Bitcoin To Be Regulated Under US Money Laundering Laws

Newsubmitter davek writes with news that the U.S. will be applying money-laundering laws to Bitcoin and other 'virtual currencies.' "The move means that firms that issue or exchange the increasingly popular online cash will now be regulated in a similar manner as traditional money-order providers such as Western Union Co. WU +0.17% They would have new bookkeeping requirements and mandatory reporting for transactions of more than $10,000. Moreover, firms that receive legal tender in exchange for online currencies or anyone conducting a transaction on someone else's behalf would be subject to new scrutiny, said proponents of Internet currencies. 'I think it's inevitable that just like you have U.S. dollars used by thieves and criminals, it's sadly inevitable you will have criminals use a virtual currency. We want to work with authorities,' said Jeff Garzik, a Bitcoin developer. Still, law enforcement, regulators and financial institution have expressed worries about the hard-to-trace attributes of virtual currencies, helping trigger this week's move from the Treasury's Financial Crimes Enforcement Network, or FinCen."

Comments

They don't get it

[lalena]

Bit Coin works even if there are no "firms" to issue or exchange. Therefore, there is no one to regulate.

Re:They don't get it

[Anonymous Coward]

They regulate entities that exchange bitcoins for dollars.

If the average user can't exchange bitcoins for dollars, what good is it?

Re:They don't get it

[jandrese]

The regulation is clearly going to happen at MtGox or any other place that exchanges bitcoins for USD. Once you are sending $10,000 USD to someone, the money laundering provisions apply. This should work for as long as businesses don't accept bitcoins directly, which is still mostly the case. There are a small number of businesses that will deal directly in bitcoins, but not enough that you could spend $10,000 on them reasonably yet.

Re:They don't get it

[cayenne8]

But why SHOULD it be regulated?

For that matter, WTF should the US govt be notified if I do any transaction over $10K in cash, bitcoins or barter??

How did we let it become the govts business what we do with our money?

Re:They don't get it

[interkin3tic]

I suspect you are the one who doesn't get it. Government makes demands. If those demands aren't met, aren't countered through an internal process (like voting the pols who made those demands out), or if those demands aren't bluffs, there's an escalation. Eventually, force will be used.

There are people to regulate. The government will identify them if the politicians, lobbyists, and special interests are determined enough. I'm not sure if they are. How many transactions over $10,000 in value are being done with bitcoins (the minimum for these rules applying)? I didn't read TFA too closely, but I couldn't see any estimates.

Many slashdotters may disagree that the government isn't serious about stopping bitcoin use, but hear me out. Banks and law enforcement may have made statements "worrying" about it, but that doesn't mean they see it as a real threat due to how few people use bitcoins. Bitcoin proponents love to think that what they're doing will be a revolution, but bitcoins seem to be losing ground (if they had any to begin with.) I can't imagine banks or law enforcement spending much capital on a problem that is solving itself. The "I want taxes" bureaucrats aren't likely to pursue it either for the same reasons. They don't, after all, usually audit teenage babysitters for tax evasion. And I'd wager babysitting is a more lucrative economy than anything happening on bitcoin.

Anyway, the target here probably isn't bitcoins, it's probably the other alternative currency mentioned in the article: corporations with virtual currency. Amazon coins. There's obviously someone to regulate there.

Forget about bitcoins. They're not the story here despite the headline. Amazon or various other entities attempting to avoid sales taxes IS.

Re:They don't get it

[SerpentMage]

They will comply because if they don't it means that they can never have a US account, ask for US dollars, trade US equities, etc, etc, etc... If you are willing to 100% forgo every and any tie to the US, go for it! The US is even for us foreigners a part of our daily lives, directly or indirectly.

Re:They don't get it

[cayenne8]

so go make your own society, where such controls don't exist

and after you get ripped off, by... get this... criminals... learn your lesson the hard way

criminality exists in this world. i'm sorry this bothers you, and i'm sorry in your naive rage you blame those who pursue criminality rather than criminality itself

Like another poster said, what about "innocent until proven guilty"?

I mean, if you're in the US, that's the way it is supposed to be.

If you suspect wrongdoing, then get a warrant, investigate....what's wrong with that?

Re:They don't get it

[Anonymous Coward]

But... you can have no connection to the U.S, but If you start selling your oil in bitcoin your country will get invaded.

Pot...kettle...

[ProZachar]

"I think it's inevitable that just like you have U.S. dollars used by thieves and criminals..."

Unfortunately, the worst thieves and criminals (the government and the banks that have bought the government) will be the ones doing the regulating.

Translation: Here Comes Big Brother

[Uberbah]

Same as when banks started having to report transactions of a few thousand dollars to the feds, because it could be "money laundering". If it's not the mob, it's terrahrists or pedos.

Same shit from both parties, different day.

Bit coin is growing up!

[Mabhatter]

Yea! Bitcoin is growing up! That means enough people are using it that the government is noticing. And of course the first thing the government does to show its appreciation is to start regulating it. Did they at least get a "Baby's first regulation" card?

Inline stock quote

[necro81]

The move means that firms that issue or exchange the increasingly popular online cash will now be regulated in a similar manner as traditional money-order providers such as Western Union Co. WU +0.17%

Sigh. Inline, updating stock quotes in business and finance articles are annoying enough in their own context. When taken out of that context by a lazy and sloppy copy-paste, as had happened with this article summary, is just plain disappointing. Does nobody bother to copy-edit these things before they go live? I thought this was /., not reddit.

Money monopoly = wealth transfer

[moeinvt]

Money laundering? BS. If they cared about money laundering then they'd go after the bankers who are laundering millions of dollars in drug money for the cartels.

What this is really about is a banker-government that will do anything and everything possible to prevent alternatives to their fiat + fractional reserve monopoly on money. These parasites absolutely can't have us serfs using a money supply which they can't control and manipulate in order to enrich themselves at the expense of everyone else.

"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Re:Money Laundering is a Non-Crime

[DerekLyons]

The problem with all this is that "money laundering" generally comes from activities which are victimless crimes, and are therefore not a crime because they don't affect anyone but the person doing them.

Yeah - that money from a protection racket or from running a prostitution ring or from embezzling... no victims there. Or to put it another way, if you think ill-gotten gains only come from money that appears from thin air, you're either *very* innocent about how the world works or utterly and completely clueless.

Re:Money Laundering is a Non-Crime

[dkleinsc]

Drugs besides alcohol and prescribed pills are illegal because they circumvent a distribution apparatus.

That's not the reason why drugs are illegal. Harry Anslinger, who led the effort to outlaw pot in the 1930's, explained his motivations:
"There are 100,000 total marijuana smokers in the US, and most are Negroes, Hispanics, Filipinos, and entertainers. Their Satanic music, jazz, and swing, result from marijuana use. This marijuana causes white women to seek sexual relations with Negroes, entertainers, and any others."

That why the drugs favored by white people back in the day (tobacco and alcohol) are legal, but the drugs favored by non-white people at the same time (marijuana, opiates) are illegal.

The next major round of prohibitions was very explicitly because Richard Nixon wanted an excuse to lock up the hippies, who he saw as a threat to America.