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The Criminal Precedent that Could Curb Bitcoin’s Enthusiasm

[Reading Time: 10 minutes]

In July of 2008, after months of wrangling with the Department of Justice (DOJ), E-Gold, Ltd.’s senior management and directors pleaded guilty to the following charges:

  • Conspiracy to Launder Monetary Instruments (federal)
  • Conspiracy to Commit an Offense Against the United States (federal)
  • Operating of Unlicensed Money Transmitting Business (federal)
  • Transmitting Money Without a License (District of Columbia)

What does E-Gold have to do with Bitcoin?

Well, as soon as I describe what E-Gold was and did, you’ll see that the parallels with Bitcoin and its crypto-brethren are remarkably similar.  I will be quoting from the indictment itself, underlining Bitcoin-relevant language, and adding comments in brackets:

  1. E-Gold was an issuer of “digital currency,” defined as a medium of exchange offered over the Internet Continue reading
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It’s Official: Foreign Bitcoin Operators Servicing Texas Residents Must Obtain a Texas Money Transmitter License

[Reading Time: 3 minutes]

As of May 1, the state of Texas became the second US state to explicitly require foreign-located money transmitters (including Bitcoin exchangers and administrators) to obtain a state money transmitter license if their customers are residents of Texas.  The state of New York had taken a similar stance back in March of 2011.

In no ambiguous terms, the Texas Banking Department ruling, states that:

” […] it is the Department’s position that any money transmitter who allows Texas consumers to initiate transactions through its website is subject to the licensing requirements of the Money Services Act, regardless of where the transmitter is physically located.”

Equally clear had been the state of New York Banking Department in 2011 when ruling that:

” […] there is no doubt that businesses located out-of-state are subject to the jurisdiction of the state in which they do business.  […] Likewise, it is clear that businesses located out-of-state that do business Continue reading

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