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Bitcoin Token Maker Suspends Operation After Hearing From Federal Gov't
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.'"
the government is still just trying to maintain control. bitcoins going physical would be huge.
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.
....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.
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
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.
A feeling of having made the same mistake before: Deja Foobar
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?
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! :-)
The Tao of math: The numbers you can count are not the real numbers.
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.
because stock isn't money...
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
They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.
Ben
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.
http://lkml.org/lkml/2005/8/20/95
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.
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.
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.
After much public outrage and senate hearings, the justice department settled on a $1.92 billion penalty (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?
OMG! The horror of it! People transferring money! What is the world coming to!
Perhaps we should be rethinking this; it seems to have gone too far.
I have stock certificates, laminated and framed, from a former start-up. They do exist, and in general your broker can send some to you if for some crazy reason you want them.
And "money laundering" laws should have a floor. Sure, make the business track if a given customer does more than $10,000 in business in a month and report that - that's fine at that scale - but how is this different from, say, restaurant gift cards?
Socialism: a lie told by totalitarians and believed by fools.
He's "transmitting" money by accepting $11 and returning a $10 bill in a frame? Then all the penny-squishing novelty machines in amusement parks are really just laundering machines.
Learn to love Alaska
Money is certainly "political expression" when used to pay for political expression. You seem to think that's foolish, but fail to provide an alternative for consideration. Should political newspaper ads be outlawed, such that only those who can buy an entire newspaper company have freedom of the press? Where do you draw the line, without outright censorship of some means of political expression?
Socialism: a lie told by totalitarians and believed by fools.
Bitcoin, until now, is still an UNREGISTERED and totally UNRECOGNIZED entity, according to the laws of the United States of America (since it's the US treasury we are talking, let's limit the discussion to the US laws).
Stocks, on the other hand, are items that are recognized under the United States' laws, and the issuance of stock, the printing of stock certs, and so forth, have to abide by the LAWS, as they were written when the certs were being printed.
In other words, the authority actually has NO JURISDICTION WHATSOEVER to interfere with the activities of that maker of Bitcoin Token since what he did was akin to making some toy coins, use for arcade machines.
It's true that he has less lawyers than the stock cert printers, but still, the authority just does not have ANY RIGHT to interfere with an LAWFUL ACTIVITY (making toy coin) of a LAWFUL COMPANY (which is dully registered according to the laws where the company is located).
The United States of America of today is becoming more and more like the China that I ran away from, back in the early 1970's.
Back when I first reached the U. S. of A., it was a country in which the LAWS were still obeyed.
Back when I ran away from China, it was a country where LAWS WERE MEANINGLESS.
Now it looks like the United States of America is trying very hard to change role with that of China.
While China is getting more and more civilized (they still have a VERY LONG WAY TO GO), America is behaving more and more rogue.
It saddens me a lot watching my adopted country slowly turns into the country where I was born.
Muchas Gracias, Señor Edward Snowden !
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.
No, spending money is speech. Coining money is covered in Article I of the Constitution. That said, people should be free to exchange in whatever they mutually define as money and save that dirty federal coined variety for the tax man.
Time Bomber the Book coming soon.
No, spending money is speech. Coining money is covered in Article I of the Constitution. That said, people should be free to exchange in whatever they mutually define as money and save that dirty federal coined variety for the tax man.
Time Bomber the Book coming soon.
The Department of Justice and Securities and Exchange Commission are telling a U.S. Senate committee that Bitcoins are legitimate financial instruments, boosting prospects for wider acceptance of the virtual currency.
Representatives from the agencies told the U.S. Senate Committee on Homeland Security and Governmental Affairs ahead of a hearing Monday that the digital money offers benefits and carries risks, like any other online-payment system, according to letters they released before the meeting.
That was just last month and that is the problem.
No, it's NOT a problem.
Everything boils down to the LAWS.
Do the LAWS of the United States of America recognize the entity by the name of "BITCOIN" ?
Yes or No ?
Whatever department of the government can "endorse" anything they like, but if the *LAWS* do not recognize that very thing, the "endorsement" amounts to nothing.
What the GP has stated was correct. They have absolutely NO jurisdiction over the coin maker.
And I am reading some asshats' post below saying about "minting coins with other people's money", I mean, WTF is that?
Someone can write an IOU on a piece of paper and that IOU may mean "MONEY" to someone.
Just because someone making a wallet with an embedded IOU does not mean that that guy is trespassing the laws.
Do they even understand the basic concept of LAWS to begin with ??
Because we, as a civilized society, look down on things like human trafficking, organized crime, extortion and so on. These activities require the ability to transact large amounts of value in untraceable ways, and so to the best of their ability the government try to prevent that.
This isn't about stopping this guy from doing what he was doing, it was about making him follow the same rules that everyone else who does similar things follow, which is more about keeping records than anything else. If he doesn't want to follow the rules, then fine, he can stop doing the business. His call - but no one MADE him stop.
It's amazing to me to hear the constant screams about Wall St "criminals" who need to be regulated even more than they already are, but heaven forbid the bitcoin freedom fighters get caught up in some of that regulation! The hypocrisy is truly breathtaking.
---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"