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Bitcoin To Be Regulated Under US Money Laundering Laws

Posted by Soulskill on from the government-smells-funding dept.

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."

14 of 439 comments (clear)

  1. They don't get it by lalena · · Score: 5, Insightful

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

    1. Re:They don't get it by Anonymous Coward · · Score: 5, Insightful

      They regulate entities that exchange bitcoins for dollars.

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

    2. Re:They don't get it by cayenne8 · · Score: 5, Insightful
      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?

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    3. Re:They don't get it by interkin3tic · · Score: 5, Insightful

      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.

    4. Re:They don't get it by Anonymous Coward · · Score: 5, Funny

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

      Finally someone gets it, and explains why the EU is failing. All those people earning and spending euros, never converting them to dollars, wasting their time, getting nothing out of it. Don't they understand? If they don't convert to dollars, they're useless. Fortunately for the euro, they can convert to dollars, but so few europeans take advantage of this to validate to the euro. Thus, it never gains legitimacy.

    5. Re:They don't get it by Anonymous Coward · · Score: 5, Informative

      Yes, BitPay are converting buttcoin to USD and will be the ones regulated. Shouldn't be too big a deal; presumably they already have customers' addresses so they can ship stuff to them.

    6. Re:They don't get it by serviscope_minor · · Score: 5, Funny

      The Euro is another currency that millions of people accept and pay taxes with

      Except the Greeks!

      --
      SJW n. One who posts facts.
    7. Re:They don't get it by Ghostworks · · Score: 5, Informative

      First, a small point: the laws apply to ALL transactions. The laws for MANDATORY reporting are at $10,000. If a financial institution suspects something weird -- which can mean a $9,999 transaction, 100 transactions of $100 each, a $5000 transaction where a teller noticed the customer also has another $5,000 in cash that he's not doing anything with yet, or a transaction where a customer said, "oh, wait, let me take that cash back and deposit a little less so I am below the $10,000 mandatory reporting limit" -- then they can, should, and probably will still file a report. This applies at banks, airports*, and numerous other places.

      * Side note: ever wonder why you can't travel with more than $10,000 cash? Well, you can. Ever wonder why some people act like you can't? Because it means paperwork. It's perfectly legal to walk through an airport with $10,000 and say, "I'm going to Las Vegas to bet the farm." It just means at some point customs, your bank, and the casino cashier will have forms to sign saying they saw $10,000. Unless you actually are driving to the Nevada desert for a drug deal, it's really no skin off your back.

      Second, I'm going to make this an, "I told you so," to posters on previous threads who seemed to believe that U.S. money laundering laws only applied to U.S. currency. It's most easily enforced at large, brick and mortar companies actually doling out greenbacks, but it's applicable always and everywhere something is a currency. If enough people were in a mood to transfer all of their cash in to WoW gold pieces, it would apply. It applies equally to Americans and in American jurisdictions to: U.S. dollars, mostly-defunct financial instruments like Bank promissory notes, to proxies like casino chips (and WoW gp), and non-federal currencies like Ithaca Hours, Chinese Yuan, and BitCoins.

      Third, on a larger scale, let this be a reminder that there is no "cyberspace". The internet is not something apart from the rest of the world. The internet is just something the whole world is "doing" right now. There is no cybercrime, just crime. There is no cyberlaw, only law. The internet is not regulated differently than any other aspect of our lives, except that special provisions are necessary to disambiguate jurisdiction and to enable law enforcement to cope with the realities of the situation, much in the way "wire fraud" was created as a federal crime to allow enforcement agencies to cope with the jurisdictional questions of a crime committed in one state by a perpetrator in another. The internet is not special. All laws still apply.

  2. This is meant to kill Silkroad by Xemu · · Score: 5, Interesting

    They will use this law to strike against Silk Road.

    Remember, Capone was convicted on federal charges of tax evasion.

    --
    Tell your friends about xenu.net
  3. Pot...kettle... by ProZachar · · Score: 5, Insightful

    "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.

  4. Bit coin is growing up! by Mabhatter · · Score: 5, Insightful

    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?

  5. Inline stock quote by necro81 · · Score: 5, Insightful

    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.

  6. Money monopoly = wealth transfer by moeinvt · · Score: 5, Insightful

    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

  7. Your solution to the Scrabble Problem of the day by Sloppy · · Score: 5, Funny

    Problem: Someone just placed a W tile. You have these tiles available to play: H, O, O, S and H.

    Your proposed solution: spell the word "HOHOWS".

    Analysis: That's not a real word.

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    As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.