Category Archives: money transmitter

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Makeshift Magazine – Hawala, Moving Billions

Makeshift Magazine – Hawala, Moving Billions:

Writer Philippa Young (@_philippayoung_)’s article Thin Wire in the quarterly magazine Makeshift (@MkShftMag) describes Hawala.  Excerpts:

“Hawala, hundi, chiti, chop, and dozens of other names describe a system that moves billions of dollars across grey and black markets, faster and cheaper than your local bank.”

“Before insurance and high-speed travel, moving large amounts of bullion by sea or camel-led caravan was not only slow but also incredibly risky. The answer? Never move the money.”

“In its infancy, hawala created a safe and smooth journey for long-distance merchants, facilitating the first movements of globalized trade. Fast-forward a few hundred years, and hawala has a less celebrated reputation.”

“For families in developing countries supported by diaspora relatives, hawala is a lifeline.”

“Hawala is recordless. With just a name and telephone number, you can transfer thousands of dollars across continents.”

“Just one month from now, First Somali Bank will launch a system to allow diaspora communities of Minnesota and London to send remittances from their mobile phones directly to a recipient’s debit card in Somalia— signs of attempts to formalize hawala’s informal success.”

“The system differs from neighboring Kenya’s M-PESA system in that the money goes directly into the recipient’s bank account. Each person becomes his or her own hawaladar.”

“If money makes the world go round, then hawala is the undervalued engine coughing out a cloak of grey-black smoke.”

 – http://mkshft.org/2013/07/thin-wire
 – http://bitcointalk.org/index.php?topic=248744.0 (Further discussion of the article)

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CoinDesk – State of California's "Spray And Pray" Hits Bitcoin Foundation

CoinDesk – State of California’s “Spray And Pray” Hits Bitcoin Foundation:

Reporter Danny Bradbury (@DannyBradbury) of CoinDesk.com (@CoinDesk) describes the cease and desist (C&D) order given by the State of California’s financial regulator, Department of Financial Institutions (@CaliforniaDFI), to the Bitcoin Foundation (@BTCFoundation).  Excerpts:

“The letter said that the Bitcoin Foundation may be a money transmission business (MTB), and threatened it with fines and jail time.”

“The letter, signed by Paul Clayton, senior counsel at the Department of Financial Institutions (California’s financial regulator), gave the Foundation 20 days to respond, although it was only received last week. The Foundation is drafting its response with legal firm Perkins Coie this week.”

“The language in the letter (which didn’t directly accuse the Foundation, but suggested it ‘might be’ an MTB), indicated that the letter might be a fishing expedition said [Bitcoin Foundation General Counsel Patrick Murck]. The use of cease and desist letters is an easy way to cast the net, he argued.”

“This ‘spray and pray’ approach to regulating businesses could dampen the prospects for bitcoin-based businesses in the long run, warned Murck.”

 – http://bit.ly/1ccDgjE
 – http://bit.ly/14rPvGt (Cease and desist order)
 – http://bitcointalk.org/index.php?topic=241626.0 (Further discussion of this article)

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CoinDesk – State of California's "Spray And Pray" Hits Bitcoin Foundation

CoinDesk – State of California’s “Spray And Pray” Hits Bitcoin Foundation:

Reporter Danny Bradbury (@DannyBradbury) of CoinDesk.com (@CoinDesk) describes the cease and desist (C&D) order given by the State of California’s financial regulator, Department of Financial Institutions (@CaliforniaDFI), to the Bitcoin Foundation (@BTCFoundation).  Excerpts:

“The letter said that the Bitcoin Foundation may be a money transmission business (MTB), and threatened it with fines and jail time.”

“The letter, signed by Paul Clayton, senior counsel at the Department of Financial Institutions (California’s financial regulator), gave the Foundation 20 days to respond, although it was only received last week. The Foundation is drafting its response with legal firm Perkins Coie this week.”

“The language in the letter (which didn’t directly accuse the Foundation, but suggested it ‘might be’ an MTB), indicated that the letter might be a fishing expedition said [Bitcoin Foundation General Counsel Patrick Murck]. The use of cease and desist letters is an easy way to cast the net, he argued.”

“This ‘spray and pray’ approach to regulating businesses could dampen the prospects for bitcoin-based businesses in the long run, warned Murck.”

 – http://bit.ly/1ccDgjE
 – http://bit.ly/14rPvGt (Cease and desist order)
 – http://bitcointalk.org/index.php?topic=241626.0 (Further discussion of this article)

All News – Daily E-mail Subscription – Twitter: @BitcoinNews