Quote from: figmentofmyass on January 09, 2021, 08:38:06 AM

in the USA, you're allowed to sell bitcoins for cash without worrying about money transmission laws (AML/KYC)---up until the point that you are considered "a business":

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"'As a business' is the qualifier that triggers the money transmission laws," Santori said over the phone. "If you come to me and ask to buy $100 worth of bitcoin and I sell that to you, in no state is that sole activity considered to be money transmission. It must occur in a sufficient frequency and volume and you have to accept all comers. It's a fact-based test."
https://www.vice.com/en/article/j5qa7y/people-keep-getting-charged-with-a-crime-for-selling-bitcoin

does anyone know what frequency and volume thresholds might trigger FINCEN registration and reporting requirements? have there been any precedents set in the last few years? FINCEN's guidance is pretty vague.

take this case from 2017: https://www.justice.gov/usao-wdmo/pr/nixa-man-pleads-guilty-illegal-bitcoin-exchange

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By pleading guilty today, Klein admitted that he represented himself on the Internet to be a bitcoin exchanger. However, Klein was not a licensed money transmitter with the state of Missouri or with the Financial Crimes Enforcement Network, as required by federal and state law.

An undercover federal agent responded to an online advertisement posted by Klein. Klein told the undercover agent that his rate included a 10 percent commission “for an in-person $1,000 cash exchange.”

Between Feb. 6, 2015, and July 27, 2016, Klein, acting with another, met with two undercover federal agents on numerous occasions to exchange bitcoin for cash. Today’s plea agreement cites five separate transactions in which money (ranging from $1,000 to $15,000) was exchanged in person for an electronic transfer of bitcoin.

5 transactions over 1.5 years (for amounts as small as $1k) doesn't seem like very much. the press release highlights the fact that he advertised/represented himself as an exchanger---is that the more significant part?

going back to the quote from marco santori above, he says "you have to accept all comers". does that imply that if you are only contacting advertisers and not advertising yourself, and not representing yourself as an exchanger, that you won't be construed as a business?

I have taken the time to read some federal appellate cases on this matter and can tell you there is no exact number that qualifies as a business but most of the appellate decisions in the various circuit do state that the purpose of a business is to turn a profit (if it in fact does or does not is not pertinent) therefore charging a few for the service will always qualify as a business. The cases also specifically say that single transactions can never qualify. So if you are doing infrequent transactions and not charging a fee then you could never be convicted of 18 USC 1960 - the unlicensed MSB statute.

iamnothere12

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