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Bitcoin Token Maker Suspends Operation After Hearing From Federal Gov't 258

Posted by timothy
from the if-the-artifact-is-a-crime-why-not-the-system? dept.
First time accepted submitter Austrian Anarchy writes with this story via Reason (and based on a report at Wired) about a maker of physical Bitcoin tokens. Quoting from Reason's take: "Mike Caldwell ran a business called Casascius that printed physical tokens with a bitcoin digital key on it, key hidden behind a tamper proof strip. He'd charge $50 worth of bitcoin to print a bitcoin key you sent him via computer on this token. Cool stuff--a good friend of mine found one sitting unnoticed in her tip jar from an event at which she sold her artisan lamps from 2011 and was naturally delighted given the nearly 1000x increase in value of a bitcoin since then. So, you're making something fun, useful, interesting, harmless--naturally the federal government is very concerned and wants to hobble you. 'Just before Thanksgiving, [Caldwell] received a letter from the Financial Crimes Enforcement Network, or FINCEN, the arm of the Treasury Department that dictates how the nation’s anti-money-laundering and financial crime regulations are interpreted. According to FINCEN, Caldwell needs to rethink his business. "They considered my activity to be money transmitting," Caldwell says. And if you want to transmit money, you must first jump through a lot of state and federal regulatory hoops Caldwell hasn't jumped through.'"
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Bitcoin Token Maker Suspends Operation After Hearing From Federal Gov't

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  • by bazmail (764941) on Thursday December 12, 2013 @07:22PM (#45675649)
    Why does it automatically follow that the exchange of trust, which is what currency essentially is, between willing participants must involve some self appointed middle man with the power of veto?

    Bitcoin users are not against regulation per se, but the regulators must be able to explain why they should have that power.
  • by TerryMathews (57165) on Thursday December 12, 2013 @07:36PM (#45675767)

    Selling "things" for money is not transferring money.
    Selling stored value cards, like gift cards (which I think is the closest physical analogy), is transferring money and monitored by FinCEN.

  • by Okian Warrior (537106) on Thursday December 12, 2013 @07:55PM (#45675943) Homepage Journal

    If I make giftcards to Amazon, say (I mean stupidly duplicating what Amazon already has in gift cards but you pay me and I sell you an Amazon gift code,) I'd expect to be regulated.

    Apropos of nothing, should Amazon expect to be regulated for making Amazon gift cards?

    This "I'd expect to be regulated" is, quite frankly, astonishing. It brings to mind a sea of humanity, all going about their daily lives while intoning the phrase "I expect to be regulated".

    If I'm doing something that lots of other businesses do unregulated(*), and assuming that the practice doesn't infringe on someone else's rights, my first impression is that I expect *not* to be regulated.

    I wonder how you came to believe that particular mantra.

  • by pla (258480) on Thursday December 12, 2013 @08:11PM (#45676049) Journal
    So, tell me again why this guy doesn't think what he's doing falls under any kind of regulatory enforcement?

    Because if you take my $50 bill and give me two $20s and a $10, we call that "making change", not "money laundering".

    Casascius exchanged Bitcoins for other Bitcoins, plus a small fee for the cool novelty token. He didn't exchange BTC for USD, or vice-versa, or anything even remotely similar to that. He made frickin' change (albeit more literally than normal).

    That said - I still have one first- and one second-gen Casascius 1BTC coins somewhere around here. They already traded at a good premium over their exchange rate, this news should send their collectable value through the goddamn roof! Thanks, FinCEN - I still hope you all choke to death on a bowl of hyena semen, but this time, you've really done me a solid!
  • by roman_mir (125474) on Thursday December 12, 2013 @08:16PM (#45676075) Homepage Journal

    Wrong, people make money, not governments. People should expect freedoms, not regulations when they make money and transfer it among themselves. The only reason government uses violence to regulate money is because gov't is Mafia and it wants its cut.

  • Re:SHOCKED! (Score:4, Interesting)

    by Mitsoid (837831) on Thursday December 12, 2013 @08:44PM (#45676229)

    That's a good point. I'm sure the feds would still have a problem if banks trade IOU's and dont actually move the money, but do it entirely in not-dollar-values...

    Bank A: I'll pay you 500 Monopoly bitmoney for that loan package. But lets leave it to monopoly money so there's less taxes
    Bank B: Okay. Sounds Good. Here.. have a 'free' gift.
    Bank B: I want to cash in my 500 Monopoly bitmoney for your Widgets and such.
    Bank A: Sure, here, have them for 'free'.

    Seems fair that he has to play by the same rules. I dont care about bitcoins, but people claiming bitcoins are above any and all laws (including laws of the country they are being used in, and converted to physical objects in) is plain silly.

  • by lgw (121541) on Thursday December 12, 2013 @09:16PM (#45676391) Journal

    Because you drove there on a road that requires taxes, and have a reasonable amount of saftey, that requires taxes, and the bankers are regulated to not steal from you, which takes taxes.

    Always with this straw man. Enough with it - the strawman is dead, bereft of life it rests in peace. It has shuffled off this mortal coil and joined the straw choir invisible!

    The amount of taxes needed to fund roads and regulate banks an such is a trivially small and unobjectionable fraction of current taxation. The majority of taxation is money collected from less-politically-favored groups and mailed directly to members of more-politically-favored groups, plus the military.

    No one is trying to take your roads. No amount of cuts to road build and regulation could possibly balance the budget in the first place. That's not what the debate is even about.

Live within your income, even if you have to borrow to do so. -- Josh Billings