Jacob S. Farber

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In a surprise move, Overstock.com just went live with its acceptance of Bitcoin.  The company had announced in December that it planned to start taking bitcoins sometime in the first half of 2014, but hadn’t given any indication that it would do so this early in the new year.  According to Wired, Overstock.com struck a deal with Coinbase for the processing of Bitcoin payments last Tuesday and has been working around the clock since to prepare to go live.
Continue Reading Overstock.com Becomes Largest U.S. Retailer to Take Bitcoin

It appears that FinCEN has, at least to some extent, clarified the status of Bitcoin miners as Money Service Businesses (MSBs) under the federal Bank Secrecy Act (BSA).  Cointext.com has posted the text of an unpublished administrative ruling from FinCEN responding to a request for clarification filed by Atlantic City Bitcoin LLC in June of this year.  While we have not yet been able to confirm it with FinCEN, the ruling appears to be genuine.  According to the text of the ruling posted on Cointext.com, Atlantic City Bitcoin would not be engaged in money transmission (and thus required to register with FinCEN as an MSB) if it (1) uses mined bitcoins to purchase goods or services from, or pay debts due to, others on its own behalf, (2) converts mined bitcoins into legal tender or other virtual currencies, or (3) transfers mined bitcoins to its owners.
Continue Reading FinCEN Appears to Clarify Status of Bitcoin Miners in Unpublished Ruling

In a press release this week, the Royal Bank of India (RBI) echoed recent comments from European regulators about the risks associated with virtual currencies and also said it is “presently examining the issues associated with the usage, holding and trading or [virtual currencies] under the extant legal and regulatory framework of the country,” suggesting that the press release is not the last word on this issue from the RBI.
Continue Reading India Joins the “We’re Not So Sure About this Bitcoin Thing” Chorus

The Financial Crimes Enforcement Network, or FinCEN—the Treasury Department agency that oversees anti-money laundering efforts—has recently sent letters to several Bitcoin-related businesses saying that they may be engaging in money transmission without being registered with FinCEN.  Under FinCEN’s regulations, any entity engaging in money transmission must register as a “money service business,” or face potentially severe civil and criminal penalties. 
Continue Reading FinCEN’s Bitcoin Letter-writing Campaign

There is more news from China today as the clampdown on Bitcoin continues.  BTC China, the largest Bitcoin exchange in China — and the world — has announced it has stopped accepting deposits in yuan.  Existing yuan balances remain available, and deposits in Bitcoin are unaffected.  There also appears to be no suspension of withdrawals of yuan, although that will apparently change by January 31, 2014.
Continue Reading China Continues Clampdown on Bitcoin

With this weeks’ news out of Denmark, European regulators continue to clarify their positions on Bitcoin and other virtual currencies. Two themes are emerging. First, regulators are warning consumers to proceed with caution, given the perceived risks posed by virtual currencies. Second, at least three European countries have now said that virtual currency does not fall within the regulatory definition of currency or money, and that it is instead an asset, meaning that gains from buying and selling virtual currency are taxable.
Continue Reading European Regulators Focus on Virtual Currency Risks and Classification

The Federal Election Commission (FEC) has been asked to issue an advisory opinion regarding whether bitcoins may be accepted as political contributions and, if so, whether they should be categorized as “monetary” or “in-kind” contributions under currently existing federal election law.
Continue Reading Federal Election Commission Seeks Public Comment on the Use of Bitcoins As Political Contributions

In response to the SEC’s first civil complaint arising from online virtual currency trading,[1] alleged Bitcoin Ponzi schemer Trendon Shavers recently challenged the district court’s authority to hear the case. Shavers argued that the Bitcoin-related investments he solicited through his company, Bitcoin Savings and Trust, did not constitute “securities” as defined under the federal…