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An act to amend Financial and Corporations Codes relating to digital currency

leginfo.legislature.ca.gov

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Re: An act to amend Financial and Corporations Codes relating to digital currency

#21

Post by trhway »

tn13 wrote: post #7
KeatonDunsford wrote: post #2

Can imagine this will be impossible to force with the rise of decentralized exchanges for BTC and ETH like Bitsquare and EtherEx. But still... "The bill would prohibit a person from engaging in the digital currency business without enrolling in the program and would prohibit the conduct of digital currency business through an unenrolled agent. The bill would require a person seeking enrollment to pay a nonrefundable…

Truly fuck this law. Not even sure how they are going to enforce this rubbish.

a law may be not completely enforceable in normal situation, yet it would still provide at least two things: 1. scaring away a bunch of would-be players and 2. once somebody got law enforcement attention even for non-related things the law may provide for additional charge and thus higher pressure and higher chances that something would finally stick.

Re: An act to amend Financial and Corporations Codes relating to digital currency

#23

Post by Animats »

Read "The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one"[1] on Quartz. They can't even find the company's offices. The Hong Kong address is a mail drop. The British Virgin Islands address is a mail drop. The CEO is missing. Looks a lot like an inside job.

Fingerprinting cryptocurrency company management is a good idea.

[1] http://qz.com/753958/the-65-million-bitfinex-hack-shows-that...

Re: An act to amend Financial and Corporations Codes relating to digital currency

#24

Post by mhluongo »

Animats wrote: post #23

Read "The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one"[1] on Quartz. They can't even find the company's offices. The Hong Kong address is a mail drop. The British Virgin Islands address is a mail drop. The CEO is missing. Looks a lot like an inside job. Fingerprinting cryptocurrency company management is a good idea. [1] http://qz.com/753958/the-65-million-bitfi…

How would this bill prevent that? I'd argue it wouldn't, because shenanigans like this aren't happening at US-run bitcoin companies.

We already have federal MSB regulations, and should solve this at the federal level. The proliferation of state MSB regulations make it incredibly expensive for new fintech companies to compete against incumbents and internationally.

Re: An act to amend Financial and Corporations Codes relating to digital currency

#25

Post by Hermel »

Animats wrote: post #23

Read "The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one"[1] on Quartz. They can't even find the company's offices. The Hong Kong address is a mail drop. The British Virgin Islands address is a mail drop. The CEO is missing. Looks a lot like an inside job. Fingerprinting cryptocurrency company management is a good idea. [1] http://qz.com/753958/the-65-million-bitfi…

As someone who has suffered a significant loss from the Bitfinex hack, I still prefer technical over regulatory solutions.

You should also note that Bitfinex used to have a much more secure setup, with most of its Bitcoins being stored in cold, offline storage. However, US regulation required them to use segregated accounts for each user. Under such a requirement, the cold storage variant does not work any more, so they moved to keep everything online so they could physically move the Bitcoins back and forth as they were used for margin loans within Bitfinex. It was too much misguided regulation that made them vulnerable in the first place.

Re: An act to amend Financial and Corporations Codes relating to digital currency

#26

Post by mhluongo »

Hermel wrote: post #25
Animats wrote: post #23

Read "The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one"[1] on Quartz. They can't even find the company's offices. The Hong Kong address is a mail drop. The British Virgin Islands address is a mail drop. The CEO is missing. Looks a lot like an inside job. Fingerprinting cryptocurrency company management is a good idea. [1] http://qz.com/753958/the-65-million-bitfi…

As someone who has suffered a significant loss from the Bitfinex hack, I still prefer technical over regulatory solutions. You should also note that Bitfinex used to have a much more secure setup, with most of its Bitcoins being stored in cold, offline storage. However, US regulation required them to use segregated accounts for each user. Under such a requirement, the cold storage variant does not work any more, so t…

I think the CFTC interference is overstated- BitFinex still could have segregated cold wallets for the whales, and I've heard they made the change primarily in response to the last hack.

I want the CFTC interference to be the primary issue, though- it certainly fits the narrative and would be a great lesson going forward.

Note: I also lost money on the hack.

Re: An act to amend Financial and Corporations Codes relating to digital currency

#27

Post by jsprogrammer »

dragonwriter wrote: post #11
r00fus wrote: post #3

So what constitutes a digital currency? I mean, I've heard arguments that BTC is really an asset being traded. Didn't see that Also: looks like proposed fee has been increased to $5000 from $500 (didn't look for other details). Amusing that legalese is essentially similar to code, but without variable declarations (ie, $digitalcurrency := "currency that's traded online, including but not restricted to BTC, etc") it's…

From the proposed law: “Digital currency” means any digital representation of value that can be digitally traded and is used to facilitate the sale, purchase, and exchange of goods, services, or other digital representations of value among its users. Digital currency does not include fiat currency, e-money, or currency value of which was fixed by its issuer to the value of a fiat currency.

Missing is a definition of what "value" is.

My Bitcoin is a digital representation of the bits needed to solve a particular block. It doesn't represent value, but a numerical solution to a mathematical problem.

Re: An act to amend Financial and Corporations Codes relating to digital currency

#28

Post by rnbrady »

Animats wrote: post #23

Read "The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one"[1] on Quartz. They can't even find the company's offices. The Hong Kong address is a mail drop. The British Virgin Islands address is a mail drop. The CEO is missing. Looks a lot like an inside job. Fingerprinting cryptocurrency company management is a good idea. [1] http://qz.com/753958/the-65-million-bitfi…

I never struggled to tell Coinbase from Bitfinex. Coinbase has top tier investors. Insured deposits. Multisig.

And I got out of Mt. Gox way before it hit the wall because it lacked any similar re-assurances.

Impossible? Hardly. You can count the good ones on your fingers and they are not hard to spot.

Re: An act to amend Financial and Corporations Codes relating to digital currency

#29

Post by dogecoinbase »

jsprogrammer wrote: post #27
dragonwriter wrote: post #11

Earlier quoted context omitted.

From the proposed law: “Digital currency” means any digital representation of value that can be digitally traded and is used to facilitate the sale, purchase, and exchange of goods, services, or other digital representations of value among its users. Digital currency does not include fiat currency, e-money, or currency value of which was fixed by its issuer to the value of a fiat currency.

Missing is a definition of what "value" is. My Bitcoin is a digital representation of the bits needed to solve a particular block. It doesn't represent value, but a numerical solution to a mathematical problem.

Playing dumb only makes you look dumb. Judges/legislators/basically everyone can see right through this kind of pretense and aren't particularly sympathetic to the "b...but I'm technically correct!" stance.

Re: An act to amend Financial and Corporations Codes relating to digital currency

#30

Post by shepardrtc »

jsprogrammer wrote: post #27
dragonwriter wrote: post #11

Earlier quoted context omitted.

From the proposed law: “Digital currency” means any digital representation of value that can be digitally traded and is used to facilitate the sale, purchase, and exchange of goods, services, or other digital representations of value among its users. Digital currency does not include fiat currency, e-money, or currency value of which was fixed by its issuer to the value of a fiat currency.

Missing is a definition of what "value" is. My Bitcoin is a digital representation of the bits needed to solve a particular block. It doesn't represent value, but a numerical solution to a mathematical problem.

It represents the resource and infrastructure investment needed to calculate the solution to a block. The resource being electricity, and the infrastructure being the computer and any peripherals needed (i.e. expensive video card).
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