
A Bitcoin service suspended by state of Virginia - fianchetto
https://bitcointalk.org/index.php?topic=224057.0
======
downandout
Governments are terrified of Bitcoin and are trying to destroy the value by
eliminating providers of liquidity. No buyers, no value. As to some of the
comments stating that they have not been "suspended by the state" - that is a
disingenuous argument that only a lawyer could love. The state sent them a
letter accusing them of violating laws that carry the organizational
equivalent of the death penalty, and possible jail time for the founders. It
was intended to threaten and intimidate them into suspending operations, and
it worked.

~~~
mikeash
Alternative interpretation: governments couldn't give a rat's ass about
Bitcoin, but care deeply about financial institutions (at least, those too
small to purchase legislators) actually following the rules.

This company is transmitting money, Virginia requires companies that transmit
money to be licensed, this company is not licensed, seems pretty
straightforward to me.

One can argue about the merits of the regulation in question, but since
regulations like this long predate Bitcoin, it's clearly not any sort of
reaction to Bitcoin or any other virtual currency.

~~~
downandout
Wrong. This company does not sell Bitcoins - they buy them (the state's
"initial investigation" - which likely consisted of reading a complaint filed
anonymously by a competitor - had this entirely wrong). They are only
"transmitting money" in the same way that people who buy things from Amazon or
eBay are when they buy products. By your definition, I guess I need to become
a licensed MSB next time I buy a replacement power supply on eBay.

~~~
mikeash
If I buy Euros, am I not transmitting money? There's a difference between
Bitcoin and power supplies, namely that the former is _money_ and the latter
is not. The law applies to currency.

Bitcoin advocates can't seem to make up their mind as to whether Bitcoin
actually qualifies as "money". It's money right up to the point where the law
starts talking about "money", then magically it's just some arbitrary good
that's not actually a currency at all.

~~~
oleganza
Law may say what it wants. The reality is people trade things for things. Some
other people define certain things as special and force you to comply based on
their definitions. No one outside the legislative structures gives a rat's ass
about those definitions. When you and me trade something for something, we
don't care about someone's definitions, we only care about the value that we
get in result. And your friends also don't care. Only people who have power to
force you to comply use that power to play with words and mess with your mind.

~~~
mikeash
That's a fantasy. Here in reality, if you're operating a commercial
enterprise, the way you operate depends greatly on what kind of item you sell.
For example:

1\. Hard liquor not for consumption on site: illegal to sell in Virginia, only
the state can.

2\. Firearms: highly regulated.

3\. Food: must meet health department regulations.

4\. Computer parts: fairly open, must still meet basic business licensing
requirements, collect sales tax, etc.

You can talk about how things _ought to be_ all you want, but all that matters
here is how things _are_ , and how things _are_ appears to be that this
Bitcoin operation falls under a certain category of law with which they are
not compliant. The law is not written with Bitcoin in mind at all, so
conspiracy theories about governments specifically targeting Bitcoin do not
appear to have any basis.

~~~
oleganza
I agree there's no conspiracy against Bitcoin. I agree that in the view of
particular people Bitcoin is money and they want it to be regulated according
to their agenda.

What I don't agree is when people use made up definitions with straight face
within a rational argument. It's not that you are wrong, it's that arguments
like yours implicitly justify certain things as objective (e.g. differences
between money and not-money).

In other words, Bitcoin services are being regulated not because Bitcoin is
(or not) money, but because there are _people with guns_ who want to control
certain things in certain ways and use _made-up definitions to justify their
actions_. When you use their definitions you just add up to global confusion
and hide their lies.

And I'm not saying how things _ought to be_ , I'm not suggesting what's good
or bad. I'm saying that without honest clear terms we cannot easily decide for
ourselves what's good or bad. Maybe it's good for someone to be controlled by
people with guns. I just want to point out that there are guns and many people
are afraid of them.

~~~
mikeash
Bitcoin is clearly money. The people who made it consider it to be, the people
who use it consider it to be, and the people who want to regulate it consider
it to be. This is no more made up than any other human terminology.

------
slg
This is a pretty bad headline. First off, there should be a article in there,
like "A Bitcoin service". Secondly, the service appears to have been shutdown
to protect the owners/operators of the site from further legal action. They
are not being forced to close. The state thinks they need a license and they
think they don't. Instead of risking jail time on the possibility they don't
need a license, they are taking the cautious route and shutting down until the
legal issues are resolved.

~~~
oleganza
"They are not being forced to close."

"Instead of risking jail time (...)"

I see some contradiction in here. If you feel a threat of violence upon you,
isn't it very definition of "being forced"?

~~~
slg
The operators of the site believe that they are in the right. If they were
100% confident of this they could continue to operate. They are not 100%
confident so they are shutting down to make sure what they are doing isn't
illegal. They are not being threatened with violence by the state anymore than
any other law abiding citizen. They have simply been informed that what they
are doing _may_ be illegal and are adjusting accordingly.

~~~
oleganza
The fact that all citizens are afraid of state violence does not mean we can
redefine word "voluntarism". You abide the law _non-voluntarily_. You abide
terms of service in McDonalds voluntarily because you can always choose from
millions of alternatives + you can have a peaceful dialog in case of a
dispute. Neither McDonalds manager, nor you are willing to fight each other on
fists or in court. It's in your mutual interests to figure out problems
through discussion.

You don't discuss with the state. You can have your input, but you are totally
dependent on existing powers that _allow_ you some freedom and some voice.
That's why you have no problem arguing with private companies and having them
listen to you, but everyone avoids state courts as much as possible (in
majority of cases courts are used as a threat, not as a real dispute
resolution mechanism).

------
Groxx
> _Effective the May 31st, 2013 Tangible Cryptography has suspended new
> purchases of Bitcoins through our service FastCash4Bitcoins. We take this
> step in response to a notice received, the same day from the Commonwealth of
> Virginia, that a complaint has been made that our company is operating as an
> unlicensed money transmitter._

Note that they're basically acting as the middle-man, not storing anything -
I'm not really sure how the terms work in this situation. They seem to think
it doesn't apply, maybe they're right.

It sounds like they did this _voluntarily_ , and they go on to explain there
have been no freezes, and all transactions have been completed. Probably a
good choice (IANAL of course) while they mount a defense, which it sounds like
they plan to do.

~~~
fianchetto
> It sounds like they did this voluntarily

No, they were forced by the state.

------
pyre
It sounds like they are voluntarily suspending service until this is sorted
out. Virginia has given them 30 days to explain why they think this doesn't
apply to them.

~~~
oleganza
"Voluntarily"? They feel the risk of their property being seized and owners
brought to court.

It would be "voluntarily" if their _customers_ did not like their affairs and
they risked losing customers. And customers are never going to put a gun to
your head. They just go away.

~~~
pyre

      | They feel the risk of their property being
      | seized and owners brought to court.
    

It sounds more like they are already at risk of this. Voluntarily suspending
operation until things are sorted out, is more of a show of good faith that
they are willing to play ball and sort things out.

~~~
fianchetto
> Voluntarily suspending operation

Something is voluntary only if there's no threat of force behind it.

Voluntary: acting or done without compulsion or obligation.

<http://dictionary.reference.com/browse/voluntary>

------
smkiv
Assuming that OP was simply buying bitcoin (and nothing else...i.e. not
automatically selling on an exchange on the backend or something...), then
this could be a big shot to Bitcoin.

Unlike other recent headlines (around i.e. Mt. Gox, etc.), it seems like the
question here is whether or not bitcoin constitutes "stored value" under VA
law[1]. If so, this would render anyone who buys and sells bitcoin a Money
Transmitter Business.

That said, I doubt FinCEN would consider Bitcoin "stored value" based on their
definition [2] and recent "guidelines".

Stored value laws were created for things like prepaid cards (I
believe...[3]), which were cracked down on because of their role in money
laundering.

[1] <http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+6.2-1900> [2]
[http://www.fincen.gov/financial_institutions/msb/definitions...](http://www.fincen.gov/financial_institutions/msb/definitions/stored_value.html)
[3]
[http://www.gpo.gov/fdsys/pkg/FR-2011-07-29/pdf/2011-19116.pd...](http://www.gpo.gov/fdsys/pkg/FR-2011-07-29/pdf/2011-19116.pdf)

------
officialjunk
one unlicensed money transmitter is being suspended, not all bitcoin services
and not the entire state of VA.

~~~
darkarmani
The state of VA is making the argument that bitcoin services are money
transmitters, so it seems like they'll go after everyone in the state.

~~~
danielweber
Services that change money into bitcoins, or vice versa.

If you accept bitcoins for your dog-walking service, there doesn't seem to be
any new regulation.

------
e3pi
Say a Craigslist service exclusively for bitcoin. Would the glorious state of
Virginia have a problem with this?

An eBay auction exclusively for btc? Where service wets beak with $$ only, or
also/with btc micro payments? A problem?

~~~
Uchikoma
An eBay auction exclusively for EUR? Yes.

------
MWil
I just really liked this quote in the comments because it made me chuckle -

"You don't get into positions of power of life and death over proles by being
ignorant, only acting as if you are, which is genius-level sociopathy. If you
REALLY try it sometime, you may just become the President of the United
States, and have the power to slaughter babies in the Rose Garden in front of
the world's press, and not suffer any real punishment whatsoever."

------
vsviridov
Welcome to Canada, where bitcoin exchanges are not subject to FinTrac Money
Transmitters regulations. Yet...

------
Uchikoma
Bitcoin supporters on HN:

One thread: Bitcoin is the future of money

Other thread: Bitcoin is not money, so why apply money rules?

It either is or isn't.

~~~
dragonwriter
You see the same thing a lot with disruptive startups -- where they are hailed
as the radical new future of a particular industry _and_ it is argued that
they should not be compelled to obey the regulations of the industry they seek
to enter and disrupt (and, often, a substantial part of their operations rely
on them being allowed to ignore those regulations or having the regulations
rewritten to support them.) See, e.g., Airbnb and its issues with many cities
regulations of short-term renting.

~~~
Uchikoma
Exactly. AirBnB and Uber (Stockholm) come to mind too.

------
meerita
How they can ban bitcoin use in an state?

