Bitcoin miners who mine “for themselves” do not have to register as Funds Solutions Companies (MSBs) with the US Financial Crimes Enforcement Network (FinCEN), according to an official letter from the agency this week.
FinCEN were replying to a request for clarification by Atlantic City Bitcoin (AC Bitcoin), aka advocate Milly Bitcoin, who maintains an array of ASIC miners in New Jersey. According to the letter, miners are nevertheless free of charge to obtain goods or trade with exchanges with the bitcoins they make no matter whether operating as people or businesses.
The news ought to come as a relief for smaller sized-scale mining operations. Jerry Brito reportedly wrote in a private letter final July that all miners would have to register as MSBs, and uncertainty had remained because then.
This could have place many individuals out of the mining company with its variety of compliance regulations, such as having an auditor on staff. AC Bitcoin has been in normal get in touch with with FinCEN in 2013 and pointed out that any necessity for miners to register as MSBs would call for a public statement to that effect beneath the US Administrative Procedures Act.
AC Bitcoin stated FinCEN’s explanation was satisfactory enough for modest miners at the moment, and showed FinCEN now had a greater understanding of bitcoin than in March, which was a optimistic sign.
The precise wording of the letter nevertheless leaves some room for interpretation, although, and its ramifications could hinge on words like “disposing” of bitcoin or “transmitter” of funds in several cases. This could be deliberate to let prosecution of person instances at some later stage, but FinCEN’s letter does clearly state it does not consider AC Bitcoin a “money transmission service” beneath its rules.
The letter stated:
“In undertaking such a conversion transaction, the user is not acting as an exchanger, notwithstanding the fact that the user is accepting a actual currency or yet another convertible virtual currency and transmitting Bitcoin, so extended as the user is undertaking the transaction solely for the user’s personal purposes and not as a enterprise service performed for the benefit of another. A user’s conversion of Bitcoin into a real currency or another convertible virtual currency, for that reason, does not in and of itself make the user a money transmitter.”
What is nonetheless not clear is how MSB or money transmission regulations will apply to bigger operations or companies selling hosted mining contracts, like Cloud Hashing, Cointerra’s TerraMine Hosting or Butterfly Labs’ Hosted Mining. Users on Reddit also engaged in debate over what it may possibly imply for mining pools. Such groups normally distribute mined bitcoins amongst themselves but they differ in size and complexity of their arrangements.
USB Mining image credit by way of Flickr
View FinCEN: Bitcoin Miners Want Not Register as Income Transmitters on CoinDesk.
FinCEN: Bitcoin Miners Need to have Not Register as Cash Transmitters
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