The bitcoins will be sold, but they haven't said precisely how that will happen. Since there is no bitcoin exchange that is properly legally licensed in the US, they will likely auction them off directly, like seized property.
The bitcoins, if you're interested, are sitting in two very large wallets: one with ~144K bitcoins (~US$117.6M right now) and ...
No, the fincen guidance you posted has it in plain english that you do not. A miner is simply a user.
c. De-Centralized Virtual Currencies
A final type of convertible virtual currency activity involves a
de-centralized convertible virtual currency (1) that has no central
repository and no single administrator, and (2) that persons may obtain
In the ECB's view, (Bitcoin) can be used by business (criminals), customers (fraudsters) and savers (money launderers) to perform legal (illegal) activities, but lets ignore it until volume reaches a level where comparison with sovereign currencies reflects negatively on our reputation. The public will then expect us to regulate such digital (rogue) systems ...
The trade of cryptocurrencies for other cryptocurrencies is not regulated in the United States under FinCEN guidance or IRS guidance, as of August 12th, 2014
Cryptocurrencies are designated as property under IRS guidance, and property generally enjoys like-kind treatment to defer capital gains until that property is exchanged for US Dollars (or other fiat ...
All services that deal also with fiat money, apart from cryptocurrencies, must comply with specific AML (Anti Money Laundering) and KYC (Know your customer) rules, which can be more strict depending on their jurisdiction.
AML/KYC Explained: https://bitcointalk.org/index.php?topic=454795.0
Businesses in the Bitcoin space face no special challenges to implement KYC regulation, except the privacy oriented mindset special to some bitcoin users. However, it is impractical to enforce KYC regulation on the entirety of the bitcoin network itself.
Long version below
Know Your Customer (KYC) regulation applies to financial institutions and ...
There's actually a lot going on in the California state legislature regarding virtual currency regulation, and you may soon need a specific license from them (although the bill in question---AB1326---still needs to pass). You can read a little more about it here from CoinCenter.
Until that particular bill passes, it's a bit of a gray area, but it would be ...
I recently co-authored an article that contains some background information to your question. William B. Fleming and Joseph Evans, Bitcoiners in the Courtroom Part I: Government Oversight, Ford. Corp. L. Forum (Aug. 20, 2013)
Bitcoiners in the Courtroom: Government Oversight (PDF)
Bitcoiners in the Courtroom: Government Oversight (TXT)
Tradehill got shutdown because it went bankrupt when Dwolla started reversing money transfers made to them despite their terms of service stating that no chargebacks could occur (at the time). There is currently a lawsuit pending.
The required licenses will vary depending on the legal context and the interpretation of the business, made by the relevant ...
That's not a very secure system.
You should set up a 1-of-2 multisig address with the user instead and have them send funds to that address. They're still placing a lot of trust in you but they don't have to expose their private key.
As far as your original question goes: I don't think so since they're still technically in control of their funds (just you ...
The ECB is a monopolistic institution: it holds a monopoly over the issuing of money on Europe. As a byproduct, any possible competitor is going to A) Be detained and its activity stopped B) Be criminalized or C) Be condemned. Since technology makes impossible to Government to take over Bitcoin, you can expect (C) for a long, long time.
If Bitcoin gets ...
Maybe - check with a lawyer
You don't have to register if
You use a website (MtGox or Coinlab) to buy coins
You use coins to buy "stuff" (Namecheap, alpaca socks, etc)
You might have to register if:
You run a wallet hosting company
The FINCen law requires people to register if they
Are a mixing service
Participate in the Bitcoin OTC market and issue ...
The answer for @jtorba is not strictly correct.
Difficulty is the main control mechanism used to determine the amount of Bitcoins released over time. The amount of bitcoins released is according to the bitcoin era as defined here
Currently the system tries to maintain a release of bitcoins every 10 minutes - which is part of the config settings that all ...
Great Britian is a country that many companies moved their bitcoin related business to. One of the the best countries that respect privacy is Switzerland.
There are some tax-heaven type countries that have pro-bitcoin policies.
If you count it toward country Liberland is probably most friendly.
In this article you can find various contries with an ...
Therefore, those who managed to buy it early and sell it in time, get profits.
Actually, they don't. For three reasons:
To execute a pump & dump, you have to keep buying even after the price has risen above the price it would have if you were not buying. That means you have to buy high. Buying high is not part of any profitable strategy I know of.
Legality depends largely on jurisdiction, and you didn't specify one. In addition, the regulation of cryptocurrencies is constantly in flux, and even in a given jurisdiction it's difficult to say which laws apply to them and which don't. It also may be in question whether fiat money is involved, or are these scammers selling their altcoins for bitcoin.
They can't entirely ban trading for all of their citizens worldwide, but a government can ban trading within the country itself. This means that it will be much harder for people to trade and thus drastically reduce the number of people within the country that are trading.
However while you can trade anonymously, any earnings made from trading are usually ...
Main laws that they do have to comply with are Money Laundering and Terrorist Financing and "Know Your Customer" type rules.
This is why when you open an account you have to send ID etc.. These they are forced to comply with as the banks that serve them (remember you have to wire them the USD EUR etc.. somehow - and that is through a bank with whom they ...
TL;DR: Bitcoin has been declared a legal form of payment which is not the same as an official currency.
I think that it may not be clear what a "legal form of payment" means and how this differs from the official currency of a country.
"Currency" usually refers to a form of money issued by a government, which makes "cryptocurrency" a misnomer to some ...
If you receive 500 EUR as a payment, how do you declare it?
Easy, you declare it as however much GBP it was at the time. If you receive it as a wire transfer your bank will even make this conversion for you!
So with BTC if you receive 2.5 BTC you have to see what the GBP value is and declare that as your receipts, and pay VAT and whatever other taxes on it....
My thinking is that (i) G20 nations are democracies, and (ii) Bitcoin is a useful service. If it's useful to people, and people want it, they'll vote for it and it won't get banned.
If your country bans something useful to the masses, it's not a democracy. It will be banned only because it lost its utility, and if that happens, there will probably be ...
Illegal exchange flourishes wherever exchange is forbidden.
Legal exchange operates to the degree and magnitude of effective enforcement of the ban.
Tracking goods & services trade paid in a cryptocurrency would be difficult, so trade would be the only way in an area that effectively restricts a cryptocurrency's trade with other currencies.
There's basically no way to answer this in a way that's general to countries that forbid foreign exchange, because these regulations have different goals in different countries.
For example, in Venezuela, all foreign exchanges must go through a state bank. The purpose of this is so that they can pretend that their currency is worth more than it actually is. ...
According to eBay's Stamps, Currency and Coins Policy:
Virtual currency must be listed in the Classified Ad format in the Coins & Paper Money > Virtual Currency category. These requirements apply regardless of whether the virtual currency is digitally or physically delivered. Examples of items subject to this policy include Bitcoins, Litecoins and ...
There are several groups which may be able to impose regulatory control of the Bitcoin economy. Bitcoin can be subject to regulations from several branches of government:
IRS - Considers bitcoin property and does not require reporting for spending sums under $600. http://online.wsj.com/news/articles/SB10001424052702303949704579461502538024502
FinCEN - ...
Kraken also known as Payward Ventures Inc is currently registered as a Money Service Business in every single state in the US.
As far as I can tell however they will still not do business for the 2nd 3rd or 4th tier verifications in any state. I have no idea why this is.
The short answer is, it is complicated. Below are some resources that may helpful.
As a disclaimer none of the below statements constitute legal advice and they should not be relied on.
I recently co-authored an article that contains some background information to your question. William B. Fleming and Joseph Evans, Bitcoiners in the Courtroom Part I: ...