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Bitcoin Token Maker Suspends Operation After Hearing From Federal Gov't

timothy posted about 9 months ago | from the if-the-artifact-is-a-crime-why-not-the-system? dept.

Bitcoin 258

First time accepted submitter Austrian Anarchy writes with this story via Reason (and based on a report at Wired) about a maker of physical Bitcoin tokens. Quoting from Reason's take: "Mike Caldwell ran a business called Casascius that printed physical tokens with a bitcoin digital key on it, key hidden behind a tamper proof strip. He'd charge $50 worth of bitcoin to print a bitcoin key you sent him via computer on this token. Cool stuff--a good friend of mine found one sitting unnoticed in her tip jar from an event at which she sold her artisan lamps from 2011 and was naturally delighted given the nearly 1000x increase in value of a bitcoin since then. So, you're making something fun, useful, interesting, harmless--naturally the federal government is very concerned and wants to hobble you. 'Just before Thanksgiving, [Caldwell] received a letter from the Financial Crimes Enforcement Network, or FINCEN, the arm of the Treasury Department that dictates how the nation’s anti-money-laundering and financial crime regulations are interpreted. According to FINCEN, Caldwell needs to rethink his business. "They considered my activity to be money transmitting," Caldwell says. And if you want to transmit money, you must first jump through a lot of state and federal regulatory hoops Caldwell hasn't jumped through.'"

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Stock Certificates (1)

Anonymous Coward | about 9 months ago | (#45675483)

How is what he was doing different from printing a stock certificate?

Re:Stock Certificates (1, Troll)

MickyTheIdiot (1032226) | about 9 months ago | (#45675515)

Yes. The printer of stock certificates have infinite more lawyers.

Re:Stock Certificates (3, Funny)

ackthpt (218170) | about 9 months ago | (#45675567)

How is what he was doing different from printing a stock certificate?

Nobody prints stock anymore. It's all done with a confirmation that you hold X shares.

On a different tangent, the value and desirability of a token you can no longer order means they will skyrocket in value. Well played, federable gummint.

Re:Stock Certificates (1)

fractoid (1076465) | about 9 months ago | (#45676037)

So how is this coin different from a "confirmation that you hold X bitcoins"? Transferability or something?

Re:Stock Certificates (0)

Anonymous Coward | about 9 months ago | (#45675631)

How is what he was doing different from printing a stock certificate?

Well, on the one side we're talking about stock certificates...on the other, we're talking about bitcoins. #obvious

Re:Stock Certificates (2, Insightful)

Anonymous Coward | about 9 months ago | (#45675651)

because stock isn't money...

it's more like bearer bonds (3, Insightful)

YesIAmAScript (886271) | about 9 months ago | (#45675853)

And issuance of stock certificates. This person is allowed to continue his work if he works according to the regulations.

Same with those who issue stock certificates.

Bearer bonds are so heavily regulated that you never see them anymore in the US, some say they are essentially illegal in the US now.

Far from harmless fun... but (5, Insightful)

Infestedkudzu (2557914) | about 9 months ago | (#45675491)

the government is still just trying to maintain control. bitcoins going physical would be huge.

Re:Far from harmless fun... but (5, Insightful)

Anonymous Coward | about 9 months ago | (#45675595)

What he is doing is, in fact, money transferring. He takes money and transfers it. That defines his activity. Which means he needs to keep records. Why do people involved in money transferring need to keep records? To prevent money laundering.

When a bitcoin moves from one wallet to another, a public record is made. Bitcoins are the least anonymous money system imaginable; the morons who claimed that bitcoins are anonymous because money laundering would be legal with bitcoins are morons.

But this guy has found a way of anonymously transferring bitcoins without explicit money laundering.

That means he needs to keep records.

If instead he was a 7-11 and handing out those things as change from transactions, he would not be engaged in money transferring, and would not need to keep records.

Re: Far from harmless fun... but (0)

Anonymous Coward | about 9 months ago | (#45675679)

I guess I don't understand the concept of transferring money. Is selling things for dollars considered transferring money? Isn't he simply accepting $50 worth of bitcoin, and in exchange giving the buyer a token that can be used as bitcoin wallet, but doesn't actually have any bitcoin on it upon receipt of the customer?

Re: Far from harmless fun... but (1)

Wingman 5 (551897) | about 9 months ago | (#45675731)

That's the thing. the article never says if the tokens where empty or not. If he charged $50 and put $40 on the token (or whatever he wanted to charge as a handling fee) then he most certainly would be transferring money. But if they where empty I see your argument.

Re: Far from harmless fun... but (4, Interesting)

TerryMathews (57165) | about 9 months ago | (#45675767)

Selling "things" for money is not transferring money.
Selling stored value cards, like gift cards (which I think is the closest physical analogy), is transferring money and monitored by FinCEN.

Re: Far from harmless fun... but (2)

camperdave (969942) | about 9 months ago | (#45675809)

Ah! So he's selling wallets?

Re: Far from harmless fun... but (1)

mythosaz (572040) | about 9 months ago | (#45675959)

I was going to say, "I can transfer bitcoins, bypassing the transaction chain, just by giving people a wallet face-to-face."

If he's handing out wallets, what's the password to them? Are they all the same?

Re: Far from harmless fun... but (4, Informative)

Mitsoid (837831) | about 9 months ago | (#45676189)

If he sold wallets, he wouldn't have issues. He's selling wallets with other peoples money in it, or could be (the no one knows, there is no oversight... and that's the problem). And he's not keeping track of who gave him the money, or where it's going, and he's not providing the information to authorities. It's possible he's pre-loading these coins with values (e.g. $25, 50), and mailing them to people after he takes his fee.

It's basically the formula for money laundering, as the bitcoin trail ends with him, and 'clean' money can come out.

Re:Far from harmless fun... but (0)

Anonymous Coward | about 9 months ago | (#45675761)

Why do people involved in money transferring need to keep records? To prevent money laundering.

In the land of the free and the home of the brave, I would think freedom and privacy would be more important than 'safety' from money laundering. I guess, much like we let our government grope people at airports in an effort to stop terrorists, this is yet another example of how we're not as free as we like to pretend we are.

the morons who claimed that bitcoins are anonymous because money laundering would be legal with bitcoins are morons.

Bitcoin transfers are somewhat anonymous. A grand majority of people won't know who's actually behind those ip addresses or even what the bitcoins are being sent for.

Re:Far from harmless fun... but (0)

Anonymous Coward | about 9 months ago | (#45675981)

I don't see how the digital key leaves your wallet and then enters the coin, and then back into the digital world.

Can someone explain it in plain English? Why can't I send him my key and then spend it virtually while he makes his crafty token?

And yes, I know I am stupid, that is why I am asking the question. I am missing something very integral to the process.

Is money laundering the problem? (5, Insightful)

Okian Warrior (537106) | about 9 months ago | (#45676103)

What he is doing is, in fact, money transferring. He takes money and transfers it. That defines his activity. Which means he needs to keep records. Why do people involved in money transferring need to keep records? To prevent money laundering.

HSBC laundered hundreds of billions of dollars and admitted as such, yet the justice department decided to forego criminal prosecution [rollingstone.com] .

After much public outrage and senate hearings, the justice department settled on a $1.92 billion penalty [crainsnewyork.com] (against HSBC $18 billion annual profits).

How strongly do you agree with the federal government's stance on money laundering? From over here, it seems that the money laundering laws are only applied to the small players, used as "discretionary enforcement" as a tool of oppression. It's rule by thugs.

What's so bad about money laundering then?

Re:Is money laundering the problem? (1)

brainboyz (114458) | about 9 months ago | (#45676261)

Basically, the government hates that money laundering gives drug dealers a way to take "drug money" and give it a legit source.

Re:Is money laundering the problem? (1)

Okian Warrior (537106) | about 9 months ago | (#45676273)

Basically, the government hates that money laundering gives drug dealers a way to take "drug money" and give it a legit source.

Um... the HSBC money laundering, which the justice department declined to prosecute, was drug money laundering.

What's the difference you are attempting to point out?

Re:Far from harmless fun... but (2, Insightful)

gatfirls (1315141) | about 9 months ago | (#45675633)

Exactly. Why would we want this currency that only moves in value only .5% a month. We want a currency that moves 20-50% in hours.

Imagine the fun of grocery shopping with it by the time you get done shopping you have to either take out 1/2 of it or you get 50% off!

Re:Far from harmless fun... but (1)

mythosaz (572040) | about 9 months ago | (#45676097)

Since money is fungible, if you've got more in bitcoins than your average grocery bill, then you're already doing this every time you shop.

Re:Far from harmless fun... but (3, Funny)

gatfirls (1315141) | about 9 months ago | (#45676131)

Yes, my cashier usually spot checks forex to see how many bags of cheetos I can afford because the dollar value fluctuates wildly due to its nature as a purely speculative vehicle.

Absolute Defense (2, Funny)

The Cat (19816) | about 9 months ago | (#45675511)

Congress shall make no law.. abridging the freedom speech or of the press...

-- First Amendment to the Constitution of the United States

This aside from the fact that according to the Supreme Court of the United States, money is speech.

So if they rule Bitcoin is money, it's legal under the First Amendment's right to free speech, and if they rule it isn't money, it's legal under the First Amendment's right to a free press.

Case dismissed.

Re:Absolute Defense (1, Flamebait)

blue trane (110704) | about 9 months ago | (#45675603)

Money is speech in the same way that the Supreme Court ruled that education should be separate but equal, or that Dred Scott was property.

Re:Absolute Defense (0)

Anonymous Coward | about 9 months ago | (#45675667)

Try spreading a political message without spending money. Tell me how that works out for you.

Re:Absolute Defense (0)

Anonymous Coward | about 9 months ago | (#45675745)

I did it today on blogger. It was easy.

Re:Absolute Defense (1)

camperdave (969942) | about 9 months ago | (#45675823)

"Spreading of a political message should be done without money."

Easy-Peasy!

Re:Absolute Defense (1)

Qzukk (229616) | about 9 months ago | (#45676129)

I don't think you deserved a -1 for that, but you do deserve to be woken up to the harsh reality of the world where the US courts do whatever the fuck pleases them at the time and the government doesn't give a shit about what they said the law was yesterday when your tax dollars come to arrest you today.

The judge would likely rule that bitcoin is money then imprison you for contempt of court until you stop talking about Citizens United.

statists (0)

Anonymous Coward | about 9 months ago | (#45675529)

you statists deserve every bit of the totalitarian soviet gulag you've been voting for.

now the machine has the critical mass and demand of millions of free-and-reduced lunche-eating kids, it can do what-ever it wants.

it WAS called an experiment, and now we know the results are in: Liberty can last about 200 years. Tops.

Re:statists (0)

Anonymous Coward | about 9 months ago | (#45675733)

You're counting the first fifty years when only landed whites could vote? And you're counting the first century when only males could vote? Or the first 150 years when blacks really didn't count in the political process? There's more to liberty than economic freedom. And the hypercapitalist rising Asian economies have shown that economic freedom and deregulation does not necessarily translate to increased social freedom or prosperity. They're developing a new, more vicious, form of capitalism that is rapidly out-competing our timid domestic strain with its hobbling, quaint, notions of social welfare, free time, and happiness.

Artisan Lamps? (3, Funny)

ElementOfDestruction (2024308) | about 9 months ago | (#45675551)

Karma be damned. Artisan Lamps? What the fuck good is that without an Artisan light bulb, an artisan table, or an artisan fluffy hipster cat to sit next to it? Artisan lettuce with my heirloom artisan tomatoes and my artisan bacon with some artisan cheese on my artisan bread. Shove that artisan BLT down my artisan throat and wash it down with my artisan spring water.

Re:Artisan Lamps? (0)

Anonymous Coward | about 9 months ago | (#45675689)

How can you mention all that without artisan mayonnaise?? http://gothamist.com/2012/04/10/mayonnaise_store_opens_in_brooklyn.php

Re:Artisan Lamps? (1)

mythosaz (572040) | about 9 months ago | (#45676115)

Any article indistinguishable from an Onion article is sufficiently fucked up.

Re:Artisan Lamps? (0)

Anonymous Coward | about 9 months ago | (#45676101)

Artisan: The Titanium of the Post-Organic advertising era.

SHOCKED! (2)

gatfirls (1315141) | about 9 months ago | (#45675555)

....That it took this long for the feds to come in to play. No matter how neato your new currency is; if it's heavily used to electronically launder money and/or buy illegal items the days are numbered. Bitcoin -> Currency has and always will be the choke point the government(s) control. Unless they somehow setup a 100% bitcoin society but I don't know how that would work.

Re:SHOCKED! (1)

bames53 (300438) | about 9 months ago | (#45675791)

Bitcoin -> Currency has and always will be the choke point the government(s) control.

In this case is that the guy is being paid in Bitcoin and is effectively mailing Bitcoin back; That is, it's not a transfer between Bitcoin and another currency that's being regulated here.

Re:SHOCKED! (2)

gatfirls (1315141) | about 9 months ago | (#45675937)

This guy is being paid anonymously in what he considers a currency to send a physical representation of that to another location to which he does not verify is the originator. From my very limited understanding of the law that is what the feds are taking issue with.

Also, he is essence creating a physical currency. But I'll let the feds figure out what is and isn't legal with those coins and what is and isn't transferring funds.

Anyway, the point is that they are going to attack anywhere bitcoin tries to leave "the cloud". Silk road put bitcoin in the feds crosshairs and they aren't going away.

Re:SHOCKED! (3, Interesting)

Mitsoid (837831) | about 9 months ago | (#45676229)

That's a good point. I'm sure the feds would still have a problem if banks trade IOU's and dont actually move the money, but do it entirely in not-dollar-values...

Bank A: I'll pay you 500 Monopoly bitmoney for that loan package. But lets leave it to monopoly money so there's less taxes
Bank B: Okay. Sounds Good. Here.. have a 'free' gift.
Bank B: I want to cash in my 500 Monopoly bitmoney for your Widgets and such.
Bank A: Sure, here, have them for 'free'.

Seems fair that he has to play by the same rules. I dont care about bitcoins, but people claiming bitcoins are above any and all laws (including laws of the country they are being used in, and converted to physical objects in) is plain silly.

Re:SHOCKED! (1)

Anonymous Coward | about 9 months ago | (#45676113)

The biggest offender for money laundering and purchasing illegal goods is, by far, the USD in cash form.

Written in a biased way (4, Insightful)

earlzdotnet (2788729) | about 9 months ago | (#45675559)

This summary is written as if the government does nothing but enforce/give monopolies and is only out to serve the big companies... oh wait

Re:Written in a biased way (2)

blue trane (110704) | about 9 months ago | (#45675635)

Of course, the idea that government can't spend more than it takes in strengthens those ties. The way out is for us, the voters, to realize that government can and should empower its people with direct payments, instead of giving money to corporations. Create a basic income, and fund it with govt bonds bought by the Fed which can expand its balance sheet to pay for them, and return the interest to the Treasury so that the govt's borrowing costs are zero. The best way to fight corporate power is to provide individuals with a choice of not entering the free market.

Re:Written in a biased way (0)

Anonymous Coward | about 9 months ago | (#45675771)

Every time a government tries to exert too much control over the legal market, a black market springs into existence spontaneously. What you propose is exactly the opposite of that. I doubt that individuals would jump from corporate economic oppression to government economic oppression.

Re:Written in a biased way (1)

gandhi_2 (1108023) | about 9 months ago | (#45675781)

So to each according to his needs?

I know it's fun to bitch about corporate power, but corporations won't be shooting a pregnant wife in her own house (ruby ridge), putting you in a cage for taking pictures, or forcibly taking everything you own because they decided they have the power.

What YOU are talking about is the antithesis of free agency and liberty.

Re:Written in a biased way (5, Insightful)

maxwell demon (590494) | about 9 months ago | (#45676025)

I know it's fun to bitch about corporate power, but corporations won't be shooting a pregnant wife in her own house (ruby ridge),

If there were not a government making sure that such an action would be punished, I'd not be sure about that. After all, illegal corporations (also known as organized crime) are known to have no qualms to do such things.

putting you in a cage for taking pictures,

They don't need to because they know they can just call a government agency to do it for them. Otherwise, see my previous point.

or forcibly taking everything you own because they decided they have the power.

Oh, they do so as much as they can (see statuatory copyright infringement). Also, see my first point.

Re:Written in a biased way (1)

Anonymous Coward | about 9 months ago | (#45676041)

Basic income is the opposite of "to each according to his needs". Everyone gets a (small) amount to live on no matter what their needs are. If that's all you want in life, sit back and exercise your function as a participant in the mass market which capitalism needs to function. If you're more ambitious, like most people are, then you can start a business (less risk with your BI to fall back on), work, go back to school, or volunteer your time for charity. The individual would finally be freed from the tyranny of wage slavery. No one would be forced to work a pointless job to "legitimize" their existence and their spending power.

Re:Written in a biased way (0)

Anonymous Coward | about 9 months ago | (#45676077)

So to each according to his needs?

I know it's fun to bitch about corporate power, but corporations won't be shooting a pregnant wife in her own house (ruby ridge), putting you in a cage for taking pictures, or forcibly taking everything you own because they decided they have the power.

What YOU are talking about is the antithesis of free agency and liberty.

The would if they though they had the power and that doing so would make them more money (or prevent them from loosing money that they would loose if they did not take the action).

Businesses and government are basicly the same they're groups of people trying to enrich themselves through the means at their disposal.

The trick is ensuring that neither has the means to do anything particularly egregious without the consequences destroying them.

Re:Written in a biased way (0)

AK Marc (707885) | about 9 months ago | (#45676255)

No, the corporations don't get their hands dirty. They just pay the Government to do it, or convince the voters to pay the government to do it for them.

Re:Written in a biased way (2)

SuperKendall (25149) | about 9 months ago | (#45675869)

Of course, the idea that government can't spend more than it takes in strengthens those ties.

And the proof of that statement is what exactly? Because that has not been true of the U.S. for a LONG time.

Indeed the simple truth is the less control federal government exerts, the less interest corporations have in using money to gain some of that control. What you propose would draw corporations to the government like flies, to a vastly greater extent than you see now.

This isn't money transmitting how? (5, Insightful)

Anonymous Coward | about 9 months ago | (#45675585)

If I make giftcards to Amazon, say (I mean stupidly duplicating what Amazon already has in gift cards but you pay me and I sell you an Amazon gift code,) I'd expect to be regulated.

If I take your $50 bill and give you $100 british pounds, that's actually changing of money, but you can bet I'd expect to be regulated.

If you give me $25 and I give you a physical wood plaque with a bearer bond attached to it...I'd expect to be regulated.

If I manufacture casino chips suitable for trade in a casino and sell them, I'd expect to be regulated.

So, tell me again why this guy doesn't think what he's doing falls under any kind of regulatory enforcement?

Re:This isn't money transmitting how? (2, Funny)

Anonymous Coward | about 9 months ago | (#45675727)

bcuz government is evil and takn' away ma freedums!!!!!

END THE FED RAWWWW
BITCOINS R DA FUTURE

Re: This isn't money transmitting how? (0)

Anonymous Coward | about 9 months ago | (#45675811)

If you give me two dollars and I give you back a dollar in a frame how's that?

Re:This isn't money transmitting how? (0)

Anonymous Coward | about 9 months ago | (#45675903)

He's far more dodgy than that. He doesn't even know that he's sending the coins to the person who paid for them. He's as good as asking to be used as a money laundering service!

Re:This isn't money transmitting how? (5, Insightful)

Charliemopps (1157495) | about 9 months ago | (#45675905)

Because he doesn't believe any of the stuff you just said. Neither do I. Why do I need to be regulated? Why, when I got to the bank and deposit over $10,000 to I have to explain to the government how and where I got it? Why is that any of their business? This idea of money laundering is ludicrous. The idea that year after year, we need to give up more and more of our rights and privacy just to make the feds job of catching criminals easier baffles me. If we want to trade dollars for pounds or goldfish, fuck the government. They do not have a need to know about our transaction. And before you start talking about tax collection, there are a lot easier ways to collect taxes that are completely unavoidable. But if they implemented them, people would quickly become aware of just how much they were paying in taxes and likely revolt. This diffuse mess we have now serves to obfuscate just how much of your paycheck the feds end up with, and they like it that way.

Re:This isn't money transmitting how? (2, Insightful)

Anonymous Coward | about 9 months ago | (#45676031)

Because you drove there on a road that requires taxes, and have a reasonable amount of saftey, that requires taxes, and the bankers are regulated to not steal from you, which takes taxes.

So your large money movements need to be tracked to make sure you aren't in a cash business and trying to avoid taxes.

If you don't buy into that idea, stop posting on the internet that was created with... taxes.

Re:This isn't money transmitting how? (3, Interesting)

Okian Warrior (537106) | about 9 months ago | (#45675943)

If I make giftcards to Amazon, say (I mean stupidly duplicating what Amazon already has in gift cards but you pay me and I sell you an Amazon gift code,) I'd expect to be regulated.

Apropos of nothing, should Amazon expect to be regulated for making Amazon gift cards?

This "I'd expect to be regulated" is, quite frankly, astonishing. It brings to mind a sea of humanity, all going about their daily lives while intoning the phrase "I expect to be regulated".

If I'm doing something that lots of other businesses do unregulated(*), and assuming that the practice doesn't infringe on someone else's rights, my first impression is that I expect *not* to be regulated.

I wonder how you came to believe that particular mantra.

Re:This isn't money transmitting how? (4, Interesting)

pla (258480) | about 9 months ago | (#45676049)

So, tell me again why this guy doesn't think what he's doing falls under any kind of regulatory enforcement?

Because if you take my $50 bill and give me two $20s and a $10, we call that "making change", not "money laundering".

Casascius exchanged Bitcoins for other Bitcoins, plus a small fee for the cool novelty token. He didn't exchange BTC for USD, or vice-versa, or anything even remotely similar to that. He made frickin' change (albeit more literally than normal).


That said - I still have one first- and one second-gen Casascius 1BTC coins somewhere around here. They already traded at a good premium over their exchange rate, this news should send their collectable value through the goddamn roof! Thanks, FinCEN - I still hope you all choke to death on a bowl of hyena semen, but this time, you've really done me a solid!

Re:This isn't money transmitting how? (4, Funny)

mythosaz (572040) | about 9 months ago | (#45676133)

[ SUPER: "When you do only one thing, you do it better" ]

Customer #1: I needed to take the bus, but all I had was a five-dollar bill. I stopped by First Citiwide, and they were able to give me four singles and four quarters.

[ SUPER: "At First Citiwide Change Bank, We just make change" ]

Paul McElroy: We will work with the customer to give that customer the change that he or she needs. If you come to us with a twenty-dollar bill, we can give you two tens, we can give you four fives - we can give you a ten and two fives. We will work with you.

Customer #2: I went to my First Citiwide branch to change a fifty. I guess I was in kind of a hurry, and I asked for a twenty, a ten, and two fives. Their computers picked up my mistake right away, and I got the correct change.

[ SUPER: "Correct Change" ]

Paul McElroy: We have been in this business a long time. With our experience, we're gonna have ideas for change combinations that probably haven't occurred to you. If you have a fifty-dollar bill, we can give you fifty singles. [ SUPER: "We can give you fifty singles" ] We can give you forty-nine singles and ten dimes. We can give you twenty-five twos. Come talk to us. [ SUPER: "We can give you twenty-five twos" ] We are not going to give you change that you don't want. If you come to us with a hundred-dollar bill, we're not going to give you two-thousand nickels.. [ SUPER: "We're not going to give you two thousand nickels" ] - unless that meets your particular change needs. We will give you.. the change.. equal to.. the amount of money.. that you want change for!

[ SUPER: "At First Citiwide Change Bank, Our business is making change" ]

Bank Representative: That's what we do.

Re:This isn't money transmitting how? (2, Interesting)

roman_mir (125474) | about 9 months ago | (#45676075)

Wrong, people make money, not governments. People should expect freedoms, not regulations when they make money and transfer it among themselves. The only reason government uses violence to regulate money is because gov't is Mafia and it wants its cut.

Easy solution (0, Troll)

bazmail (764941) | about 9 months ago | (#45675601)

Just move your business to a free country.

Re:Easy solution (0)

Anonymous Coward | about 9 months ago | (#45675895)

Know any? I've been looking for one?

Re:Easy solution (1)

maxwell demon (590494) | about 9 months ago | (#45676053)

I've been looking for one?

How should we know if you have been looking for one?

Here's a hint for you: A question mark marks a sentence as question (therefore the name "question mark"). If it is not meant as a question, don't put a question mark at the end.

Re:Easy solution (0)

Anonymous Coward | about 9 months ago | (#45676223)

Did you really just type all that over a typo on the internet?? I think you need to reexamine your life.

Re:Easy solution (0)

Anonymous Coward | about 9 months ago | (#45676157)

Know any? I've been looking for one?

Somalia, the libertarian paradise, of course. Have a nice trip.

Re:Easy solution (1)

Anonymous Coward | about 9 months ago | (#45676177)

You should try North Korea, the statist paradise, idiot.

You can't have your cake and eat it too.... (1, Insightful)

Anonymous Coward | about 9 months ago | (#45675609)

Bitcoin proponents want the benefits of recognition and legitimacy as a real currency. Yet when they finally start getting it, they don't want the responsibilities that come with it. You can't pick and choose!

If bitcoin is a currency, then yes, he is transmitting money by accepting bitcoins and sending back a physical manifestation of it.

Re:You can't have your cake and eat it too.... (4, Interesting)

bazmail (764941) | about 9 months ago | (#45675649)

Why does it automatically follow that the exchange of trust, which is what currency essentially is, between willing participants must involve some self appointed middle man with the power of veto?


Bitcoin users are not against regulation per se, but the regulators must be able to explain why they should have that power.

Re:You can't have your cake and eat it too.... (0)

Anonymous Coward | about 9 months ago | (#45675693)

currency is many things, "exchange of trust" is not one of them.

but anyway... once you set yourself up as a service within a number of regulated areas, you need to follow the rules

the rules are to protect consumers and other participants and to ensure no unscrupulous activity goes on

if not the government, then who can everyone agree to regulate? private corporations? private citizens? how can any uniform standard of conduct and enforcement be applied if either of those latter two are used?

Re:You can't have your cake and eat it too.... (1)

bames53 (300438) | about 9 months ago | (#45675843)

the rules are to protect consumers and other participants

There are two people involved: the guy printing the token and the guy who wants the token printed. If neither of these people want to be protected, or they've taken other measures on their own, why should they be protected by a third party that neither of them wants involved? To me that sound a bit like a 'protection' racket.

Re:You can't have your cake and eat it too.... (1)

Oligonicella (659917) | about 9 months ago | (#45675923)

There are two people involved:

Incorrect. If BitCoin is a currency, then subsequent recipients are involved. This is only one link in the transaction chain for that "currency".

Re:You can't have your cake and eat it too.... (0)

Anonymous Coward | about 9 months ago | (#45675933)

Because one of the advantages of living in a civilized society is we can depend on the system to keep us protected (to a degree). Whether that is the bridge you drive on is structurally sound, the food you eat in that Subway is clean from bacteria, and the money you deposit in the bank won't disappear if the bank fails.

Whether he likes it or not, by engaging in the business he is in, he now falls into a regulated area. Tough shit. That's the cost of doing his business. And as a consumer, you should be grateful that such systems are in place and you can do all the things I listed above without any thought. If you don't like it, there are plenty of places in the world that do not have such protections. Either him or you are welcome to vote with your feet and pursue a different philosophy of consumer protection.

Re:You can't have your cake and eat it too.... (0)

Anonymous Coward | about 9 months ago | (#45676181)

the rules are to protect consumers and other participants

There are two people involved: the guy printing the token and the guy who wants the token printed. If neither of these people want to be protected, or they've taken other measures on their own, why should they be protected by a third party that neither of them wants involved? To me that sound a bit like a 'protection' racket.

Because the government is not protecting them, it's protecting society against gang activity by looking for money laundering.

Framing the transaction as only containing two people and the government as an uninvolved third party, is dishonest in the same way that farming a noise ordinance violating-ly loud argument between you and your roommate as a "private two party transaction" when your neighbor calls the cops and they come knocking on your door telling you to "keep it down".

Re: You can't have your cake and eat it too.... (0)

Anonymous Coward | about 9 months ago | (#45675883)

currency IS trust. people trust that the dollar bills in their pockets are worth the effort they expended to earn them. stable currency is trustworthy. currency is represented just paper and numbers in a computer. if civilization broke down tomorrow, all trust would vanish and all those Benjamin's wouldn't be worth squat. shotgun shells and tons of beans would be the new currency.

I hope this doesn't affect my plans (0)

Anonymous Coward | about 9 months ago | (#45675613)

I am planning on distributing US dollar currency in the form of toilet paper "tokens"

Regards,
- Ben Bernanke

Financial Crimes Enforcement Network? (5, Funny)

maxwell demon (590494) | about 9 months ago | (#45675623)

So if it is named "Financial Crimes Enforcement Network", then obviously its aim is to enforce financial crimes. So, not only does it not fight crime, nor does it simply ignore crime, it isn't even just promoting crime, no, it enforces crime! :-)

Re:Financial Crimes Enforcement Network? (0)

Anonymous Coward | about 9 months ago | (#45676265)

Two burly guys walk into an analogy.
Shopkeep says "How can I help you boys?"
They says in a thick Italian-American accent:
This is a lovely free economy you have here.... he knocks over some jars containing a bunch of ones and zeroes.... It would be a shame if something were to ... happen to it.

JEWS... (-1)

Anonymous Coward | about 9 months ago | (#45675643)

JEWS control the money creation in your country. That means that Jews create almost ALL of the money in existence. If you want to buy a house, the Jew creates money out of thin air when he loans you it. If you want to borrow money to start a business, exactly the same. Hence the JEW owns almost everything.

Don't believe me, do some research for yourself.

That is why Bitcoin frightens the 'government', because the 'government' doesn't work for you, it works for the JEW.

So... (1)

weilawei (897823) | about 9 months ago | (#45675659)

Couldn't he simply print the bitcoin given to him (no transaction, though it does require you trust him not to spend it) and take payment from another bitcoin transaction? That way, he isn't actually taking control of the BitCoin he's printing off (no transaction, no laundering) and his business is straight up printing?

Re:So... (0)

Anonymous Coward | about 9 months ago | (#45676061)

This is the part I don't get. Bitcoin ownership is not defined by a physical token but the electronic transaction records on the block chain, so where's the guarantee that these tokens have any value at all? I.e. how do I know the bitcoin wasn't transferred to someone else before/after printing the physical coin?

Another random federal agency (0, Flamebait)

Okian Warrior (537106) | about 9 months ago | (#45675705)

Another random federal agency has decided that they are the law-making body with authority over some aspect of our lives. Discretionary enforcement(*) allows them to pick-and-choose whoever they want.

The DHS regulates model rocketry [earthlink.net] , the DEA regulates chemistry sets [wordpress.com] , the ATF manages the second amendment [dailykos.com] , and so on and so on and so on.

Weren't we supposed to elect the lawmakers? I seem to recall a forum or meeting place of some sort where we could send people to make laws on our behalf.

Is this "regulation without representation"?

(*) This same federal agency doesn't suppress Starbucks cards, online gaming gold, or frequent flyer miles, all of which are just as much a currency.

Re:Another random federal agency (1)

Anonymous Coward | about 9 months ago | (#45675783)

FINCEN is not some random federal agency.

You not knowing of it only speaks to your ignorance and not the unimportance of the agency.

Re:Another random federal agency (1)

Okian Warrior (537106) | about 9 months ago | (#45675829)

FINCEN is not some random federal agency.

You not knowing of it only speaks to your ignorance and not the unimportance of the agency.

That's a fair point.

I need to learn more about these agencies. Can you give me a list of of the ones that have law-making authority over our lives?

Re:Another random federal agency (2)

mythosaz (572040) | about 9 months ago | (#45676057)

A crash course in Administrative Law for 'ya. Regulatory agencies have it, within their powers, to clarify laws with policy statements.

See: "Chevron"
http://en.wikipedia.org/wiki/Chevron_U.S.A.,_Inc._v._Natural_Resources_Defense_Council,_Inc [wikipedia.org] .

Here's a simple example: Here in Arizona we have a thing called, "Smoke Free Arizona," a voter-initiated law that makes smoking illegal in most occupied public places. That law says some fairly big things about where you can and can't smoke, but there were no fine details.

Enter the Arizona Department of Health Services. They said, "No smoking within 20 feet of a public building entrance." Nowhere in "the law" does it say that. ...but you'll still (at least on paper) get a fine for it. [You'll actually just get a snotty look, unless you're blowing smoke in a cop's face or something...] Why? Chevron.

As long as these administrative departments aren't completely smoking crack when they write their substantive policy statements, then their word is "law," and your next stop for rebuttal is with an administrative law judge -- not with a "real" judge and jury. So, uh, good luck.

If you don't like it - talk to SCOTUS, and let them know they should reconsider Chevron -- which will sort of suck, because every first year law student's history will need erased.

Re:Another random federal agency (0)

Anonymous Coward | about 9 months ago | (#45676169)

The list is short and simple smartass: ALL OF THEM.

Re:Another random federal agency (0)

Anonymous Coward | about 9 months ago | (#45676123)

Another random federal agency has decided that they are the law-making body with authority over some aspect of our lives. Discretionary enforcement(*) allows them to pick-and-choose whoever they want.

The banking and financial crime laws were passed by Congress, and they include registration and anti-money laundering compliance rules for money-transfer businesses. For FINCEN to believe they are have been instructed to regulate people whose businesses facilitate money transmission is therefore not particularly unexpected. The desperate attempts to make it seem like this is some kind of mad administrative over-reach by power-mad bureaucrats is just typical Reason grandstanding. If you don't like the law, it's Congress you should blame.

(*) This same federal agency doesn't suppress Starbucks cards, online gaming gold, or frequent flyer miles, all of which are just as much a currency.

Starbucks cards, online gaming gold and frequent flyer miles are not a currency or cash substitute as they can only be used with a select group of vendors for a limited range of items. While it might be possible to attempt to sell them for dollars (as you can attempt to sell any asset in the marketplace), they are not a general purpose store of value, and in fact when you are setting up these schemes one of the things your lawyers will do is make sure this is the case.

A better comparison would be informal money-transfer systems used by immigrants to send money home, such as 'Hawala' systems. Those often involve the agent producing a token that can later be exchanged by the customer's relatives in the home country for cash. And yes, FINCEN goes after these people all the time, often with prosecutions rather than cease & desists.

Feds, pick one or the other! (3, Insightful)

DaveAtFraud (460127) | about 9 months ago | (#45675757)

Choice one: BitCoins are a legitimate currency and are recognized as such by the U.S. government. What he's doing isn't illegal unless they are.

Choice two: Physical BitCoins are novelties sort of like the commemorative coins minted by Franklin Mint. What he's doing isn't illegal unless what Franklin Mint does is illegal.

You can't have it both ways.

Cheers,
Dave

Re:Feds, pick one or the other! (1)

camperdave (969942) | about 9 months ago | (#45675931)

Choice one: BitCoins are a legitimate currency and are recognized as such by the U.S. government. What he's doing isn't illegal unless they are.

If they are charging him, then they are admitting that BitCons are a legitimate currency. Bad for him, good for the rest of us?

Choice two: Physical BitCoins are novelties sort of like the commemorative coins minted by Franklin Mint. What he's doing isn't illegal unless what Franklin Mint does is illegal.

The Franklin mint may have already gone through all the necessary legal loopholes, since it was a functional mint at one point.

Re:Feds, pick one or the other! (0)

Anonymous Coward | about 9 months ago | (#45675989)

What he is doing isn't illegal, nor has any claim been made that it is. Merely that as he is exchanging money he must keep financial records of the transaction as per the regulations, just like any other financial institution such as the franklin mint.

Re:Feds, pick one or the other! (1)

avandesande (143899) | about 9 months ago | (#45676067)

Might want to find out what these folks are doing- they will take your scrap and send you coins. I bet you they keep records....

http://www.midwestrefineries.com/ [midwestrefineries.com]

A bunch of fagot ass bankers (-1)

Anonymous Coward | about 9 months ago | (#45675807)

are mad because their 6000 year old hold on the world and it's control are about to come tumbling down in the next 10 years or so.

that's what that angry letter basically translates to.

Fiatleak down. (0)

Anonymous Coward | about 9 months ago | (#45675851)

fiatleak.com not working this afternoon!
      Domain Name: FIATLEAK.COM
      Registrar: ENOM, INC.
      Whois Server: whois.enom.com
      Referral URL: http://www.enom.com
      Name Server: DNS1.REGISTRAR-SERVERS.COM
      Name Server: DNS2.REGISTRAR-SERVERS.COM
      Name Server: DNS3.REGISTRAR-SERVERS.COM
      Name Server: DNS4.REGISTRAR-SERVERS.COM
      Name Server: DNS5.REGISTRAR-SERVERS.COM
      Status: clientTransferProhibited
      Updated Date: 09-nov-2013
      Creation Date: 09-nov-2013
      Expiration Date: 09-nov-2014

Dear Slashdot (-1)

Anonymous Coward | about 9 months ago | (#45675867)

Could you please refrain from airing every tidbit about $hitcoin. I incite your attention to the Lehman Brothers collapse in 2008. It was a flame that was only fanned as a result of people jumping on the bandwagon to get in on the mortgage instruments and other derivatives ponzi schemes. The bitcoin It's something that benefits the few and you are not going to solve all your problems from your basement. Good day.

Clueless spooks (0)

Anonymous Coward | about 9 months ago | (#45675969)

If you email me your secret code, I will engrave your secret code onto a piece of metal and delete the email. Then I will physically mail your code-bearing metal to you and I also promise that I will forget it and not keep a record of it. I will provide this service for $50.

This is exactly what the clueless spooks consider to be "money transmitting".

The truth is, bitcoins do not physically exist at all. You could transmit the key to a wallet containing 1 bitcoin to 1 million people, but you have not transmitted 1 million bitcoins. The only time bitcoins are ever actually "transmitted" is in transactions recorded in the block chain, because that is the only place bitcoins "exist"

He should change his model (1)

avandesande (143899) | about 9 months ago | (#45675973)

Accept credit cards, use the money to buy bitcoin and send people their coin... doesn't have the free market appeal like what he was doing but would get people the product they want.

Re:He should change his model (1)

gatfirls (1315141) | about 9 months ago | (#45676105)

Trying to sidestep the feds when it comes to possible financial crimes is never a good idea. If they tell you to knock something off be glad that's all it was and move on.

Anyone can launder bitcoin. (0)

Anonymous Coward | about 9 months ago | (#45675977)

You could just as easily print the the key as a qr code and put it in a tampber evident envelope

not money (0)

Anonymous Coward | about 9 months ago | (#45676091)

funny, I thought that bitcoins weren't considered to be money by the federal government. Only a government can create money, private institutions create coupons. So, he is really making wallets that hold coupons that certain people use as money. Much as I could make a binder that holds garbage pale kids that certain people use as money...

anything could be used for money laundering if all parties involved agree that it holds true as a metric of value.

Just before thanksgiving! (0)

Anonymous Coward | about 9 months ago | (#45676137)

There's hardly a time of the year you can pick that won't be a bad time. Except maybe right before tax day.

Every month has holidays, memorials, observances.

liberty dollar (1)

Anonymous Coward | about 9 months ago | (#45676219)

look them up. they tried it with gold and the fed s stole their gold.

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