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FINCEN and the Legality of Creating Bitcoins in the USA

FINCEN on the Legality and Classification of Creating Bitcoins in the USA

Bitcoin mining company Milly Bitcoin asked for a ruling from FINCEN regarding whether or not companies which mine bitcoin will be legally classified as money transmission services. FINCEN responded “Activities that, in and of themselves, do not constitute accepting and transmitting currency, funds or the value of funds, are activities that do not fit within the definition of money transmission services and therefore are not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs” They went on to confirm that “To the extent that a user mines Bitcoin and uses the Bitcoin solely for the user’s own purposes and not for the benefit of another, the user is not an MSB under FinCEN’s regulations, because these activities involve neither “acceptance” nor “transmission” of the convertible virtual currency and are not the transmission of funds within the meaning of the Rule.”

This is good news for Bitcoin miners, and is a sign that FINCEN is adopting a moderate regulatory position on Bitcoin transactions which targets illegal uses of Bitcoin such as money laundering, but which does not consider the creation of the currency itself to be a crime. The creation of cryptocurrencies is technically illegal and could be prosecuted under title 18 U.S.C. 336, Sec. 336. which states “Whoever makes, issues, circulates, or pays out any note, check, memorandum, token, or other obligation for a less sum than $1, intended to circulate as money or to be received or used in lieu of lawful money of the United States, shall be fined under this title or imprisoned not more than six months, or both.” However, this statute hasn’t been enforced in a published court opinion since 1899, a good sign for the budding currency.

Read more:
http://cointext.com/fincen-issues-bitcoin-friendly-ruling-for-miners/

http://www.communitycurrencieslaw.org/currency-laws/

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