Bitcoin Foundation's Response to California Cease & Desist
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Re: Bitcoin Foundation's Response to California Cease & Desist
#2May I say how much I appreciate you linking to the actual document expounding the legal argument, instead of some blog post attempting to summarize it.
Re: Bitcoin Foundation's Response to California Cease & Desist
#3May I say how much I appreciate you linking to the actual document expounding the legal argument, instead of some blog post attempting to summarize it.
I agree, but for anyone who wants the summary:
The Bitcoin Foundation is not in the business of selling bitcoin to consumers and does not otherwise operate a bitcoin exchange. Even if it did sell bitcoin to consumers, however, the Foundation believes it would not be regulated as a seller or issuer of payment instruments because a bitcoin is not a payment instrument under California law.
Re: Bitcoin Foundation's Response to California Cease & Desist
#4May I say how much I appreciate you linking to the actual document expounding the legal argument, instead of some blog post attempting to summarize it.
I agree, but for anyone who wants the summary: The Bitcoin Foundation is not in the business of selling bitcoin to consumers and does not otherwise operate a bitcoin exchange. Even if it did sell bitcoin to consumers, however, the Foundation believes it would not be regulated as a seller or issuer of payment instruments because a bitcoin is not a payment instrument under California law.
Indeed, but either the DFI knew this, in which case the threat was malicious, or they didn't know this, and the threat was incompetent. Either way, it's not a good position to start from.
Re: Bitcoin Foundation's Response to California Cease & Desist
#5It's nice to see they defend Bitcoin itself as well as themselves. But then this nice thing might happen that governments can do when they're said to be unjustified in a request: they just change the law and then close you down instead of warn. Might be interesting to try and see them seize Bitcoin itself, but the Bitcoin Foundation is a legal entity that _can_ be shut down.
Re: Bitcoin Foundation's Response to California Cease & Desist
#6May I say how much I appreciate you linking to the actual document expounding the legal argument, instead of some blog post attempting to summarize it.
I agree, but for anyone who wants the summary: The Bitcoin Foundation is not in the business of selling bitcoin to consumers and does not otherwise operate a bitcoin exchange. Even if it did sell bitcoin to consumers, however, the Foundation believes it would not be regulated as a seller or issuer of payment instruments because a bitcoin is not a payment instrument under California law.
I don't mean to offend, but this is what is wrong with the typical tl;dr summary; you've excerpted a core part of the argument, but you haven't explained the assertion made therein. To follow on (in my own words):
As Bitcoin is a separate currency from the USD, the kind of transactions that Bitcoin Foundation members are engaged in are in effect foreign exchange (forex) transactions, and Forex is not considered subject to money transmission regulations by the state of California.
I'm not sure I buy this argument, but haven't studied the legal background enough to form a proper opinion yet. the reason I was so pleased to see a link to a document with primary sources is that it makes it a lot easier to research the arguments therein, inviting good-faith attempts at falsification.
Re: Bitcoin Foundation's Response to California Cease & Desist
#7Earlier quoted context omitted.
I agree, but for anyone who wants the summary: The Bitcoin Foundation is not in the business of selling bitcoin to consumers and does not otherwise operate a bitcoin exchange. Even if it did sell bitcoin to consumers, however, the Foundation believes it would not be regulated as a seller or issuer of payment instruments because a bitcoin is not a payment instrument under California law.
Indeed, but either the DFI knew this, in which case the threat was malicious, or they didn't know this, and the threat was incompetent. Either way, it's not a good position to start from.
There's a third possibility, which is that the BF argument is flawed and the DFI is actually correct.
I'm not at all sure about this and have yet to check, but I have my doubts about whether BTC/$ exchange can truly be called a Foreign Exchange transaction as BTW are not issued by a sovereign entity and thus may not be considered a Foreign Currency for the purposes of this law.
Re: Bitcoin Foundation's Response to California Cease & Desist
#8May I say how much I appreciate you linking to the actual document expounding the legal argument, instead of some blog post attempting to summarize it.
I agree, but for anyone who wants the summary: The Bitcoin Foundation is not in the business of selling bitcoin to consumers and does not otherwise operate a bitcoin exchange. Even if it did sell bitcoin to consumers, however, the Foundation believes it would not be regulated as a seller or issuer of payment instruments because a bitcoin is not a payment instrument under California law.
For those too lazy to read ukoto's post, here's the TL;DR summary:
We don't sell bitcoin; not like it matters anyways.
If that was too long, here's the TL;DR of the Bitcoin Foundation's response to California's Department of Financial Institutions:
You're wrong.
Of course, my point is that if someone is actually interested in bitcoin and learning the legal arguments behind it, don't waste your time with incomplete summaries; just read the actual letter. It only takes a few minutes.
Re: Bitcoin Foundation's Response to California Cease & Desist
#9Earlier quoted context omitted.
I agree, but for anyone who wants the summary: The Bitcoin Foundation is not in the business of selling bitcoin to consumers and does not otherwise operate a bitcoin exchange. Even if it did sell bitcoin to consumers, however, the Foundation believes it would not be regulated as a seller or issuer of payment instruments because a bitcoin is not a payment instrument under California law.
I don't mean to offend, but this is what is wrong with the typical tl;dr summary; you've excerpted a core part of the argument, but you haven't explained the assertion made therein. To follow on (in my own words): As Bitcoin is a separate currency from the USD, the kind of transactions that Bitcoin Foundation members are engaged in are in effect foreign exchange (forex) transactions, and Forex is not considered subje…
Hmmmm, I wonder how strategic this claim is?
Perhaps they're just waiting for the state of California to declare in a legally binding way that Bitcoin is not a "separate currency from the USD". That'd be something a _lot_ of people would love to be able to promote and quote prominently…
Re: Bitcoin Foundation's Response to California Cease & Desist
#10Earlier quoted context omitted.
Indeed, but either the DFI knew this, in which case the threat was malicious, or they didn't know this, and the threat was incompetent. Either way, it's not a good position to start from.
There's a third possibility, which is that the BF argument is flawed and the DFI is actually correct. I'm not at all sure about this and have yet to check, but I have my doubts about whether BTC/$ exchange can truly be called a Foreign Exchange transaction as BTW are not issued by a sovereign entity and thus may not be considered a Foreign Currency for the purposes of this law.
They're still wrong because the foundation is not an exchange in the first place.