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

    by lalena (1221394) on Friday March 22, 2013 @12:26PM (#43247615) Homepage
    Bit Coin works even if there are no "firms" to issue or exchange. Therefore, there is no one to regulate.
  • by Anonymous Coward on Friday March 22, 2013 @12:34PM (#43247753)

    They regulate entities that exchange bitcoins for dollars.

    If the average user can't exchange bitcoins for dollars, what good is it?

  • Pot...kettle... (Score:5, Insightful)

    by ProZachar (410739) on Friday March 22, 2013 @12:34PM (#43247755) Homepage

    "I think it's inevitable that just like you have U.S. dollars used by thieves and criminals..."

    Unfortunately, the worst thieves and criminals (the government and the banks that have bought the government) will be the ones doing the regulating.

  • by Uberbah (647458) on Friday March 22, 2013 @12:37PM (#43247785)

    Same as when banks started having to report transactions of a few thousand dollars to the feds, because it could be "money laundering". If it's not the mob, it's terrahrists or pedos.

    Same shit from both parties, different day.

  • Booo! (Score:2, Insightful)

    by Anonymous Coward on Friday March 22, 2013 @12:39PM (#43247809)

    Pry them out from my cold hard encryped grasp, if you can.
    Satanic usery worshipping asshats.

  • by jandrese (485) <kensama@vt.edu> on Friday March 22, 2013 @12:42PM (#43247839) Homepage Journal
    The regulation is clearly going to happen at MtGox or any other place that exchanges bitcoins for USD. Once you are sending $10,000 USD to someone, the money laundering provisions apply. This should work for as long as businesses don't accept bitcoins directly, which is still mostly the case. There are a small number of businesses that will deal directly in bitcoins, but not enough that you could spend $10,000 on them reasonably yet.
  • by Mabhatter (126906) on Friday March 22, 2013 @12:42PM (#43247845)

    Yea! Bitcoin is growing up! That means enough people are using it that the government is noticing. And of course the first thing the government does to show its appreciation is to start regulating it. Did they at least get a "Baby's first regulation" card?

  • by countach (534280) on Friday March 22, 2013 @12:48PM (#43247915)

    What good are dollars? They are just pieces of paper. Oh wait, you can exchange them for stuff, like you can with bitcoins.

  • Inline stock quote (Score:5, Insightful)

    by necro81 (917438) on Friday March 22, 2013 @12:50PM (#43247935) Journal

    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%

    Sigh. Inline, updating stock quotes in business and finance articles are annoying enough in their own context. When taken out of that context by a lazy and sloppy copy-paste, as had happened with this article summary, is just plain disappointing. Does nobody bother to copy-edit these things before they go live? I thought this was /., not reddit.

  • Re:Good For Them (Score:4, Insightful)

    by jamstar7 (694492) on Friday March 22, 2013 @12:50PM (#43247939)
    I guess we really need to keep FinCrime busy now that all those bankers and investment brokers are in jail. Oh, wait...

    But foolishly, folks, this looks like a way to puff up the arrest numbers and make for some easy convictions to justify their shrunken budget (FinCrime got seriously defunded the instant they started looking at the big banks and investment houses) to Congress. The prevailing metric of any police force is their arrest record and conviction rates. Go after small fish you can steamroller cause the whales fight back.
  • by moeinvt (851793) on Friday March 22, 2013 @12:53PM (#43247975)

    Money laundering? BS. If they cared about money laundering then they'd go after the bankers who are laundering millions of dollars in drug money for the cartels.

    What this is really about is a banker-government that will do anything and everything possible to prevent alternatives to their fiat + fractional reserve monopoly on money. These parasites absolutely can't have us serfs using a money supply which they can't control and manipulate in order to enrich themselves at the expense of everyone else.

    "Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

  • Re:Good For Them (Score:4, Insightful)

    by QRDeNameland (873957) on Friday March 22, 2013 @12:53PM (#43247983)

    All these financial instruments must be regulated and monitored for our safety.

    Yes, I remember the paralyzing fear and chaos of the days of a primarily cash economy, too. /sarcasm

  • by DerekLyons (302214) <`fairwater' `at' `gmail.com'> on Friday March 22, 2013 @12:53PM (#43247991) Homepage

    The problem with all this is that "money laundering" generally comes from activities which are victimless crimes, and are therefore not a crime because they don't affect anyone but the person doing them.

    Yeah - that money from a protection racket or from running a prostitution ring or from embezzling... no victims there. Or to put it another way, if you think ill-gotten gains only come from money that appears from thin air, you're either *very* innocent about how the world works or utterly and completely clueless.

  • by cayenne8 (626475) on Friday March 22, 2013 @12:53PM (#43247993) Homepage Journal
    But why SHOULD it be regulated?

    For that matter, WTF should the US govt be notified if I do any transaction over $10K in cash, bitcoins or barter??

    How did we let it become the govts business what we do with our money?

  • by interkin3tic (1469267) on Friday March 22, 2013 @12:56PM (#43248029)
    I suspect you are the one who doesn't get it. Government makes demands. If those demands aren't met, aren't countered through an internal process (like voting the pols who made those demands out), or if those demands aren't bluffs, there's an escalation. Eventually, force will be used.

    There are people to regulate. The government will identify them if the politicians, lobbyists, and special interests are determined enough. I'm not sure if they are. How many transactions over $10,000 in value are being done with bitcoins (the minimum for these rules applying)? I didn't read TFA too closely, but I couldn't see any estimates.

    Many slashdotters may disagree that the government isn't serious about stopping bitcoin use, but hear me out. Banks and law enforcement may have made statements "worrying" about it, but that doesn't mean they see it as a real threat due to how few people use bitcoins. Bitcoin proponents love to think that what they're doing will be a revolution, but bitcoins seem to be losing ground (if they had any to begin with.) I can't imagine banks or law enforcement spending much capital on a problem that is solving itself. The "I want taxes" bureaucrats aren't likely to pursue it either for the same reasons. They don't, after all, usually audit teenage babysitters for tax evasion. And I'd wager babysitting is a more lucrative economy than anything happening on bitcoin.

    Anyway, the target here probably isn't bitcoins, it's probably the other alternative currency mentioned in the article: corporations with virtual currency. Amazon coins. There's obviously someone to regulate there.

    Forget about bitcoins. They're not the story here despite the headline. Amazon or various other entities attempting to avoid sales taxes IS.
  • by SerpentMage (13390) <ChristianHGross&yahoo,ca> on Friday March 22, 2013 @01:00PM (#43248077)

    They will comply because if they don't it means that they can never have a US account, ask for US dollars, trade US equities, etc, etc, etc... If you are willing to 100% forgo every and any tie to the US, go for it! The US is even for us foreigners a part of our daily lives, directly or indirectly.

  • by Anonymous Coward on Friday March 22, 2013 @01:04PM (#43248125)

    Get a grip and reality and tell me your GOVERNMENT is the bigger threat than the gang bangers around the corner.

    When I pass through airports, I can honestly say that I am more afraid of the anti-terrorism and customs officials than I am of the terrorists.

  • by hedwards (940851) on Friday March 22, 2013 @01:07PM (#43248181)

    They don't have to, but if you go into a dealership and try to buy a new car with cash, they're probably going to see that as suspicious. Very, very few people pay cash in the literal sense for a vehicle, those who do have the money will usually pay by cash, because carrying around $24k in unrefundable currency is pretty risky. Not to mention a real PITA to count and carry.

    I used to get paid monthly in cash at a job I worked, and the 6500 would be a stack of hundreds about 2" high IIRC.

  • by h4rr4r (612664) on Friday March 22, 2013 @01:22PM (#43248397)

    WTF are you trying to say here?

    You cannot buy from amazon with bitcoin directly. Instead bitpay handles that. If you want to buy from amazon, someone has to turn that into USD at some point. They will be the regulated party. If amazon takes bitcoins, all that would change is amazon would be regulated as a money changer.

  • by shaitand (626655) on Friday March 22, 2013 @01:32PM (#43248551) Journal
    Today.
  • by DerekLyons (302214) <`fairwater' `at' `gmail.com'> on Friday March 22, 2013 @01:37PM (#43248631) Homepage

    What this is really about is a banker-government that will do anything and everything possible to prevent alternatives to their fiat + fractional reserve monopoly on money.

    The problem with your thesis is this - it's utterly and completely wrong. Subject to a few simple rules, the government doesn't give a shit whether you conduct your business in dollars, bitcoins, or mason jars full of hamster poop.

  • by dkleinsc (563838) on Friday March 22, 2013 @01:42PM (#43248685) Homepage

    Drugs besides alcohol and prescribed pills are illegal because they circumvent a distribution apparatus.

    That's not the reason why drugs are illegal. Harry Anslinger, who led the effort to outlaw pot in the 1930's, explained his motivations:
    "There are 100,000 total marijuana smokers in the US, and most are Negroes, Hispanics, Filipinos, and entertainers. Their Satanic music, jazz, and swing, result from marijuana use. This marijuana causes white women to seek sexual relations with Negroes, entertainers, and any others."

    That why the drugs favored by white people back in the day (tobacco and alcohol) are legal, but the drugs favored by non-white people at the same time (marijuana, opiates) are illegal.

    The next major round of prohibitions was very explicitly because Richard Nixon wanted an excuse to lock up the hippies, who he saw as a threat to America.

  • by Anonymous Coward on Friday March 22, 2013 @02:07PM (#43249039)

    Because there's a history of pimps using and abusing women with no marketable skills and hooking them onto addictive drugs or taking advantage of an existing addiction to push them into the line of work. It's a lot like robber-barons and wage-slaves, but with more a dire outcome and deeper hooks.

    There are prostitutes, strippers, and dancers that made a fair choice about their jobs, but it'd be hard to say what percentage got pushed into the field due to unreasonable social pressures and/or firm backhands.

  • Re:Good For Them (Score:4, Insightful)

    by QRDeNameland (873957) on Friday March 22, 2013 @02:07PM (#43249049)

    I wasn't talking about before currency was regulated by governments (no one is that old), I'm talking about before any transaction greater than $10,000 became subject to Federal scrutiny, like maybe 40 years ago, which I *do* remember, and yes it was a "primarily cash economy". How you took that mean "prior to gov'ts to controlling their currencies" is beyond me. My point was that the idea that we need these regulations "for our safety" is rather ludicrous when our society functioned just fine without them in recent memory.

  • by cayenne8 (626475) on Friday March 22, 2013 @02:13PM (#43249149) Homepage Journal

    so go make your own society, where such controls don't exist

    and after you get ripped off, by... get this... criminals... learn your lesson the hard way

    criminality exists in this world. i'm sorry this bothers you, and i'm sorry in your naive rage you blame those who pursue criminality rather than criminality itself

    Like another poster said, what about "innocent until proven guilty"?

    I mean, if you're in the US, that's the way it is supposed to be.

    If you suspect wrongdoing, then get a warrant, investigate....what's wrong with that?

  • by cayenne8 (626475) on Friday March 22, 2013 @02:17PM (#43249235) Homepage Journal

    Anyone can playact a childish form of appearing intelligent by asking stupid questions. Real intelligence appears in the form of making a case for one's positions.

    Well, not so much in the US. The Constitution and the govt and the courts do NOT grant us our rights, we are born with them inherently. Therefore, it is the proper thing to do to question any time the govt starts to assert new authority or set limits on your free to do activity.

    Also, there is nothing wrong with questioning laws already on the books...as that they might not should be there to regulate you.

    We're not here to serve the US govt, they are here to serve us...although, they often seem to be forgetting this.

  • by Anonymous Coward on Friday March 22, 2013 @02:40PM (#43249519)

    But... you can have no connection to the U.S, but If you start selling your oil in bitcoin your country will get invaded.

  • by rahvin112 (446269) on Friday March 22, 2013 @02:51PM (#43249677)

    Are you a fool or just trying to make a point?

    The drug war ship sailed a long time ago and 80% of Americans were out there cheering their loss of freedom. Cash reporting, private property seizure by suing the property, drug dogs, highway checkpoints, etc are all casualties of the war on drugs and almost no one in America was ever concerned about it.

    You want to stop the insanity? Become an activist for total legalization and a rollback of all drug war inspired legislation.

  • by roman_mir (125474) on Friday March 22, 2013 @02:53PM (#43249705) Homepage Journal

    so go make your own society, where such controls don't exist

    - people did, it was called USA.

    and after you get ripped off, by... get this... criminals... learn your lesson the hard way

    - yes, we know, we know who the criminals are. They are in the government or they have closest ties to the government, they are known as 'too big to fail'.

    criminality exists in this world. i'm sorry this bothers you, and i'm sorry in your naive rage you blame those who pursue criminality rather than criminality itself

    - 'criminality' is a word. What exists is a legal system that turns normal people's behaviour into 'criminal behaviour', because the real criminals don't want to have to sit on different roads, waiting for wagons to rob. They want to define what roads are, and every road must lead through a toll booth that this type of criminals have set up. It would be a pity if you didn't pay the toll and something would happen to your beautiful business. Oh, didn't you know, it was for the 'common good' and 'general welfare', apparently those things can be used to justify any type of criminality, from theft to murder, no problem. From income taxes and money printing to NDAA and drone strikes, no problem.

    but this doesn't change the fact that criminality is real, if unopposed it grows, and the vast majority of society has no problem with tactics like this to fight criminal organizations

    - clearly a true statement. The criminality is real, it is unopposed and it's growing and the vast majority of society has no problem with this criminality, they cheer for it because they share in the proceeds.

    welcome to reality

    - this reality is about to bite the people who support it in the ass.

    deal with it

    - we are dealing with it.

  • by fatphil (181876) on Friday March 22, 2013 @03:23PM (#43250093) Homepage
    Or the mega-rich.
  • by Darinbob (1142669) on Friday March 22, 2013 @03:47PM (#43250495)

    You can take a handful of dollars and spend them just about anywhere in the US, plus many parts of the world. Retail stores, gas stations, even to give to the kid who mows your lawn. A flash drive with some bitcoins on it is essentially useless almost everywhere, and only slightly less useless on the internet (it's country of origin). If you have a handful of Euros, or Yen, or whatever, at least in the US you can go to any bank and have them exchanged. I don't know of any bank that will exchange bitcoins. I can take my visa or mastercard (eurocard) and use it most places in the world and pay in the local currency but get billed at home in USD (with an extra fee). I can not use a visa/mastercard to buy anything that takes only bitcoins.

    Bitcoins are pointless everywhere except for a very tiny number of places on the internet.

    Now the idea of a digital currency is not a bad idea by itself. However the currency should be tied to something tangible at the start, and not generated from nothing by "mining". The people pushing bitcoins the most are the speculators who have a significant chunk of mined bitcoins that they got for free, and they are hoping that the value goes up so that they can cash out. The people wanting a true digital currency are not necessarily bitcoin fans.

  • by shaitand (626655) on Friday March 22, 2013 @05:40PM (#43251949) Journal
    Exactly. People are always looking for what they need Bitcoin for right now. Bitcoin fortunately has managed to find enough answers for that so far but the benefits if Bitcoin gains critical mass are astounding.

    Bitcoin has the potential to be a universal currency that no government and can seize or freeze. No company can trick you into a subscription with fine print and make you pay. No vendor can force you to put a debt before buying food for your family because the bank or government supports them over you.

    This is all good for the people. No more charge backs, and no more ability for merchants to pull funds from your account without getting authorization every single time. No more US creating money through hidden inflation. No more China artificially reducing the value of it's currency.

    The current schemes burn honest consumers, merchants, banks, traders, and even governments. For every advantage gained by manipulating the system in some way there is somewhere else they get burned. A value exchange medium that isn't controlled by anyone, is global, can't be seized, can't be manipulated, and can be exchanged instantly and easily is ultimately a good thing for everyone.

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