Category Archives: sec

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Marco Santori – Bitcoin Law In The U.S., Part I

Marco Santori – Bitcoin Law In The U.S., Part I:

Marco Santori, Chairman of Bitcoin Foundation (@BTCFoundation)’s Regulatory Affairs Committee, gives a basic primer on the state of US law as it applies to digital currency entrepreneurs.  Excerpts of the post on Coindesk:

If the last few months have taught us anything, it is that there will soon exist a new and evolving body of law: The Law of Digital Currency, or, as some would prefer it: Bitcoin Law.”

”[…] ‘virtual currency’ is something of a loaded term, and bitcoin may not even be best described as a currency at all.”

“[In addition to regulators FinCEN and the SEC, the] consensus among legal professionals is that two more government agencies might soon have a hand in the market as well: the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB).”

“Some have called [FinCEN’s issuance of guidance] bitcoin’s ‘watershed moment’ because of its clear, unequivocal positive message: bitcoin is not illegal. The negative consequence, though, was just as obvious: Many bitcoin businesses models are illegal.”

“In effect, the [Bank Secrecy Act (BSA)] deputizes financial institutions, requiring them to act as the government’s foot soldiers in its war on money laundering.”

 – http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know
 – http://bitcointalk.org/index.php?topic=276614.0 (Further discussion of the article)

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Kashmir Hill – Federal Judge Rules Bitcoin Is Real Money

Kashmir Hill – Federal Judge Rules Bitcoin Is Real Money:

Forbes.com contributor Kashmir Hill (@KashHill) highlights a new development regarding ways existing laws can be applied to Bitcoin-related activity.  Excerpts:

“In defending himself against the SEC suit, Shavers argued that Bitcoin isn’t actually money and that the SEC shouldn’t be able to prosecute him.”

“‘Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands.’”

“‘It is clear that Bitcoin can be used as money,’ writes Judge Mazzant in a ruling on Tuesday. ‘It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses.’”

”’[Bitcoin] can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan,’ writes Mazzant. ‘Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.’”

 – http://onforb.es/14z4dAx
 – http://bitcointalk.org/index.php?topic=269612.0 (Futher discussion of this legal memorandum)

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DealBook – Winklevoss Bitcoin Trust

DealBook – Winklevoss Bitcoin Trust:

NY Times financial reporters Nathaniel Popper (@NathanielPopper) and Peter Lattman (@PeterLattman) broke the news that the Cameron and Tyler Winkelvoss have filed with the SEC a proposal to create a Bitcoin exchange-traded fund.  Excerpts:

“The plan involves an exchange-traded fund, which usually tracks a basket of stocks or a commodity, but in this case would hold only bitcoins.”

“The Winklevoss Bitcoin Trust could send digital money from the realm of computer programmers, Internet entrepreneurs and a small circle of professional investors like themselves into the hands of retail investors — virtually anyone with a brokerage account.”

“‘The trust brings bitcoin to Main Street and mainstream investors to bitcoin,’ said Tyler Winklevoss, co-founder of Math-Based Asset Services, which would operate the proposed fund.”

“Their proposal has the advantage of coming from the desk of Kathleen Moriarty [who had] a leading role in the creation of the first exchange-traded fund and popular gold- and silver-backed E.T.F.’s.”

“The Winklevosses [previously] went public with their own bitcoin hoard, amounting to about 1 percent of all outstanding coins, or about $10 million.”

“An exchange-traded fund would make it significantly easier to gain exposure to bitcoins, just as commodities-based funds have made investing in gold, silver and other precious metals more accessible.”

“The Winklevoss fund would buy one bitcoin for every five shares, making the value of a single share worth about a fifth of a single bitcoin.”

“‘Digital currencies are not going away,’ said Carol Van Cleef, the head of law firm Patton Boggs’s emerging-payments practice.”

 – http://nyti.ms/1cK00Ys
 – http://1.usa.gov/13i07w0 (Proposal / S-1 Registration Statement)
 – http://bitcointalk.org/index.php?topic=248013.0 (Further discussion)

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