Quote from: repentance on July 22, 2011, 12:01:37 AM

So you're saying that Disney dollars, Facebook credits, Wow gold, and frequent flyer points are all illegal in the US because they can be used to buy something and don't have a US dollar value?

Bitcoins in and of themselves are almost certainly without a defined legal status at this point in time - after all, they're essentially just an electronic token and there are literally thousands of different types of those in use. What might be illegal in some jurisdictions are some of the services which are associated with Bitcoin, but until some attempt at prosecution is made and a court rules on the matter, then little can be presumed. The law is about more than just statutes - it's also about precedent.

One area where Bitcoins may come under scrutiny soon is online gambling. The US Department of Justice has already taken action against online gambling sites and third party payment processors for accepting funds from US citizens for online gambling. It's unlikely that sites attempting to use Bitcoin to get around the US laws related to online gambling will succeed in claiming that they aren't "accepting funds for real money play".

I've offered to give answers to questions directed at me, but I don't want to misinform, so I'm going to duck this a little because the answers are legally complex and I'm not an expert. But I'll offer an example to illustrate what this topic is about.

In the US, there was/is a currency called "Liberty Dollars". It still exists, but it is illegal to use because it was ruled in a court that it is counterfeit US currency. It's issuer is facing years in prison. He promoted his alternative currency (AC) as a replacement for the US Dollar, and the US Treasury warned him to stop. His AC was a terrible currency because it was backed by silver, which is hoarded when the value is high and difficult to spend when the value is uncertain. People bought it for all kinds of reasons but there was never enough of it in circulation to interfere with commerce anywhere. However, he was warned for years, but used the warnings to gather attention, and so he was eventually prosecuted and found guilty of a variety of offenses.

The lesson that the US Treasury wants us to take from this, presumably, is to heed its rulings. This is why I think that what nations have officially said about Bitcoin is relevant, and I'd like to get a clearer picture of that so that I can better understand the story as it unfolds. Nobody really cares, I think, about those cute Disney Dollars, or other tiny currencies, and Bitcoin is also tiny but it advertises as a way to circumvent rules, is under scrutiny (according to news posts), and has a wildly fluctuating value...so the writing is probably on the wall.