News Roundup - FinCEN's Guidance Re: Virtual Currencies

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Dept. of Treasury, issued its first guidance brief for 2013 Monday and it addresses the Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies.

First the good news:

A person’s acceptance and/or transmission of convertible virtual currency cannot be characterized as providing or selling prepaid access because prepaid access is limited to real currencies.

Bitcoin is not a debt instrument nor is there any “backing” by a commodity or some promise that it can be be redeemed for value.  Therefore it is not being recognized as a “real currency” by FinCEN.  This helps Bitcoin avoid the regulations that specifically apply to “prepaid access” (formerly referred to as “stored value”) products.

More good news:

A user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN’s regulations.

This means a holder of bitcoins can spend those funds without any MSB registration requirement or reporting concerns regarding money transmission.

From there the guidance starts to get murky, or Murcky.  Bitcoin Foundation’s general counsel posts his interpretation:

• Patrick Murck: https://bitcoinfoundation.org/blog/?p=152

Following is the list of articles on this development: 

• Payments Source (Bailey Reutzel): http://bit.ly/ZQP5Wg
• Bitcoin Magazine (Vitalik Buterin): http://bit.ly/148nx5M
• FreeBanking.org (Bradley Jansen): http://bit.ly/ZqSXj1
• BLOGDIAL: http://irdial.com/blogdial/?p=3488
• TheNextWeb.com (Jon Russel): http://tnw.co/WBP2zW
• Ars Technica (Timothy B. Lee): http://ars.to/XX0FT9
• Forbes.com (Timothy B. Lee): http://onforb.es/YpshNb
• http://bitcointalk.org/index.php?topic=154672.0 (Forum post: FinCEN addresses Bitcoin)
• http://bitcointalk.org/index.php?topic=154754.0 (Forum post: I am a / “AMLCA”)
• http://1.usa.gov/117bnWj (FinCEN FIN-2013-G001)
• National Journal (Brian Fung): http://bit.ly/YIItbA
• Wall Street Journal (Jeffrey Sparshott): http://on.wsj.com/Z4rF1T

Further articles will be added to the list as they are discovered.  Feel free to post a replly with any that were missed.

Previous Posts - Twitter: @BitcoinMoney