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Bitcoin Government The Almighty Buck United States

Bitcoin To Be Regulated Under US Money Laundering Laws 439

Posted by Soulskill
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."
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Bitcoin To Be Regulated Under US Money Laundering Laws

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  • Much better article (Score:5, Informative)

    by SteveFoerster (136027) <steve AT stevefoerster DOT com> on Friday March 22, 2013 @11:49AM (#43247927) Homepage

    For the few, the proud, the article readers: Pelle Braendgaard of PayGlobe wrote a much better article on the same topic [payglo.be].

  • Re:They don't get it (Score:5, Informative)

    by h4rr4r (612664) on Friday March 22, 2013 @11:57AM (#43248039)

    I call bullshit on that.
    Amazon does not take bitcoin. Someone is converting that to pay amazon USD. They will regulate the one doing the conversion.

  • Re:They don't get it (Score:5, Informative)

    by h4rr4r (612664) on Friday March 22, 2013 @12:00PM (#43248081)

    The Euro is another currency that millions of people accept and pay taxes with. Bitcoins are not.

  • Re:They don't get it (Score:2, Informative)

    by Anonymous Coward on Friday March 22, 2013 @12:06PM (#43248153)

    To fight crime, but if you want to live in a country that corruption has overrun you can just go to mexico.
    The funny thing is that I'm sure you are against corrupt politicians, but it's much easier to just ignore consequences of what you want.

  • Re:They don't get it (Score:5, Informative)

    by Anonymous Coward on Friday March 22, 2013 @12:08PM (#43248189)

    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.

  • by markass530 (870112) <(markass530) (at) (gmail.com)> on Friday March 22, 2013 @12:12PM (#43248223) Homepage
    they did go after them, you didn't hear about that especially brutal slap on the wrist they got?
  • Re:They don't get it (Score:5, Informative)

    by Ghostworks (991012) on Friday March 22, 2013 @12:44PM (#43248719)

    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 [wikipedia.org], 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.

  • Re:Pot...kettle... (Score:5, Informative)

    by IamTheRealMike (537420) <mike@plan99.net> on Friday March 22, 2013 @02:03PM (#43249803) Homepage

    I think you have to separate the question of whether X/Y/Z things are bad from the question of money laundering. AML is an extremely complex, expansive and vague set of laws that more or less attempt to fight crime by creating a systematic network of surveillance and control over the financial system. That's why you read about people having to automatically file paperwork for transactions that are "suspicious" (what this means is not well defined). That's why anonymous banking is illegal - the assumption is anyone could be a criminal so everyone has to monitored, all the time. And in fact, it appears that parts of the USG have created a system in which not only are such reports dumped, but all records of all financial transactions ever (this is the TFTP).

    One may question whether systematic surveillance is the right way to fight crime ... whether the costs are worth the benefits. Most western societies instinctively reject widespread surveillance - we wouldn't accept government controlled security cameras in our homes despite the obvious application to crime fighting. However without anyone really noticing this is what's happened to finance.

    The other scary thing about this system is that with the ability to track every transaction comes the ability to veto them too. Consider the case of the US citizen who got on the wrong side of Israel and was put on the sanctions list for 17 years [suntimes.com]. He was finally removed (and they agreed he was not a terrorist) after the Treasury was sued, 1 day before the law stated they had to respond. This kind of rampant abuse of power comes due to the ability to punish people without going via the courts, a power made possible by extensive AML controls.

  • Re:three rocks (Score:4, Informative)

    by Darinbob (1142669) on Friday March 22, 2013 @03:11PM (#43250863)

    No matter what you're paid with, you still need to pay the taxes to the IRS if you are a US citizen, and in almost all cases they must be converted to USD. Having income in bitcoins does not exampt you from tax obligations on that income. Even if you are paid in teddy bears you need to be reporting this.

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