
EFF and Bitcoin - apievangelist
https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin
======
pash
"Bitcoin raises untested legal concerns related to securities law, the Stamp
Payments Act, tax evasion, consumer protection and money laundering, among
others."

No it doesn't. Accepting donations in Bitcoins is no different than accepting
cash yen or euro or Zimbabwean dollars. You value them at the market's dollar
rate for tax purposes. The other objections are thorough nonsense as far as I
can tell.

"We don't want to mislead our donors."

You just did. You took their Bitcoins and did something with them wholly
different from what you said you were going to with them. (The EFF says it
donated them to the Bitcoin Faucet.) The honest thing, and what your donors
expected, would have been to convert them to dollars (or whatever) and spend
them as you would any other donation, or to purchase goods and services from
the Bitcoin economy to promote your mission.

"People were misconstruing our acceptance of Bitcoins as an endorsement of
Bitcoin."

You were endorsing Bitcoin by using it. Just say, "Bitcoin's the Wild West.
We're scared to take them." And leave it at that.

~~~
martincmartin
_"Bitcoin raises untested legal concerns related to securities law, the Stamp
Payments Act, tax evasion, consumer protection and money laundering, among
others."

No it doesn't. Accepting donations in Bitcoins is no different than accepting
cash yen or euro or Zimbabwean dollars. You value them at the market's dollar
rate for tax purposes. The other objections are thorough nonsense as far as I
can tell._

The EFF is full of lawyers who, presumably, have studies these parts of law at
least a little, even if none of them have specialized in it. What's your
justification for calling their concerns "thorough nonsense"?

~~~
pash
>What's your justification for calling their concerns "thorough nonsense"?

1) Currencies are not securities, and this is plain in definitions of the
Securities Act of 1933 and following;

2) The Stamp Payments Act was enacted at the end of the wildcat banking period
to end the circulation of small-denomination (less than one dollar) money by
bank issuers. It clearly relates to dollar-denominated coins and notes.
Bitcoin is a separate currency and has no physical form and no fixed
denominations; regardless, the law applies no more to the use of Bitcoin than
to the use of any other currency in the United States, which is not
controversial.

3) I already explained the tax situation;

4) How is 'consumer protection' a legal issue related to the currency of
denomination of a charitable donation?

5) Bitcoin could certainly abet money laundering, but the anti-money-
laundering laws of the United States, in addition to regulating the conduct of
financial institutions, apply almost exclusively to those who knowingly engage
or intend to engage in transactions involving the proceeds of illegal
activity.

Bitcoin raises a couple of interesting questions related to its fundamental
electronic form, but the objections given are just nonsense.

------
rick888
"People were misconstruing our acceptance of Bitcoins as an endorsement of
Bitcoin"

They may not think so, but buy accepting it, they are endorsing it.

~~~
thebooktocome
A couple months ago someone posted the story of a coffeeshop that takes many
foreign currencies as a gimmick, to cover over the fact that they don't take
credit cards.

Do you think they're endorsing the Chinese yuan?

There's a difference between passively making a payment technique available
and actively promoting it to people. By conflating the two, you're opening
yourself up to all sorts of ridiculous claims, like the one above.

~~~
tedunangst
Absolutely, they are endorsing the Chinese yuan by acknowledging it's a
legitimate currency. Why do you think countries make such a big deal about who
has embassies with whom?

If you accept a currency, you are implicitly saying "I agree that this thing
you have given me has value."

~~~
a3_nm
This makes sense for a material currency, where you wouldn't want to be
burdened with useless paper rectangles or metal coins. (Same thing for an
embassy, by the way, which has a non-zero cost.) But for donations with a
digital currency, I think it was reasonable to hope that they could just
publish a Bitcoin address just in case without endorsing it for real, because
the cost to receive Bitcoin is essentially zero. (Keep in mind that you don't
even need to run the software anymore, you just need to keep a copy of the
private key somewhere.)

This being said, the EFF's choice is cautious, but sensible. (It's just
slightly annoying to see Bitcoin labeled as a "product or service", whereas
it's supposed to be a protocol.)

~~~
tedunangst
The overhead of keeping BTC is probably low, but what happens if they lose
that private key? How many people have access to it, what's the protocol for
using it, ....? I know if someone sent me some BTC there's a good chance
they'd be lost to the world forever.

And then people will throw a hissy if you aren't "using" their donation. Maybe
their choice of the faucet can be viewed in a different light. They are using
the donations to promote and ensure a bright future for bitcoin by spreading
the wealth. :)

------
gst
"[1] We understand that we cannot close the account that has been set up in
EFF’s name and that returning the donations to the individual donors would be
complex and difficult."

Returning the Bitcoins would neither be complex nor difficult. For every
transaction you know the sender address and the recipient address. So just
return the money to the sender address: as long as the sender didn't remove
his old wallet file this address will be valid.

(The only case where you can't return money to the sender address is if some
type of virtual "bank" like MyBitCoin was used. In that case sender address do
not correspond to the addresses of the individual users. However, the large
majority of users doesn't use those banks, but runs their own clients.)

~~~
Tichy
Not sure if that is correct. At least the BitCoin client does not show sender
addresses, only "you have received x BTC with this address". That is why you
ideally give each sender their own address to send to, so that you can track
who paid you.

Not sure how the internal cryptography works, but I think if the information
was available, the client would show it.

~~~
rmc
<http://blockexplorer.com/> will show you. The bitcoin client probably doesn't
show it because it would be very long winded and complicated.

------
JacobIrwin
We are looking forward to taking all of the risks laid out in your opinionated
statement. Movements/Startups like Bitcoin are the reason Guy Kawasaki uses
the half-mimicking quote: "paradigm shifting," in all of his presentations.
And Bitcoin is justified, because they are way beyond the elevator pitch.

------
Tichy
I don't get it, and sorry for the BTC story haters, but it is interesting to
me. Not only because of BitCoin, but because of general considerations about
payment startups.

When is something an alternative currency? Would it be illegal for me to
donate apples to the EFF, which they could then sell on the farmers market to
pay for their servers? Or would that make apples an alternative currency and
hence illegal?

Just saying - BitCoin calls itself a currency, but personally I consider them
to simply be a virtual good. I sold some bitcoin I mined, and I expect that is
how I should explain my income to the tax inspector. So I will probably even
have to pay VAT.

So when is a currency a currency? What is the difference between an apple and
a pound note? (Assume the apple never decays).

~~~
ralfd
You can eat it. And make delicious apple pie.

~~~
mikle
This reply makes the most sense in all of the threads here. We don't have
enough info to make scientifically correct claims about Bitcoins but everyone
keeps talking about it like it is figured out.

~~~
Tichy
What do you suggest? Sitting back with some popcorn and waiting for the nice
people in the TV to figure it out and explain it to us?

~~~
mikle
The nice people on TV know even less than us. Only time will explain this.

I'm sorry if you feel that sitting with popcorn and watching this mess and
waiting for it to stabilize is worse than being an early adopter.

~~~
Tichy
I had fun being an early adopter. Not that early, but my miner paid for
itself. What more can I wish for? So it made me more money than watching TV.

And when will be the next chance to experience a bubble life (if it is a
bubble - or a boom, or whatever)?

------
bellaire
Makes sense. EFF knows the law as well as anyone, the concern here is that
they could be entangled in as-yet-unknown legal disputes because of their use
of bitcoin. That'd be wasteful of both bitcoin and regular currency donations.

I think it makes sense for them to step up and admit that they don't
understand the law surrounding bitcoin well enough to be comfortable accepting
it. There's no point in assuming an unknown-sized risk just for bitcoin when
there's other things in their mission they can work towards.

I'd hate to see the EFF financially decimated merely because they accepted
bitcoin donations. They are useful people, let them pick their battles.

~~~
wnight
That said, I think it's fair for the Bitcoin people to feel abandoned by the
EFF for their sudden refusal to deal with btc without a thorough legal
explanation that others could work with. The EFF is pretty much who you'd
expect to fight for this type of project and for them to take a sudden and
largely unexplained hands-off stance is odd.

They do say "[this laundry list of laws] [are potentially related]" but
they're aware of the "three felonies a day" nature of our society. What isn't
potentially illegal?

Besides, most of those issues would go away if they simply resold their btc
immediately and claimed that as the donation value.

I can see that they don't want to be seen as endorsing the use of Bitcoin
specifically, especially storing value in it, but if they immediately resold
their btc they'd be using it safely (to avoid a hypothetical btc crash wiping
out their funds) and promoting responsible usage of any payment service
(storing money in Paypal accounts is a notorious no-no, even though it's
denominated in USD).

------
adulau
"we’re giving the Bitcoins that have been accumulated, or that may accumulate
in the future, in the account set up in our name to the Bitcoin faucet"

If I understand correctly, EFF has some legal doubts about Bitcoin as a
currency. So they give up and will give back randomly the money. Why not doing
the same for the existing currencies? or the current financial system? we may
have some doubts but it's not a reason to give away the money.

The donors usually expect the money to be used for their cause. As a EFF donor
(in USD and Bitcoin), I would like to be sure that the money is used for the
objectives of the non-profit organization.

------
sixcorners
Their address (I think):
[http://web.archive.org/web/20101203021130/https://www.eff.or...](http://web.archive.org/web/20101203021130/https://www.eff.org/helpout)

[http://blockexplorer.com/address/1MCwBbhNGp5hRm5rC1Aims2YFRe...](http://blockexplorer.com/address/1MCwBbhNGp5hRm5rC1Aims2YFRe2SXPYKt)

------
ignifero
Maybe they didn't officially endorse it, but by un-accepting it they are
unendorsing it, although they would not admit it. Doesn't this decision have
something to do with the MtGox hack incident?

------
bonch
For fuck's sake. Enough with the stupid Bitcoin stories.

------
panarky
Does the EFF have the same policy about donations in Facebook Credits, or Xbox
Points, or Farmville Farm Coins?

What makes bitcoin more dangerous than other digital currencies?

~~~
TeHCrAzY
I had a quick look, and I can't see where the EFF accepts donations in
Facebook Credits, Xbox Points or Farmville Farm Coins.

(Removed section related to your original comment).

------
sneak
What bullshit. I send them money and they don't use it and instead give it
away to some unrelated third party?

Assholes.

------
omouse
This is why playing within a broken system is such a pain in the ass and
doesn't allow a reform of the system. If everyone followed the EFF's example
_no one_ would be trading Bitcoins. Worried about fucking tax evasion and tax
laws, wtf.

~~~
sliverstorm
When you are a large target championing somewhat risky territory, you cannot
be as lackadaisical as one person. Especially when your entire platform is
based on morals, ethics and the like.

