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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

#51

Post by mmanfrin »

The MTA was previously used against companies that simply facilitated marketplaces. I worked for a mobile-ordering startup called GoPago that got hit with a suit over the MTA since we were 'storing currency' (i.e., people paid us money for food that we would then pass on to the merchant that made the food). The only way of getting approval for 'money transfer' was to get a 'Medallion' which took around 18 months.

The MTA was awful, and this appears to be gutting the parts that was applicable to its overreach.

I see a lot of negativity in this comment section about the changes, as CA is moving to change the law to be used to regulate digital currencies which I believe was the original intent of the MTA (not specifically digital currencies, but anything fiat used as currency).

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

#52

Post by __jal »

djrogers wrote: post #19
verisimilidude wrote: post #18

Earlier quoted context omitted.

For my part, the wording in #1 looks especially flimsy. What the hell does "nominal" mean? Is "nominal" measured against some absolute dollar value, or against the scope of the task/services rendered? It's not hard to imagine some massive smart contract transactions that would require a lot of resources to perform, but which wouldn't otherwise have any financial purpose. Would those be deemed too costly, not nominall…

It's vague on purpose, as vagueness gives the appointed bureaucrats more power in their rule-making processes. Strict, detailed laws don't give them any extra leeway to make rules that favor rent-seekers and friends.

That's one view. Another is that strict, detailed laws without human judgement inevitably creates absurd results.

Law doesn't work without room for judgement. Enforce rules designed for toy models of reality[1] and people won't respect the law, but rather fear the lash. Of course, a certain type of person likes that, but (presumably) those who want to live in democracies don't.

[1] I'd love to believe that someday, certain economists would figure this out, too.

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

#53

Post by jsprogrammer »

dragonwriter wrote: post #49
jsprogrammer wrote: post #27

Earlier quoted context omitted.

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.

> Missing is a definition of what "value" is. Laws typically don't incorporate definitions of words used when they aren't used in a special sense in the law. > My Bitcoin is a digital representation of the bits needed to solve a particular block. No doubt. > It doesn't represent value, The "X needed for Y" have value to the extent Y has value; I would suggest that there is considerable evidence which might be marshal…

The word is very special to this law as it is the core word defining "Digital Currency":

>“Digital currency” means any digital representation of value

You can't classify something as digital currency without knowing what value means or how to measure it.

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

#54

Post by dragonwriter »

jsprogrammer wrote: post #53
dragonwriter wrote: post #49

Earlier quoted context omitted.

> Missing is a definition of what "value" is. Laws typically don't incorporate definitions of words used when they aren't used in a special sense in the law. > My Bitcoin is a digital representation of the bits needed to solve a particular block. No doubt. > It doesn't represent value, The "X needed for Y" have value to the extent Y has value; I would suggest that there is considerable evidence which might be marshal…

The word is very special to this law as it is the core word defining "Digital Currency": >“Digital currency” means any digital representation of value You can't classify something as digital currency without knowing what value means or how to measure it.

> The word is very special to this law as it is the core word defining "Digital Currency":

It may be important to this law, but that doesn't mean that it is used specially (as in, in any but its most contextually-obvious general-use sense) in the law.

I mean, the meaning of "is" is also very important to the meaning of most laws, but is rarely defined in the enactment.

> You can't classify something as digital currency without knowing what value means

True, but that doesn't take a non-standard, law-specific definition.

> or how to measure it.

Untrue -- quantification of value is not relevant to the definition.

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

#55

Post by tzs »

verisimilidude wrote: post #12

Some meat from page 30 about the definition of "digital currency business" for the purposes of this act... (d) “Digital currency business” means the business of offering or providing the service of storing, transmitting, exchanging, or issuing digital currency. “Digital currency business” does not include the following: (1) Transmission of digital currency where the transaction is undertaken for non financial purpose…

The exclusion from being a digital currency business for online games,

> (2) Online games or gaming platforms that use digital currency that (A) have no market or application outside of those games or gaming platforms, (B) cannot be converted into, or redeemed for, fiat currency or digital currency, and (C) are not redeemable for real-world goods, services, discounts, or purchases.

raises a question. First note that the three qualifying conditions are joined by AND, not OR, so it seems a game must satisfy all three to escape being a digital currency business.

For (A), "have no market or application outside of those games or gaming platforms", is that limited to official markets? Many an MMORPG has tried to keep their game currency game only, going so far as to ban accounts that are caught trading game currency for outside currency, but nevertheless markets outside the game for their currencies have invariably arisen. If unofficial markets are sufficient, I wonder if any significant game will be able to qualify for the exclusion.

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

#56

Post by jsprogrammer »

dragonwriter wrote: post #54
jsprogrammer wrote: post #53

Earlier quoted context omitted.

The word is very special to this law as it is the core word defining "Digital Currency": >“Digital currency” means any digital representation of value You can't classify something as digital currency without knowing what value means or how to measure it.

> The word is very special to this law as it is the core word defining "Digital Currency": It may be important to this law, but that doesn't mean that it is used specially (as in, in any but its most contextually-obvious general-use sense) in the law. I mean, the meaning of "is" is also very important to the meaning of most laws, but is rarely defined in the enactment. > You can't classify something as digital curren…

If you show me a method of quantification, I can derive the definition.

Value is being discussed (even though you appear to be using an unrevealed definition) as a quantity (maybe, I am wrong, and it is not a quantity), which means there must be a way to quantify it.

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

#57

Post by lijason »

r00fus wrote: post #48
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.

So do things like Microsoft points or rewards work the same way? What about stocks/bonds? I find it amusing that the exempt e-money while targeting "digital currency". What exactly is the distinction?

>I find it amusing that the exempt e-money while targeting "digital currency".

I think this is because financial institutions dealing with fiat currencies already have significant regulations that is not intended to apply to.

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

#58

Post by lijason »

erdevs wrote: post #16

Whether it's this bill or not, this kind of legislation is inevitable, isn't it?

Yeah, I don't really understand the anger about this. Financial institutions already have significant regulations. It's not clear to me why the digital currency equivalent institutions shouldn't be treated similarly. If the only argument for digital currency is lack of regulation, it seems that people should be pushing for decreased regulation on financial institutions instead. An end-around regulation just because we're using digital currency as the go-between doesn't seem to make a lot of sense.

Big caveat, I haven't read this bill or about this bill enough to know if it goes significantly beyond the regulations for financial institutions. If so, clearly, that's different.

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

#59

Post by comex »

jsprogrammer wrote: post #53
dragonwriter wrote: post #49

Earlier quoted context omitted.

> Missing is a definition of what "value" is. Laws typically don't incorporate definitions of words used when they aren't used in a special sense in the law. > My Bitcoin is a digital representation of the bits needed to solve a particular block. No doubt. > It doesn't represent value, The "X needed for Y" have value to the extent Y has value; I would suggest that there is considerable evidence which might be marshal…

The word is very special to this law as it is the core word defining "Digital Currency": >“Digital currency” means any digital representation of value You can't classify something as digital currency without knowing what value means or how to measure it.

Are you seriously trying to argue that Bitcoin is not a representation of value, or are you merely suggesting that there might be more ambiguous cases?

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

#60

Post by jsprogrammer »

comex wrote: post #59
jsprogrammer wrote: post #53

Earlier quoted context omitted.

The word is very special to this law as it is the core word defining "Digital Currency": >“Digital currency” means any digital representation of value You can't classify something as digital currency without knowing what value means or how to measure it.

Are you seriously trying to argue that Bitcoin is not a representation of value, or are you merely suggesting that there might be more ambiguous cases?

I'm saying my coins were mined and only represent a solution to a vey specific problem.

For someone to claim that the numbers I hold represent something else, is an error.

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