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Bitcoin, Money And Funds: The Application Of The Unlicensed Money Transmitting Services Statute To Virtual Currency

Bitcoin, Money And Funds: The Application Of The Unlicensed Money Transmitting Services Statute To Virtual Currency

You are at: Home Blog Bitcoin, Money and Funds: the Application of the Unlicensed Money Transmitting Services Statute to Virtual Currency Bitcoin, Money and Funds: the Application of the Unlicensed Money Transmitting Services Statute to Virtual Currency A popular tool used to prosecute Bitcoin business operators is 18 U.S.C. 1960, the Federal prohibition against operating an unlicensed money transmitting business. Bitcoin is at the forefront of the electronic currency market. With over 10 billion USD in market cap, there is now a significant amount of real money invested into this virtual currency. Though Bitcoin has survived its early stages in the investment market, the legal framework in which Bitcoin lives has been slow to solidify. Along with the nascent and complicated regulatory framework on both the Federal and State level, Bitcoin business operators are now being prosecuted under 18 U.S.C. 1960, which criminalizes the operation of an unlicensed money transmitting business. This article addresses the initial question as to whether Bitcoin is covered by 18 U.S.C. 1960, and, more specifically, whether it has been characterized as money or funds under that statute. Despite conflicting classifications by Federal regulators as to what Bitcoin actually is, the few Courts that have addressed this issue have held that 18 U.S.C. 1960 covers Bitcoin because [d]ictionaries, courts, and the statutes legislative history all point to the same conclusion: Bitcoins are funds. See United States v. Murgio, No. 15-cr-769, 2016 WL 5107128, at *4 (S.D.N.Y. Sep. 19, 2016); United States v. Budovsky, No. 15-cr-368, 2015 WL 5602853 (S.D.N.Y. Sep. 23, 2015); United States v. Faiella, 39 F. Supp. 3d 544 (S.D.N.Y. 2014). A. The Department of Justice Has Decided to Prosecute Individuals f Continue reading >>

Licenses - Coinbase

Licenses - Coinbase

Department of Commerce, Community and Economic Development Arizona Department of Financial Institutions Connecticut Money Transmitter License, MT-1163082 Agency: Connecticut Department of Banking District of Columbia Money Transmitter License, MTR1163082 Department of Insurance, Securities, and Banking Georgia Department of Banking and Finance Idaho Department of Finance, Securities Bureau Kansas Money Transmitter License, MT.0000078 Kansas Office of the State Bank Commissioner Kentucky Department of Financial Institutions Louisiana Office of Financial Institutions Department of Professional & Financial Regulation Maryland Commissioner of Financial Regulation Mississippi Department of Banking and Consumer Finance Nebraska Money Transmitter License, 1163082 New Jersey Department of Banking and Insurance New York Department of Financial Services North Dakota Department of Financial Institutions Oregon Department of Consumer and Business Services Division of Finance and Corporate Securities PO Box 14480, 350 Winter St., NE, Suite 410 Pennsylvania Money Transmitter License, 51015 Pennsylvania Department of Banking and Securities Office of the Commissioner of Financial Institutions South Dakota Department of Labor and Regulation Tennessee Department of Financial Institutions Vermont Department of Financial Regulation State of Washington - Department of Financial Institutions West Virginia Division of Financial Institutions Please note that this license does not cover the transmission of virtual currency. If you have a complaint or other concern about Alaska money services licensees, authorized delegates, and the money services provided by money services licensees and authorized delegates, you may contact the Alaska Department of Commerce, Community, and Economic Development Continue reading >>

Maryland Beefs Up Consumer Protection To Cover Federal Rollback

Maryland Beefs Up Consumer Protection To Cover Federal Rollback

Home Maryland News Maryland beefs up consumer Maryland beefs up consumer protection to cover federal rollback By Kate Ryan | @KateRyanWTOP January 26, 2018 11:08 pm 01/26/2018 11:08pm The crisis coming up for Parent Plus loans could be worse than the housing crisis, a Wall Street Journal reporter says. (Thinkstock) WASHINGTON Maryland is taking steps to implement the findings of a commission set up to protect consumers. The legislature set up the Maryland Financial Consumer Protection Commission last year. The goal: provide safeguards for consumers should the federal government roll back regulations targeting the financial industry. On Friday, lawmakers in Annapolis announced that they will draft laws to protect consumers based on the commissions findings and recommendations. Among the recommendations in the commissions report: Require credit-reporting agencies, such as Equifax, to notify consumers of data breaches. Create a student loan ombudsman to protect student loan recipients. Crack down on abusive practices under the Maryland Consumer Protections Act. Adopt new financial consumer protection laws dealing with such issues as student loans, financial technology, virtual currencies (such as Bitcoin) and consumer data breaches. Maryland state Sen. James Rosapepe said lawmakers intend to request more money to fund the consumer protection arm of the Maryland attorney generals office. It would put more cops on the Wall Street beat,Rosapepe said. He said part of what lawmakers hope to do is look at what he calls new threats to economic stability. Rosapepe includes instruments such as Bitcoin in that area. There are issues of what kind of a product Bitcoin is, so were saying the regulators need to take a close look at how current laws need to be enforced and that those la Continue reading >>

Bitcoin: Should I Invest? You Should Read This First...

Bitcoin: Should I Invest? You Should Read This First...

The Future Now: Bitcoin & Cryptocurrency Updates CLICK HERE for The top ten questions you should ask before investing in #blockchain #bitcoin #ripple #ethereum #bitcoincash #cardano #stellar #litecoin #XEM #MIOTA #Dash #cruptocurrency #altcoin #darkcoin Bitcoin $40,000per CNBCand Michael Novogratz CLICK HERE . But in meantimeBitcoin to drop to $8,000 CLICK HERE and Novogratz to forma full service, digital assets cryptocurrency merchant bank. CLICK HERE. AlsoCrypto could be largest bubble in our lifetimes. Here. My Current Investment Thesis: The market price of Bitcoin may not reflect demand because of the backlog in opening accounts. I have been waiting for 2 months for an account at bitstamp (and many other exchanges). Bitmain has sold out in less than an hour. In any event, if you are not making your livelihood with Bitcoin, do not invest more than you are willing to lose. Bitcoin Investment Thesis: The market price of Bitcoin may not reflect demand because of the backlog in opening accounts. I have been waiting for 2 months for an account at bitstamp and many others Charles Zimmerer (@charleszimmerer) February 15, 2018 UPDATE February 15, 2018Brickell Key, Miami, Florida aka Claughton Island aka Burlingame Island. Bitcoin is roaring back. Fundstrat Global Advisors LLCs Tom Lee:Based on an analysis of the 22 corrections of 20 percent or more that Bitcoin has seen since 2010, Lee determined that in bull periods, Bitcoin takes about 1.7 times the duration of its decline to recover. That time frame implies that it will take 85 days for the cryptocurrency to fully bounce back from its latest plunge, which lasted for 50 days meaning it should rise to fresh records by July 2018. Courtesy Bloomberg @chengevelyn Great Work! I think people in crypto are hiring tax lawyers lik Continue reading >>

Bitcoin 101: A Primer For Digital Currency

Bitcoin 101: A Primer For Digital Currency

Bitcoin 101: A Primer for Digital Currency Bitcoin 101: A Primer for Digital Currency SMITH BRAIN TRUST Out of curiosity, the Smith School's Joe Rinaldi says he asked hundreds of Bitcoin buyers to describe the cryptocurrency, "and virtually 95 percent couldn't explain their investment." Subsequently, Rinaldi, an adjunct finance professor at the University of Maryland's Robert H. Smith School of Business, and Smith School Master of Finance student Weijia (Lily) Tu and UMD economics student Michael James Huber have drafted the following primer for Bitcoin owners and potential buyers. What is bitcoin? It is a digital form of currency with no government or central bank importantly standing behind it. The platform allows for a direct currency-to-Bitcoin exchange, or vice versa, without brokers. The transaction, through the blockchain ledger, bypasses traditional middlemen. The model is a true disrupter since it eliminates the roughly 10 percent to 20 percent in fees that banks would otherwise charge to exchange currency. However, it carries risk as an algorithm that can be manipulated and hacked. It also has limited-to-no government oversight. The framework is now over 10 years old and difficult to update. More advanced cryptocurrencies have been launched, i.e., Etherum and Ripple. Both are growing faster than Bitcoin and could supplant it as the leading cryptocurrency. How do I get started?Download the Bitcoin client software, or just get a standalone wallet. A wallet is defined as an online account that comes with the Bitcoin software, similar to Apple Pay. The account is maintained by the account holder. (The accountholder is entirely liable for any losses.) How do I buy Bitcoin?The easiest way to buy Bitcoin is to go to an online exchange and place an order. It will aut Continue reading >>

Maryland Bills Call For Study, Possible Regulation Of Blockchain

Maryland Bills Call For Study, Possible Regulation Of Blockchain

Maryland Bills Call for Study, Possible Regulation of Blockchain Mar 20, 2018 at 20:00 UTC|UpdatedMar 20, 2018 at 20:02 UTC Two bills before the Maryland legislature call for the U.S. state to study and possibly regulate blockchain technology. House Bill 1634 and its companion Senate Bill 1068 , together known as the Financial Consumer Protection Act of 2018,would mandate that the Maryland Financial Consumer Protection Commission study the technology and the space. Afterward, the commission would"include recommendations for State actions to regulate cryptocurrencies in its 2018 report to the Governor and ... the General Assembly regarding State action to regulate cryptocurrencies." The bills are notable, as Maryland has generally stayed out of the cryptocurrency regulation fray. The last time a state agency discussed the topic was in 2014 , when the Maryland Office of the Commissioner of Financial Regulation issued a warning to bitcoin investors. At the time, the agency noted that cryptocurrencies were unregulated, and warned investors to do their own research before buying bitcoin or its cousins. It also noted that state and federal regulators were working on a framework for regulating cryptocurrencies, but no regulations have appeared in Maryland in the four years since. While the Maryland bills do not spell out what form any future regulations would take, they are part of a worldwide surge in regulatory interest in the cryptocurrency space. Recently the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have begun more actively tamping down on initial coin offerings (ICOs) deemed fraudulent or otherwise in violation of the law. The SEC in particular has launched a major investigation into ICOs, and though the details of Continue reading >>

Bitcoin Hype Pushes Hackers To Stash Their Money In Lesser-known Cryptocurrencies

Bitcoin Hype Pushes Hackers To Stash Their Money In Lesser-known Cryptocurrencies

Cybercriminals are increasingly moving away from bitcoin as their preferred digital currency in favor of lesser-known cryptocurrencies because of prolonged transaction delays, surging transaction costs and general market volatility, experts tell CyberScoop. Although cybercriminals have been slowly moving away from bitcoin for months, researchers say a noticeable shift towards alternative coins such as Monero, Dash and ZCash occurred when bitcoins value skyrocketed over $19,000 for one bitcoin in mid-December. The price has drastically fluctuated between $12,000 and roughly $19,000 since then. Many cybercriminals emulate the operational best practices oflegitimate businesses in order to minimize their overhead costs and maximize returns, and in the case of high transaction costs with bitcoin, it makes perfect sense to look at other coins with smaller overheads, saidRichard Henderson, a global security strategist with endpoint cybersecurity firm Absolute. Experts say this shift does not necessarily mean that hackers have abandoned bitcoin altogether, but instead current conditions in the criminal underground may be forcing them to change their behavior. Weve seen [dark web] sites pop up in recent months that market themselves on only accepting alternative cryptocurrenciesMonero Only in the case of currently-down Libertas Market,said Emily Wilson, director of analysis at Maryland-based dark web intelligence firmTerbium Labs. Markets being able to operateandadvertise based on alternative cryptocurrencies speaks to a slow but visible change in the system Slow is key here, though. Market admins arent adjusting or reacting at the same pace as avid traders. The first sign of dissatisfaction from cybercrime syndicates with bitcoins performance began around mid-2017, according t Continue reading >>

Maryland Officials Issue Warning On Bitcoin, Virtual Currencies

Maryland Officials Issue Warning On Bitcoin, Virtual Currencies

Maryland officials issue warning on bitcoin, virtual currencies 'Little to no regulation and no safety net,' attorney general says A man talks on a mobile phone in a shop displaying a bitcoin sign (PHILIPPE LOPEZ / AFP/Getty) April 25, 2014|By Jamie Smith Hopkins, The Baltimore Sun State financial regulators and the attorney general issued a warning Friday about bitcoin and other virtual currencies, saying buyers and sellers should be careful. "For now, there is little to no regulation and no safety net for consumers or investors who lose their money dabbling in virtual currency such as Bitcoin," Attorney General Douglas F. Gansler said in a statement. Mark Kaufman, Maryland's commissioner of financial regulation, said in that statement that the state doesn't regulate virtual currencies but is examining issues related to them. The state released a consumer advisory that details some risks. Among them: virtual currencies are highly volatile and can be stolen. A major bitcoin exchange announced in February that almost 850,000 bitcoins, most belonging to customers, had gone missing. But the currency which allows users to avoid transaction fees and buy items anonymously has won enthusiastic support from some corners. Overstock.com is among the businesses accepting payment in bitcoin. Continue reading >>

Bitcointaxes :: Bitcoin Tax Accountants

Bitcointaxes :: Bitcoin Tax Accountants

Amy Wall is a registered member of National Association of Enrolled Agents, the Southern Arizona Chapter of Enrolled Agents and the National Association of Tax Professionals, and is a National Tax Practice Institute Fellow. She has a Masters degree in Business Administration. Amy prepares tax returns for individuals and businesses, including partnerships and S-corps. She feels that preparing tax returns is far more than just filling out forms; its about building relationships with clients to help them make tax-wise choices throughout the year. She is available year-round so clients can call on her for help at any time. HARP LAW provides practical legal services that focus on the needs of start-ups, small businesses, non-profits, entrepreneurs and creatives. Our practice area includes tax law and cryptocurrency issues, as well as general business and corporate matters. At the Tax Law Offices of David W. Klasing in Los Angeles and Irvine, we offer the services of a tax attorney and a CPA for the price of one. Licensed as a lawyer in California and certified in public accounting, our firm provides businesses and individuals the help you need to navigate your tax issues. Please dont hesitate to contact us via phone call or schedule an appointment by completing the confidential form on the right. Tax Representation, Tax Defense, International Taxes, Tax Relief, Bitcoin and Cryptocurrency We offer a hyper tax efficient business entity structure from a pass through entity for Bitcoin investors with a portfolio value of $5M or more. Alex Kugelman is an attorney concentrating on tax controversies, domestic and international tax compliance. Mr. Kugelman counsels and represents individuals and small businesses on various cryptocurrency issues as it relates to tax and other compli Continue reading >>

Bitcoin Regulation Underway In U.s. States | Pymnts.com

Bitcoin Regulation Underway In U.s. States | Pymnts.com

The regulators are coming, the regulators are coming. Since venture money keeps fueling the beast called bitcoin and the blockchain, regulators have decided to put their arms around that which is bitcoin in an effort to better control its every move. So, to keep up with all the ebbs and flows of who is regulating what, weve gathered the recent news on regulation. New York States Department of Financial Services granted its first official business license for a bitcoin exchange, itBit, in early May.The licensewill allow the bitcoin exchange to bring in customers across the country in a legal manner, which then puts the onus of regulation on the state.Allowing itBit to align itself in a similar manner to how banks are regulated is a first for the bitcoin exchange community, and a victory (of sorts although most dont necessarily characterize regulation as a victory) for the bitcoin community, as it marks the first fully regulated digital currency exchange in the U.S. New Jersey seems to be following New Yorks footsteps and giving bitcoin a regulatory framework. Now, the New Jersey Legislature is attempting to push through a bill that would help regulate digital currencies and also offer tax breaks for companies that exchange bitcoins. That measure could potentially push more businesses to accept bitcoin. I want to encourage innovation here in New Jersey. I think theres an opportunity for job creation, said New Jersey Assemblyman Raj Mukherji, who is credited with spearheading the bill withAssemblyman Gordon Johnson. As a major banking hub, North Carolina is also investigating how it can legislate bitcoin to help protect consumers and prevent the currency in being used in money laundering efforts. The states banking commissioner is trying to help push through legislation,w Continue reading >>

Bitcoin Plants A Foothold In Central Maryland

Bitcoin Plants A Foothold In Central Maryland

Bitcoin Plants a Foothold in Central Maryland Theres no virtual bandwagon to jump on just yet, but early adopters are beginning to accept digital alternative currency as payment in Maryland. And the list of those who are doing likewise appears to be growing. Various forms of virtual currency exist, including Dogecoin and Litecoin, but the open source, software-based online payment system known as Bitcoin is the one that has established itself as the mainstream favorite among users. Not surprisingly, many of Marylands cryptocurrency disciples are businesses that populate the data, communications and technology fields. However, a quick perusal of the www.coinmap.org web site, which publishes the locations of venues that accept Bitcoin, reveals that even some of the most basic retail operations, service providers and food and beverage establishments are giving it a go. Aggregating data available online through Coinmap and Bitpages, there were no fewer than 28 businesses within the state accepting Bitcoin in December, to include bookstores, restaurants, automotive service centers, clothing and jewelry retailers, and photographers. The vast majority could be found in Baltimore and elsewhere within the Baltimore-Washington Corridor. The biggest [advantage] for consumers is consumer protection, said Brent Hoffman, COO of Baltimore-based Bitsie, a business focused on promoting Bitcoins adoption by more retailers. Target gets hacked, and [hackers] take all your credit card information; that would never happen with Bitcoin. In a nutshell, Bitcoins are nothing more than ones and zeroes that exist in an online register, basically a shared public ledger that records transactions, which remain anonymous and carry no personally identifiable information. A computer process based on so Continue reading >>

Virtual Currency Law In The United States

Virtual Currency Law In The United States

Virtual currency law in the United States This article has multiple issues. Please help improve it or discuss these issues on the talk page . This article relies too much on references to primary sources . Please improve this by adding secondary or tertiary sources . This article is an orphan , as no other articles link to it . Please introduce links to this page from related articles ; try the Find link tool for suggestions. ( Learn how and when to remove this template message ) United States virtual currency law is the area of financial regulation that applies to the buyers, sellers, and users of virtual currency . This regulatory structure consist of tax regulations and FINCEN transparency regulations between financial exchanges and the individuals and corporations with whom they conduct business. The regulatory and market environment[ edit ] The Internal Revenue Service (I.R.S) describes Virtual Currencies (VC)s as a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value [and] does not have legal tender status in any jurisdiction. [1] Although, electronic payment systems have been part of American life since at least 1871 when Western Union introduced money transfer through the telegraph [2] and in 1914 introduced the first consumer charge-card," virtual currencies differ from these digital payment structures because unlike traditional digital transfers of value, virtual currencies do not represent a claim on value; rather the virtual currency are the value. The National Automated Clearing House Association (NACHA), through the Automated Clearing House (ACH) moves almost $39 trillion and 22 billion electronic financial transactions each year. [3] These electronic transfers of money through the ACH Network Continue reading >>

Bitcoin Regulation By State (updated 2017)

Bitcoin Regulation By State (updated 2017)

Bitcoin Regulation by State (Updated 2017) by Frederick Reese 4,632 Investors read this Bitcoin has changed the world. Prior to its invention, wealth was largely dependent on the economic health of a nation or the backing of physical assets. With bitcoin, a wealth can be expressed and transferred digitally. All the same, the United States has struggled with the question of the legality of bitcoin. Politician Ron Paul highlighted the controversy of the government legislating a decentralized currency when he said: I understand the political ramifications of [bitcoin], and I think that government should stay out of them and they should be perfectly legal. Not every legislator agrees with that assessment, however. Investors will do well to understand bitcoin legality and the state of bitcoin regulation in the United States in order to stay in compliance, to prevent forfeiture of their investment, and to avoid costly legal fees and penalties. On a national level, the Federal Reserve and the Internal Revenue Service have taken the following positions: Bitcoin and all altcoins, for that matter are not currency, but a taxable commodity akin to stocks . While individuals and businesses are free to use any private currency they wish to conduct business, bitcoin and altcoins are not recognized as legal tender. Similar to property, bitcoin earned for services rendered are taxed as income. Bitcoin paid for services rendered or to independent contractors must be reported on IRS Form 1099, with self-employment tax possibly being applicable. Finally, capital gain on altcoins is taxable, as gains would be in stocks and bonds. The government has taken a cautious position toward bitcoin money transmitters. Despite court decisions stating that bitcoin can be used as money, the Security an Continue reading >>

Advisory: Virtual Currencies: Risks For Buying, Selling, Transacting, And Investing - Advisory Notices - Commissioner Of Financial Regulation

Advisory: Virtual Currencies: Risks For Buying, Selling, Transacting, And Investing - Advisory Notices - Commissioner Of Financial Regulation

A copy of the order is available on the DLLR website (PDF document, 266KB, download Adobe Acrobat for free) . The increased interest in virtual currency and other payments innovations has led to the rapid emergence of different types of currencies and payments mechanisms. As these are released into the marketplace, it is important for consumers and investors to educate themselves with accurate information to make informed decisions about this innovative and evolving industry. Virtual currency is an electronic medium of exchange that does not have all the attributes of real currencies. Virtual currencies include cryptocurrencies, such as bitcoin and litecoin, which are not legal tender, and are not issued or backed by any central bank or governmental authority. Virtual currencies have legitimate purposes, and can be purchased, sold, and exchanged with other types of virtual currencies or real currencies like the U.S. dollar. This can happen through various mechanisms such as exchangers, administrators, or merchants that are willing to accept virtual currencies in lieu of real currency. Prior to buying, selling, transacting with, or investing in a virtual currency, residents should consider the following: Virtual currencies are volatile in value. Virtual currencies are not backed by a central bank and are highly volatile with the potential for complete loss of value. This volatility may affect investors, as well as consumers using virtual currencies as a means of payment. Additionally, virtual currency volatility may make securities offerings tied to these currencies unsuitable for most investors. Virtual currencies can be stolen or otherwise subject to loss. There is the potential for residents to incur financial losses if an account is not maintained in a secure manner Continue reading >>

State Regulations On Virtual Currency And Blockchain Technologies - Fin Tech - United States

State Regulations On Virtual Currency And Blockchain Technologies - Fin Tech - United States

As of this inaugural publication, there exists no uniformitywith respect to how businesses that deal in virtual currencies(also known as "cryptocurrencies") such as Bitcoin aretreated among the states. For these proprietors, often the firstquestion asked when deciding whether to operate within a state iswhether existing state money transmitter rules apply to the sale orexchange of virtual currencies. As you will see from the discussionbelow, most states have not yet enacted regulations that providesvirtual currency operators with any guidance on this question. Some states have issued guidance, opinion letters, or otherinformation from their financial regulatory agencies regardingwhether virtual currencies are "money" under existingstate rules, while others have enacted piecemeal legislationamending existing definitions to either specifically include orexclude digital currencies from the definition. To use a pun thosein the blockchain space should understand, there is a complete lackof consensus as to whether they do or not. The few states that have attempted to enact such comprehensiveregulations, including New York's much maligned"BitLicense" scheme, has resulted in a retreat by theindustry from either perceived overregulation or attempts by thestate to treat virtual currency operators identically withtraditional money transmitters that are better equipped to dealwith a restrictive, and in their case cost prohibitive, regulatoryframework. The authors of this article are hopeful that over the nextseveral years states will begin to craft regulation that balancesthe dual needs of protecting consumers from businesses operating inthe fledgling industry while also promoting continued innovation bynot saddling virtual currency businesses with regulatory burdensthat make it f Continue reading >>

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