foundation says that Bitcoin is not stored value. This directly contradicts U.S. Department of Treasury FinCEN statements which say that the reason why Bitcoin operators need money transmitter licenses (or MSB licenses) is because BTC is stored value.

When did FinCEN state that bitcoin is stored value? Since 2011, FinCEN regulations have referred to "prepaid access" rather than "stored value", and they have never claimed that bitcoin is prepaid access either.

In a letter to Tangible Cryptography LLC, the State of Virginia did claim that bitcoin was stored value. However, the definition of stored value in the Virginia law is somewhat different than the California law and the former federal regulations.

FinCEN, via Bradley Stevens in 2011, told Bitcoin USA (now dissolved) that BTC is stored value [https://bitcointalk.org/index.php?topic=41155.0;all]. But even if the director of FinCEN had made an official statement about it, such statements are not legally binding, so they're only good for guidance. In addition, the Bitcoin community at large generally speculates that the government thinks Bitcoin is more likely to be covered as stored value rather than the other two money transmission subcategories (payment instruments and money received for transmission). It's a bold statement for the Foundation to say that Bitcoin is not stored value when the community has been guessing that our various governmental bodies thinks it is stored value (despite any nuanced differences in their definitions of stored value).

The Bitcoin Foundation does a good job here at addressing all three subcategories under which a Bitcoin operator can be pinned for money transmission. Even though it is striking that they claim Bitcoin is not stored value, it's also important that the Foundation says that Bitcoin is not covered under payment instruments or money received for transmission. Since, they claim, Bitcoin doesn't fall under any of these subcategories, then Bitcoin operators are not subject to money transmission regulation.

It seems the Bitcoin world would explode with huge success if the US & its states eventually decided that Bitcoin operators are not subject to money transmission regulation. Although, if this happens, it is practical to assume that the government would find some other way to regulate Bitcoin since the government holds a significant interest in preventing criminal financial transactions.

[please note this is not legal advice]