

Federal judge: Bitcoin, “a currency,” can be regulated under American law - tesmar2
http://arstechnica.com/tech-policy/2013/08/federal-judge-bitcoin-a-currency-can-be-regulated-under-american-law/

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daraul
Calling Bitcoin a currency, and therefore allowing that it can be regulated,
is an important factor in whether the government can care about it at all.

If they decided that it wasn't a currency and had no value, the case against
the Bitcoin Savings and Trust founder would go nowhere. This decision cuts
both ways. Without recognizing it as having value, there'd be no fraud to
charge and if you were defrauded, no remedy available.

~~~
Dylan16807
It doesn't have to be a currency to have value. Defrauding people with
baseball cards is illegal.

~~~
julespitt
Baseball Cards is a good example. I think that different Federal, State and
Local agencies should prosecute such things.

Meanwhile, the SEC has far bigger fish to fry, as it were.

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mpyne
Um, duh? That one is literally right in the Constitution (between regulating
Coinage and control of interstate commerce).

~~~
ferdo
There were many private currencies in the 19th century that the government
never claimed power over. Here's one example:

[http://en.wikipedia.org/wiki/Christopher_Bechtler#The_Bechtl...](http://en.wikipedia.org/wiki/Christopher_Bechtler#The_Bechtler_Private_Mint)

This move with regard to Bitcoin is merely Bank.Gov trying to protect its
monopoly on the issuing of currency.

~~~
stinkytaco
I don't know that the government has any illusions over the issuance of
currency. I can spend and exchange my foreign currency in the US, correct? I
can take my US dollars and transfer them and get foreign currency in another
country as well.

What this says is that any commercial exchange is subject to government
regulation.

~~~
ferdo
The US government claiming power over the currency its banking corporation
issues is one thing. I don't know why people just accept, without question,
the claim that the government has regulating authority over a currency that it
doesn't issue.

~~~
rayiner
Because the Article I, Section 8 says that Congress has the power to:

"To coin Money, regulate the Value thereof, _and of foreign Coin_ , and fix
the Standard of Weights and Measures;"

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ferdo
This isn't Congress doing the "regulating". It's the Executive Branch.

~~~
rayiner
It's the executive branch enforcing regulatory laws duly passed by Congress.

~~~
ferdo
It strikes many, me included, as an overreach of executive power.

~~~
mpyne
Then vote in Representatives who agree with you, instead of claiming that the
government has no authority. They now have the authority, they were given it
by the legislature, which is in the legislature's power to do. If you want the
executive to _not_ have the authority then you must have the legislature take
it back. But simply claiming that the government doesn't have the authority
just because you wish they would not have the authority, doesn't actually make
it so.

~~~
ferdo
When government loses consent of the governed, it no longer has authority to
govern. That won't stop those that believe themselves fit to rule from ruling
if they have the power to do so.

As I had to explain the difference between lunch and arbitrary use of
government power, do I also have to explain the difference between government
of consent and tyranny?

~~~
tptacek
Another great example of how discussing politics on HN is frustrating. You
started out with an observation that the executive branch had overreached. It
was pointed out that they were delegated this power explicitly by the
legislature. Now your argument changes, without acknowledging the correction
or the error of your previous comment, and, as usual, it shifts to something
too nebulous to discuss.

It's not your fault; this is just a really terrible venue for political
discussions.

~~~
ferdo
Or perhaps it's indicative of the many abuses of authority that emanate from
government?

~~~
dylangs1030
No, you missed the point entirely. It's indicative of the slippery slope you
encounter when discussing politics on a tech news forum like this at critical
mass.

~~~
ferdo
No, you missed the point.

The overarching power of government is the problem, not how we discuss it on
the net.

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diminoten
Wait, I don't understand - how does the US government have jurisdiction,
practically speaking, over Bitcoin transactions occurring entirely outside of
the US?

Or is that not what this says? Because to me, "can be regulated under American
law" means what I wrote above.

~~~
jaekwon
It means they'll pass or enforce laws that require citizens to pay taxes,
exchanges to file paperwork & pay fees, etc. It means if you're caught not
abiding by the law, then you will get punished.

Obviously they don't have natural jurisdiction over and above crypto-anarchy,
unless they have the capacity to wage war against the protocol. They probably
do. There will be workarounds. So it goes.

I believe the ponzi pirate PirateAt40 should be punished, not because Bitcoin
falls under the jurisdiction of government as money, but rather because the
pirate defrauded people. You can defraud people with beanie babies or baseball
cards as well.

~~~
betterunix
Why would the government bother attacking the protocol? I am sure the NSA has
the necessary resources, but there would be no point. Failing to pay taxes is
jail time. Failing to pay fees as an exchange means your business is
shuttered, and continuing after that means jail time. Maybe other countries
will be more lenient but US Bitcoin users will be in trouble.

It is also very likely that any taxes or fees associated with Bitcoin will
have to be paid in dollars. If there are no legal avenues for exchanging
Bitcoin for dollars then it would be illegal to do business in Bitcoin at all.
You may personally skirt the law on that, but your local supermarket will not,
and neither will your apartment complex, your auto dealership, or any of the
dozens of other businesses you deal with in your daily life.

~~~
jaekwon
I guess people who want to avoid paying taxes will have to find other local
businesses that do the same.

What matters to bitcoin users is whether the transaction goes through or not.

~~~
betterunix
How many businesses do you know of that pay no taxes at all? Even mafia fronts
pay some taxes (having your front shut down for failing to pay property taxes
tends to work out poorly). There is also the matter of where _those_
businesses will get their supplies -- eventually they are going to have to
deal with someone who pays taxes.

What this boils down to is this: how much faith you have in the government's
ability to enforce the law, particularly those laws related to money. I have
quite a bit of faith in the government's ability to enforce the tax code; even
people who cheat on their taxes are rarely bold enough to not bother to pay
any taxes.

~~~
jaekwon
They can enforce it within their powers. Confiscating bitcoins like they
confiscate wages is not within their powers. They can jail you for evading
taxes apparently. C'est la vie.

~~~
dragonwriter
> Confiscating bitcoins like they confiscate wages is not within their powers.

The government confiscates wages by sending legally binding orders to people
who they believe might owe you wages directing them to remit the owed wages to
the remit them to the government instead.

They obviously can do the same thing with bitcoins. The only _current_
difficulty with doing that with bitcoins now is that bitcoins are currently
used for so few transactions for so few people that its not likely to be worth
the governments effort to find out who is likely to owe you bitcoins to serve
them with such orders. If bitcoin were to become widely used, that would
change.

~~~
jaekwon
> They obviously can do the same thing with bitcoins

How? They can't confiscate bitcoins without the private key. It's not like
Bitcoin is run by a bank with an internal central ledger.

~~~
dragonwriter
> How?

I suggest you reread the sentence that precedes the one you quoted (and which
is the one that "the same thing" refers to.) Because it answers your question.

------
lmartel
Good luck!

~~~
betterunix
That is kind of like saying, "Good luck collecting taxes!" At some point you
need to exit the Bitcoin system -- maybe you need your nation's currency,
maybe you need a new computer, maybe you just need to buy your lunch, but
regulations can and mostly certainly will be enforced at the exit points.

~~~
jaekwon
I'm sure people used to say the same thing about the dollar or bank notes, and
exiting to the underlying asset like gold. It is possible to remain within the
Bitcoin system. It may be difficult now, but it's getting easier every day.

~~~
betterunix
As long as the government is collecting taxes, and as long as you cannot make
tax payments with Bitcoin, you cannot remain within the Bitcoin system. Even
if all your other transactions are done with Bitcoin, you'll eventually need
to get some dollars to pay your taxes -- and then you'll be hit with
regulations.

As for gold versus paper money, the above reasoning does not apply. Paper
money _is_ accepted for tax purposes (and would be far less popular if it was
not).

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jakeogh
The psychopaths that demand we accept their "protection" want to regulate the
exchange of information at all costs.

Exchanging numbers is speech. The war on the 1st continues.

~~~
ante_annum
I'd love to trade email addresses so that we can exchange numbers in the
future! My favorites are 17, 3225, and another one that I don't want to
exchange with just anyone.

Unrelatedly, there's a problem with calling things only numbers when they're
much more than just numbers. If bitcoin were only numbers, nobody would buy
them. People buy them because there's an expectation to store and liquidly
transfer value.

The claim that the government can't regulate atoms won't stand up if the atoms
you have are in an arrangement that fires bullets.

~~~
dragonwriter
> The claim that the government can't regulate atoms won't stand up if the
> atoms you have are in an arrangement that fires bullets.

Well, it might, given the 2nd Amendment. That's not to challenge the general
principal you are arguing for, only the specific choice of analogy.

