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California Sends a Cease and Desist Order To the Bitcoin Foundation

samzenpus posted about a year ago | from the pay-up dept.

Bitcoin 396

An anonymous reader writes in with bad news for the Bitcoin Foundation. "California's Department of Financial Institutions has issued a cease and desist letter to the Bitcoin Foundation for "allegedly engaging in the business of money transmission without a license or proper authorization," according to Forbes. The news comes after Bitcoin held its "Future of Payments" conference in San Jose last month. If found in violation, penalties range from $1,000 to $2,500 per violation per day plus criminal prosecution (which could lead to more fines and possibly imprisonment). Under federal law, it's also a felony "to engage in the business of money transmission without the appropriate state license or failure to register with the US Treasury Department," according to Forbes. Penalties under that law could be up to five years in prison and a $250,000 fine."

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Uh (5, Insightful)

Anonymous Coward | about a year ago | (#44089771)

When did the foundation become a money transmitter? Oh yeah, it didn't.

Re:Uh (5, Interesting)

NFN_NLN (633283) | about a year ago | (#44089809)

“I believe that banking institutions are more dangerous to our liberties than standing armies.” – Thomas Jefferson

History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance. -James Madison

Good riddence (-1, Flamebait)

Anonymous Coward | about a year ago | (#44089871)

Bitcoin only works by being ridiculously inefficient, which is bad for global warming when you consider all the CO2 it is creating. I'll be glad to see it die. The government can't move fast enough on this.

Re:Good riddence (1, Redundant)

MobSwatter (2884921) | about a year ago | (#44090319)

Piss on anything different that actually might undermine power afforded to banking institutions that have ultimate control to manipulate society to engage in war, population control and any number of pretty screwed up shit. Can you really blame them for trying?

Re:Uh (5, Insightful)

Osgeld (1900440) | about a year ago | (#44089887)

"Hemp is of first necessity to the wealth & protection of the country." – Thomas Jefferson

"What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not that his plans may be rendered unlawful before they can be executed?" -James Madison

dont fucking pick and choose, it makes you look like a nut

Re:Uh (2, Funny)

Anonymous Coward | about a year ago | (#44089935)

Fuck, I'm missing a moderation choice.

That's a "-1/+1 Tried to be snippy smart-ass but actually told good honest truths inadvertently."

AC not to undo other moderations.

Re:Uh (5, Insightful)

Anonymous Coward | about a year ago | (#44089953)

It's Slashdot, the truth tends to piss people off around here.

We can't handle the truth! (0)

Anonymous Coward | about a year ago | (#44090133)

Col. Jessep: You want answers?

Kaffee: I think I'm entitled to.

Col. Jessep: *You want answers?*

Kaffee: *I want the truth!*

Col. Jessep: *You can't handle the truth!*

Re:Uh (5, Insightful)

Kell Bengal (711123) | about a year ago | (#44089949)

Actually, I'd argue both Jefferson and Madison are talking sense here. Jefferson points out that a valuable commercial product should be exploited. Madison says that risk amelioration is important to encouraging business innovation.

How does failing to mention them (valid statements, if unrelated to the GPs point) constitute picking and choosing?

Re:Uh (-1)

Anonymous Coward | about a year ago | (#44090179)

+1

Fallacies (4, Insightful)

gd2shoe (747932) | about a year ago | (#44090141)

dont fucking pick and choose, it makes you look like a nut

Oh give me a break. This is an attacking-the-messenger fallacy. If you want to accuse him of appeal-to-authority, that's fine, but your quotes in no way invalidate his.

Further, everyone says something crazy at some time in their lives. If you try hard enough, you can find a crazy quote for anyone famous. Unless everyone, ever, have all been insane, you've got to give some lee-way.

(Besides, your James Madison quote actually makes sense. Sometime the only progress we've achieved have been from visionary merchants, and not prudent ones. It has also been said that you can only count the number of businesses that have been created, but can never count the ones that could have been, but were dissuaded by inept or corrupt governance.)

Re:Uh (1)

Anonymous Coward | about a year ago | (#44090187)

Of course you pick and choose. Otherwise it makes you stupid.

You pick the good stuff and reject the crap.

'Money changers' = 'Jews' (-1, Troll)

Anonymous Coward | about a year ago | (#44090003)

Never forget that. It's the JEWS who are destroying your country - who runs your media, your Congress, who tells you what the 'truth' is every day on their T.V. stations, and through their (crappy) films? The JEW.

Re:Uh (3, Funny)

gl4ss (559668) | about a year ago | (#44089819)

next up: php conference getting sued for security flaws in websites implemented in php.

I don't think they quite thought it through that bitcoin foundation can not cease bitcoin transfers.

Re:Uh (5, Insightful)

sFurbo (1361249) | about a year ago | (#44089875)

Don't think they thought it through? The foundation is theoretically unable to comply, so they have no way to avoid being closed and the executives put in jail. What part of that seems not thought through?

Re:Uh (5, Funny)

davester666 (731373) | about a year ago | (#44089919)

And once that happens...California's problems are finally solved.

Re:Uh (1)

sFurbo (1361249) | about a year ago | (#44089937)

Forever!

Re:Uh (2)

DKlineburg (1074921) | about a year ago | (#44090253)

Is that 3: Profit!

Re:Uh (-1)

Anonymous Coward | about a year ago | (#44089867)

oh I dunno, the moment it started sending monitory values?

fucking retard dont play your bullshit wordgames with us, we know what bitcoin does, its only a currency until it violates currency laws, which have thousands of years of prior knowledge on its side

Re:Uh (5, Insightful)

Kell Bengal (711123) | about a year ago | (#44089959)

And if the Bitcoin Foundation actually transmitted monetary value you might actually have a point.

Re:Uh (5, Informative)

magic maverick (2615475) | about a year ago | (#44089965)

Quite.
I think that the foundation could send back a nicely worded letter to the effect that they write software/sponsor the writing of software (delete as applicable). They do not sell cars, sell drugs, or engage in money transfer. They should not be held any more responsible for the use their software is put to, than Microsoft is responsible for MS Word being used to write threatening letters to people.

Also, dear the editors, specifically samzenpus, please link to the original source, in this case Forbes [forbes.com] , rather than to some random other website. You might also link to the cease and desist letter [scribd.com] itself.

Re:Uh (-1)

Anonymous Coward | about a year ago | (#44090031)

I was going to say something about editing as well, but it turns out that

it is a felony violation of federal law to engage in the business of money transmission without the appropriate state license or failure to register with the U.S. Treasury Department

is actually what it says in the Forbes article. If that's correct then they should be fine as long as they haven't registered with the U.S. Treasury Department.

Re:Uh (3, Insightful)

Anonymous Coward | about a year ago | (#44090081)

the foundation doesn't transfer any money or bitcoins. The exchanges like mt gox do but that's a whole other story.

Re:Uh (2)

barv (1382797) | about a year ago | (#44090095)

exclusive "OR" huh?

Re:Uh (2)

Smirker (695167) | about a year ago | (#44090065)

The Department of Financial Institutions clearly doesn't use AdBlock. (last page cease and desist letter)

Penalties/fines (5, Funny)

Sooner Boomer (96864) | about a year ago | (#44089773)

Can they pay those with bitcoin?

Re:Penalties/fines (5, Funny)

Anonymous Coward | about a year ago | (#44089817)

All your bitcoin are belong to US

XBox Live Points (5, Insightful)

Anonymous Coward | about a year ago | (#44090193)

Next up they'll send a Cease and Desist order to the makers of the Bittorrent protocol. That will stop piracy dead in its tracks!

Are XBox Live Points money?

http://www.xbox.com/en-US/Live/MicrosoftPoints
"Microsoft Points are the coin of the Xbox LIVE Marketplace realm. Microsoft Points is a universal system that works across international borders, and is even available if you don't have a credit card. "

Re:XBox Live Points (3, Interesting)

DKlineburg (1074921) | about a year ago | (#44090283)

Would that than make all F2P illegal? You "Buy" fake currency to "Buy" things?

Old meets new (3, Interesting)

mcrbids (148650) | about a year ago | (#44089777)

So, the purveyor of mathematical computations that can be traded and/or sold via a network of cryptography meets a foundation that sells the idea of value via paper receipts.

This could get rather interesting...

Future regulation (5, Insightful)

cold fjord (826450) | about a year ago | (#44089779)

As Bitcoin grows more successful, there will be increasing interest in subjecting it to regulation, just like any other financial instrument.

Re:Future regulation (4, Insightful)

icebike (68054) | about a year ago | (#44089825)

But its not an institution.

You might as well enjoin the wind from blowing because it transports things without a license.
The foundation does not handle or transfer funds any more than meteorologists control the winds.

Re:Future regulation (4, Informative)

lxs (131946) | about a year ago | (#44089901)

In a world where seismologists can be jailed for not predicting an earthquake [guardian.co.uk] anything is possible.

Re:Future regulation (5, Informative)

Cenan (1892902) | about a year ago | (#44090205)

They were not jailed for failing to predict it, but for giving (provably) false assurances that no earthquake was eminent. Subtle difference, and one the "science community" seems to conveniently forget when bringing this story up.

The seven defendants, who belonged to the National Commission for the Forecast and Prevention of Major Risks, were accused of offering an unjustifiably optimistic assessment to the local population a week before the disaster. By then, the area had been hit by some 400 tremors over a period of four months and a local researcher had warned of the risk of a major earthquake, largely on the basis of abnormal radon emissions.

But after an extraordinary meeting of the commission in L'Aquila, one of the experts told a press conference that the situation was "normal" and even "favourable" because potentially destructive energy was being released through the tremors. The prosecution, which brought charges of multiple manslaughter, maintained that lives could have been saved had people not been persuaded by the assurances to remain in the area.

They were in a position of authority on the subject, yet they failed to exercise due diligence with respect to their own research. They ignored evidence that did not fit their own world view, and they presented their own as fact. The correct answer would have been "we don't know, take precautions", when asked. They didn't give that answer, and because of that 307 people died and 1,500 were injured. 80,000 lost their homes, but that would have happened regardless.

Re:Future regulation (1)

curious.corn (167387) | about a year ago | (#44090333)

Nicely summarized, bravo.

Re:Future regulation (2)

AmiMoJo (196126) | about a year ago | (#44090111)

The law tends to make you responsible even if you didn't built in a off switch. That's why the guys putting up designs for 3D printed guns need to be careful. Now they are widely distributed and there is no way to recall them they may well be liable under anti trafficking/export laws.

Saying "it's out of our hands now" is usually not a good defence. Having said that it seems that the original author of the BitCoin protocol would be the one who is liable, and no-one knows who he or she is.

Re:Future regulation (4, Insightful)

Teancum (67324) | about a year ago | (#44090197)

That is like saying the author of "The Anarchist Handbook" is liable for somebody building a bomb after being "inspired by" the book. Or similar kinds of actions. I suppose some guys in Hollywood have had lawsuits over various suicides and other nonsense.... and those lawsuits just get thrown out as well.

Your comment about the 3D printed guns is hardly a good reference as well since that has yet to work its way through the judicial system. While it is a "roll of the dice" in terms of what the final outcome might be, there have been numerous situations where the law meets new disruptive technologies. California is in a slightly better situation than most in terms of having to cope with advanced technology and its impact upon legal principles, but there still are a whole bunch of Luddites that lurk in the shadows trying to jump onto anything that seems new or innovative.

In regards to Bitcoins, I think the big deal may be for those who are users of the software and may be liable under this particular law. I have a feeling that would just introduce a sort of Barbara Streisand effect into the debate with thousands of Californians who will purposely download the software just to "stick it to the man" and open the whole thing into a major political debate that will ultimately need to be resolved by the state legislature (with consequences at the ballot box for missteps). I can only imagine the 1st amendment issues alone that might be brought up if a particular piece of software is declared illegal simply because of its protocol. The Federal government tried that with calling some types of software as a "munition" and therefore couldn't be exported (like PGP and the related GPG), but in the long run ordinary citizens weren't prosecuted either, certainly not on a widespread basis. I have a hard time seeing that happen in the case of Bitcoin being something new.

Re:Future regulation (2)

emt377 (610337) | about a year ago | (#44089833)

As Bitcoin grows more successful, there will be increasing interest in subjecting it to regulation, just like any other financial instrument.

The thing is it's not positioned as a financial instrument, but a currency. Financial instruments - their issue, trading, and reporting - is quite regulated as well. The whole anonymity aspect isn't going to play well no matter how it's dressed up.

Re:Future regulation (0)

Anonymous Coward | about a year ago | (#44089883)

>The thing is it's not positioned as a financial instrument, but a currency
No it's not. Only an idiot actually believes that. In order to be a real currency, you kinda have to have a lot of people use it to directly buy and sell things. Right now, bitcoin is defined solely by it's ability to be traded in for real money. People count on being able to get dollars or yen or w/e from them. Without that, bitcoin is worthless. Once it has worth of its own (the ability to receive a salary and to buy bread and pay rent w/o relying on converting to an outside currency) then it will be a currency. Right now it's a digital commodity, much like gold or gemstones.

Re:Future regulation (3, Insightful)

Macthorpe (960048) | about a year ago | (#44089921)

No it's not. Only an idiot actually believes that. In order to be a real currency, you kinda have to have a lot of people use it to directly buy and sell things.

You can already buy and sell things with Bitcoin. Example: Bitlasers. [bitlasers.com] So where is the line? How many items have to be sold before it becomes a currency? The logical answer would probably be "one".

Re:Future regulation (1)

Anonymous Coward | about a year ago | (#44090213)

They aren't actually selling in bitcoin you know. Those prices fluxuate around wildly. The dollar amounts stay fixed. What they do is allow you to auto convert your fake money into real money.

>The logical answer would probably be "one".
I believe you just proved how stupid you are. If you have to convert your money into other money to be able to buy staples (food and shelter, etc) then it's not real money. It's the same thing as buying shit in WoW gold.

Re: Future regulation (1)

Anonymous Coward | about a year ago | (#44090233)

http://www.reddit.com/r/Bitcoin/comments/1ggwiu/just_bought_groceries_with_bitcoin_first/

Your move.

Re:Future regulation (4, Insightful)

F.Ultra (1673484) | about a year ago | (#44090281)

So if I charge you with a fixed EUR rate but with a varying EURUSD rate (due to me living in Europe and thus having my prices set in EUR) this makes the USD not a currency?

Re:Future regulation (1)

stiggle (649614) | about a year ago | (#44090309)

I swapped half a pig for some brick laying and potatoes.
Does that mean a pig is now a unit of currency as I used it to buy goods and services (off the same person).

Re:Future regulation (0)

Anonymous Coward | about a year ago | (#44089963)

Bitcoin *would* be more common as a currency if its exchange rates were more stable. Currently, with its ability to go from 250USD to 75USD in matter of hours very few are willing to bind sales of physical goods to it.

There are bitcoin casinos, you can purchase actual bitcoin production machines (FPGA hardware) with bitcoin, but it's hard to set the price of wares basing on something so volatile.

It is expected as the bitcoin market grows, its price will stabilize too, and that would make it a more viable as a currency.

Re:Future regulation (1)

Neo-Rio-101 (700494) | about a year ago | (#44089967)

Once it has worth of its own (the ability to receive a salary and to buy bread and pay rent w/o relying on converting to an outside currency) then it will be a currency. Right now it's a digital commodity, much like gold or gemstones.

And that will never happen, because governments will want to be paid tax in the currency of the land. That means that conversion will always have to exist, and whilst it always exists, they will regulate it.

Governments and the banks will fight tooth and nail to maintain the monopoly over their money that they enjoy. They won't stand for a second to have all their assets devalued because nobody wants to trade with them.

Re:Future regulation (0)

Anonymous Coward | about a year ago | (#44090203)

Which is why it's designed the way it is. Attempts at controlling Bitcoin have been anticipated and dealt with ahead of time. Everything is according to plan.

Good (1)

Anonymous Coward | about a year ago | (#44089789)

..

Looks Like MEAT'S BACK ON THE MENU, BOYS! (-1)

Anonymous Coward | about a year ago | (#44089793)

meat is back on the menu boys
homosexual hobbits are midgets with a kinder name

gandalf leans back, rubs his long pipe and a puff of thick smoke blows his robes open in the front, exiting from his 20" penis.

Fear... and Control... (1, Insightful)

Vapula (14703) | about a year ago | (#44089795)

Like the US attacked the Irak when it began to accept payument for Petroleum in Euro instead of dollars, it's attacking Bitcoin as it becomes a viable alternative to dollar...

Re:Fear... and Control... (0)

Anonymous Coward | about a year ago | (#44089851)

Like the US attacked the Irak when it began to accept payument for Petroleum in Euro instead of dollars, it's attacking Bitcoin as it becomes a viable alternative to dollar...

That is like saying England has declared war on dry turkey because a local official in Sussex wanted his money back for a sandwich.

Re:Fear... and Control... (1)

Osgeld (1900440) | about a year ago | (#44089893)

except that is more believable

Re:Fear... and Control... (0)

Anonymous Coward | about a year ago | (#44089857)

AHAHAHAHAHAHA a viable alternative?

Can I have your drugs?

Re:Fear... and Control... (3, Funny)

_4rp4n3t (1617415) | about a year ago | (#44090089)

Can I have your drugs?

Dunno - got any Bitcoins to pay for them with?

Boy, those Californians (1)

Anonymous Coward | about a year ago | (#44089811)

Boy, those Californians sure are up to date with all this technological stuff.

(This is like sending a C&D to the Heart Foundation for performing unlicenced heart surgery.)

Canada (3, Informative)

mmontour (2208) | about a year ago | (#44089821)

Last I heard, Canada was still OK with it [pcworld.com] as long as you pay taxes [rt.com] on any applicable transactions. I don't know how long it will last.

When did bitcoin(tm) become a currency (3, Insightful)

Anonymous Coward | about a year ago | (#44089827)

These bitcoin things are a commodity similar to a mineral so it should really be known as a virtual mineral rather than a currency as you mine the stuff and label it same as other commodities.

Re:When did bitcoin(tm) become a currency (0)

Anonymous Coward | about a year ago | (#44090135)

Commodities have intrinsic value. Fiat currencies don't. The funny thing is that Bitcoin has no backing from any party, which means it sits somewhere between a traditional currency and a ponzi scheme.

Re:When did bitcoin(tm) become a currency (1)

Gwala (309968) | about a year ago | (#44090311)

There are lots of commodities that trade so far above their intrinsic value that they are fiat.

E.g. Gold.

So Bitcoin is money? (4, Interesting)

Anonymous Coward | about a year ago | (#44089829)

Cool! That's a great endorsement if ever there was one.

Bitcoin is money, it's official! And sending bitcoins is sending money! And bitcoins in a reserve are covered by baking deposit insurance just like any other money!

" it's also a felony "to engage in the business of money transmission without the appropriate state license or failure to register with the US Treasury Department,"

Which they don't do, nice try, but if you shut them down, you don't make squat difference to bitcoin.

Re:So Bitcoin is money? (1)

Anonymous Coward | about a year ago | (#44089903)

what insurance? theres nothing there to protect bitcoins

monitary insurance is not a given, its a program set up by the people who issue it, bitcoin does nothing of the sort

time to accept that all your privileges have been given to you by someone else that had a little more vision than ME and MINE

stupid prick

No 'run-on-the-bank' with bitcoin (0)

Anonymous Coward | about a year ago | (#44090301)

Bitcoin isn't a fiat currency, the banks don't magic it from thin air. So deposit insurance makes no sense, any 'bitcoin bank' could not leverage bitcoins into more bitcoins, overextend and collapse.

If a bitcoin bank, lent a bitcoin, then they'd have to take one of their bitcoins and give you it.

If a dollar bank lent a dollar, they borrow one of the magically created dollars from the Fed bank, which costs them a tiny amount to borrow, and give it to you, earning money on the difference in interest rates. When they make bad loans, and have to repay actual dollars to the Fed from the tiny difference in margins they make, they collapse quickly. Hence the deposit insurance protecting a portion of the deposit is essential.

Before they tackle BitCoin (4, Insightful)

Ghjnut (1843450) | about a year ago | (#44089831)

I'd like to see what a fine-toothed comb turns up after running through the legalities of PayPal's business practices.

Re:Before they tackle BitCoin (2)

Macthorpe (960048) | about a year ago | (#44089933)

Nothing, because they're licensed?

So that's it then (3, Interesting)

hack slash (1064002) | about a year ago | (#44089835)

Confirmation from an American authority that Bitcoin is a legitimate form of money.

A form of money they have absolutely no control over.

[Nelson Muntz] Ha-ha! [/Nelson Muntz]

Re:So that's it then (0)

Anonymous Coward | about a year ago | (#44089877)

They've already said as much before.

and as for the second point... not like the us gov has much control over any other form of money besides the dollar.

Re:So that's it then (1)

Neo-Rio-101 (700494) | about a year ago | (#44089991)

Remember what happened to Jesus after he kicked around the Money Changers?

Re:So that's it then (4, Funny)

H0p313ss (811249) | about a year ago | (#44090023)

Remember what happened to Jesus after he kicked around the Money Changers?

I didn't expect the Spanish Inquisition!

Oops, wrong script, I'll come in again...

What have the Romans ever done for us eh?

Re:So that's it then (1)

Yvanhoe (564877) | about a year ago | (#44090171)

If Jesus only used Tor to give sermons, he could not have been betrayed by Judas.

Re:So that's it then (1)

F.Ultra (1673484) | about a year ago | (#44090293)

I think the church might call that Blasphemy ;)

Bitcoin hasn't gone away yet? (2, Insightful)

KaLeVR1 (34637) | about a year ago | (#44089841)

The way I translate this is that the US Gvt waited patiently for this to fold under its own weight and collapse. Now it looks like it's catching on so they've decided to try to kill it. Good Luck. I guess the creator remained anonymous for a reason.

Catch-22 (4, Interesting)

guttentag (313541) | about a year ago | (#44089845)

I wonder why California felt the Bitcoin Foundation was in violation of the law, which states that the following entities are exempt [ca.gov] from this licensing requirement:

An operator of a payment system to the extent that it provides processing, clearing, or settlement services, between or among persons excluded by this section, in connection with wire transfers, credit card transactions, debit card transactions, stored value transactions, automated clearing house transfers, or similar funds transfers, to the extent of its operation as such a provider.

If they're going to claim that the Bitcoin Foundation is engaged in the business of money transmission, wouldn't it be because they consider them to be the "operator of a payment system" as described in the law [ca.gov] ? Which would appear to exempt them from the licensing requirement.

Re:Catch-22 (2, Informative)

CaptQuark (2706165) | about a year ago | (#44089873)

Never let the law get in the way of suing someone...

Re:Catch-22 (4, Informative)

Anonymous Coward | about a year ago | (#44089881)

No, the 'payment system' you mention is the kind of thing a restaurant or shop does. They don't need to be licensed, but a central entity that works like a bank does have to. If it looks like a bank, flies like a bank and quacks like a bank, then it is a bank and should be licensed.

Re:Catch-22 (0)

Anonymous Coward | about a year ago | (#44089917)

That's nice.
Except for the part where the bitcoin foundation only distributes software.

Re:Catch-22 (3, Interesting)

slew (2918) | about a year ago | (#44090001)

That's nice.
Except for the part where the bitcoin foundation only distributes software.

Except by the own admission, they "standardizes, protects and promotes the use of bitcoin cryptographic money for the
benefit of users worldwide." Also, they appear to intend to use foundation money to lobby and fund a group of core developers.

Actions they take when they protect and promote, say if they involve actual sale or exchange of bitcoin (e.g., accepting donations from external developers/lobbyist in bitcoin converting them to USD on their behalf and kicking that money back to fund external developers/lobbyist) may not be looked upon so benignly...

Of course, right now, it's just a warning...

Re:Catch-22 (1)

Teancum (67324) | about a year ago | (#44090211)

Assuming this policy making board gets what they want... either that the foundation becomes licensed to do business in California as a financial transaction agency (aka a "bribe" as it means the policy board collects some additional revenue) or the foundation is shut down.

What exactly do they think is going to happen if the foundation is shut down? That the software will stop being used or that nobody will be distributing Bitcoin clients? For something published under the GPL?

Re:Catch-22 (0)

Anonymous Coward | about a year ago | (#44089891)

Sue first.. figure out how to change the law so you can win later.. it's the RIAA model!

no NO NO NO (1)

kawabago (551139) | about a year ago | (#44089975)

It's the secret laws they're breaking. We aren't allowed to know what those laws are, but rest assured, these entities are guilty. Trust your government. or else.

Re:Catch-22 (0)

Anonymous Coward | about a year ago | (#44089987)

Thing is the foundation isn't performing any money transfers. They only provide software. Bitcoin users perform these transfers themselves.

It's a bit like you'd arrest a wallet manufacturer for trafficking money - because people carry money in wallets made by them.

Re:Catch-22 (0)

Anonymous Coward | about a year ago | (#44090053)

You mean like this story [slashdot.org] ?

Re:Catch-22 (0)

Anonymous Coward | about a year ago | (#44090069)

Except the law is not "doing money transfers." It's "engaging in the business of money transfers." Considering the foundation works on the infrastructure to do these money transfers, they're in violation of the law.

Re:Catch-22 (1)

rmdashrf (1338183) | about a year ago | (#44090029)

Apart from that, doesn't the state of California just imply that Bitcoin is a real currency?

Re:Catch-22 (0)

Anonymous Coward | about a year ago | (#44090093)

No, they're implying that bitcoins are a way to transfer money between currencies without regulations.

Re:Catch-22 (0)

Anonymous Coward | about a year ago | (#44090353)

Same state that ignores Federal law for Cannabis, Illegal immigration, (with that safe city, and hiring). They break laws all the time. They just want to charge money for it, cause they are so broke. Threaten to boycott Arizona over them following Federal law, until they realized a lot of their water and electricity comes from there.

~SimonTek

Shutdown procedure (1)

anonymoustommi (2961079) | about a year ago | (#44089927)

Guessing they go the general guidelines shown by DRM-industry, first they troll on developers making it possible and then on users doing it. I wonder if laws need to be rewritten as has been done globally with anti-piracy stuff, or if the current ones can be interpreted in disfavor of bitcoin community? In the end they make their own legitimate digital currency, which they cant print as they please.

This doesn't surprise me (4, Insightful)

jonwil (467024) | about a year ago | (#44089931)

Any time someone invents a way of moving value/wealth around, its going to be subject to regulation by governments looking to prevent its use by criminals and bad guys to move their ill-gotten gains and hide where their money came from.

Doesn't matter if its Bitcoin, US dollars, Second Life currency or cute cat pictures, if it can be used to buy stuff in the real world and has a real-world value, the governments of this world are going to want to regulate it.

Server farms in Ecuador (3)

Chrisq (894406) | about a year ago | (#44089997)

Server farms in Ecuador are looking really attractive

Re:Server farms in Ecuador (1)

Anonymous Coward | about a year ago | (#44090257)

I believe most web hosting/vps companies in Ecuador and much of S. America actually host in Miami, so Caveat emptor.

My experience from living in Brazil, is that hosting is expensive and unreliable, ymmv.

I would certainly like to hear from those with more positive experiences.

Is it barter or is it currency, already? (1)

edelbrp (62429) | about a year ago | (#44090011)

Am I a chicken farmer or minting government coins?

Re:Is it barter or is it currency, already? (0)

Anonymous Coward | about a year ago | (#44090127)

It doesn't matter. You still have to pay your taxes [wikipedia.org] .

Re:Is it barter or is it currency, already? (1)

edelbrp (62429) | about a year ago | (#44090155)

Exactly. It's about taxing the flow of currency, virtual or not. And that tax might be government or private.

They still aren't getting decentralization!? (0)

Anonymous Coward | about a year ago | (#44090037)

It's very VERY simple. They didn't TRANSMIT the currency because they never HAD the currency or even exchanged it for any other currency under the foundation moniker! Bob Fucking Saget at least have the decency to look up the theory of operation of the thing you're trying to destroy.

This is a result of Aaron Greenspan (1)

Anonymous Coward | about a year ago | (#44090041)

[Anonymous to prevent frivolous litigation, these are my opinions-- do your own googling for more facts]

Aaron Greenspan is a multiple time loser college buddy of the Zuckerberg and aspiring troll. After failing to make it big with facebook he's run a series of failed startups that all had names that begin with "face" for some reason his latest was "facecash", some kind of paypal alternative. But he was unable to meet California's onerous requirements for orgs transferring USD in that state (Paypal's moat, I guess). His response has been to troll just about anyone will let him get away with it-- including suing dozens of silicon valley startups with this weird pro se litigation that accuses them of having an easier time with the regulators than he did.

In his latest volley of accusations that CA is behaving inequitably he specifically singled out Bitcoin-- god knows what digital coins have to do with his paypal wannabe "facecash", but that someone else was getting along happily was apparently enough to bring his ire.

In any case, what you're seeing now is CA playing CYA and sending out some nastygrams to everyone Aaron has accused them of failing to enforce against. This makes the complete ineptitude of CA make a little more sense: their C&D seems clueless because they simply don't care.

Freedom? No freedom! (0)

Anonymous Coward | about a year ago | (#44090085)

True there are technical possibilities to exploit the network and use for illegal activites(e.g. money laundering), but hell isn't Uncle Sam responsible for poverty in the third world? It is, because of greedy corporations and unlawful actions. Bitcoin's approach renders USD useless and this appears to be a problem that one of the richest states saw.
Remember, not people but organizations are responsible for controlling money. But organizations are made by people, ruled by people and work is done by people, so no big secret they are full of human defects. Same happens with automotive industry - when they got control, they will start slow acceptance of Bitcoin like currency. Null novum sub solem.

Satoshi Nakamoto foresaw this (1)

knwny (2940129) | about a year ago | (#44090269)

This is precisely the reason why we will never know who Satoshi Nakamoto is.

Copyright violation? (1)

fufufang (2603203) | about a year ago | (#44090313)

I thought Cease and Desist is for copyright violation only?

Heh (1)

Arancaytar (966377) | about a year ago | (#44090331)

The Bitcoin Foundation doesn't have anything to do with the operation of the Bitcoin network. At least when they went after MtGox et al, they had some chance of making an impact by limiting the transfer of funds into and out of the currency. This here is a bit like prosecuting Bram Cohen for writing the protocol specification for BitTorrent.

Monopoly.. (3, Funny)

DeBaas (470886) | about a year ago | (#44090339)

maybe they'll go after Parker Brothers/Hasbro next

Not gonna fly (1)

Captain_Chaos (103843) | about a year ago | (#44090345)

Well this is not going to work of course:

1. It's not money (it's a commodity)
2. They're not transmitting it (the users are)

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