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Maker of Physical Bitcoin Tokens Suspends Operation After Hearing from Federal G

Austrian Anarchy (3010653) writes | about 4 months ago

2

Austrian Anarchy (3010653) writes "Via Reason and Wired: 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's charge you $50 worth of bitcoin to print a key of a bitcoin 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."

2 comments

So... (1)

Clyde Machine (1851570) | about 4 months ago | (#45673257)

...What makes this different from selling someone your Bitcoins for US dollars (i.e. localbitcoins.com) in the first place? Should I be given a love letter from FINCEN for selling Bitcoins to someone directly? Is it just because he identified his activities as part of a business? In that case, how many transactions would it take for me to be considered a business, to FINCEN? Also, a more neutral stance on summaries would be nice in the future.

Re:So... (1)

Austrian Anarchy (3010653) | about 4 months ago | (#45674375)

...What makes this different from selling someone your Bitcoins for US dollars (i.e. localbitcoins.com) in the first place? Should I be given a love letter from FINCEN for selling Bitcoins to someone directly? Is it just because he identified his activities as part of a business? In that case, how many transactions would it take for me to be considered a business, to FINCEN? Also, a more neutral stance on summaries would be nice in the future.

Nothing makes it any different really. The story indicates that the government made hay about how you can give the physical coin with the ID number on it to someone without knowing who they are. Apparently this is different to them than emailing Bitcoin to Rumpelstiltskin@###.xyz without knowing who they are either. Or maybe it is not and they frown on that too.

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