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Regulation
Should bitcoin be regulated, if so how and by whom? Why could be regulating
bitcoin be a good or bad idea? There are many arguments for and against bitcoin
regulation. If you go looking you are likely to find more arguments against it but
that doesn't mean there are none.
Government policy on government intervention or regulation has varied over time
and location. Regulation is a local activity, but the internet and the blockchain are
shared global networks.
Time judges some regulations as good or bad independent of any good intentions
that may have gone into their creation.
Pros of Regulation
Regulation can be designed to keep a market system from failure.
A theoretical example of this is a 'lemon market' where objects on the market
could be of differing quality but this difference cannot be gleaned by customers.
Regulation can require disclosure of products so customers can decide with full
information. A potential problem is how to be sure the regulation would be
enforced.
Another argument for regulation is price fixing, where competing businesses
decide to collude to for profit. Price fixing is illegal in most parts of the modern
world and in the US it is part of anti-trust laws.
Cons of Regulation
Regulation can stifle business by limiting options but sometimes rules are in place
for a good reason. Deregulation across industry by the Bush presidents result in
actions by businesses that were previously not allowed and have resulted in
serious and long lasting damage to ecosystems.
High start up cost raises barrier to entry, stifling innovation and new ideas.
Illogical rules; history has shown us that those that make the laws often lack a
strong understanding of the subject they are creating rules on.
Rules may favor old guard making it difficult to create new models.
The NY BitLicense
BitLicense is a New York state only requirement for certain activities. It was filed in
July 2014, released almost a year later.
Any business that have even one customer in NY or are operating in NY, and do
any one of a number of activities related to btc would be required to get a 'bit
license.' This requires registration and fees paid to the state of NY dept financial
services. The business would also have to update the state with financial
information and follow rules. These regulations also include rules regarding testing
and backup, to ensure the safety of customer funds.
A majority of Bitcoin businesses founded these rules unacceptable most took their
business out of state or restricted access to residents.
License Approved
London, in an effort to become a hub of bitcoin and blockchain technology began
approving electronic money license for Bitcoin companies like Circle.
Circle is one of the few companies to apply for and receive a New York BitLicense
as well.
BitStamp became the first company to secure a license to exchange BTC & EUR
for all 28 members of the European Union.
Enforcement
There are probably governments and companies around the world that use or
work with teams that investigate the blockchain. The US Dept. of Homeland
Security has a bitcoin task force already. Interpol has used bitcoin in training
scenarios.
The EU released plans in summer 2016 to force KYC/AML upon virtual currency
providers and exchanges, the method of enforcement is yet unknown
The company made famous by the sidechain whitepaper stated they would
defensively patent their work, let others use it as long as they didnt abuse their
patent rights on it,
Sources
http://www.zerohedge.com/news/2015-05-27/switzerland-open-bitcoin-bank-crypto-fort-knox-relocates-zurich
http://bitcoinassociation.ch/blog/no-vat-on-bitcoin-in-switzerland/
http://fortune.com/2015/08/14/bitcoin-startups-leave-new-york-bitlicense/
https://act.eff.org/action/stop-the-bitlicense
http://www.coindesk.com/real-cost-applying-new-york-bitlicense/
https://en.wikipedia.org/wiki/Benjamin_Lawsky
http://www.coindesk.com/lawsky-new-consulting-firm-cant-advise-on-bitlicense/
https://news.bitcoin.com/ben-lawskys-revolving-door/
http://www.bizjournals.com/newyork/news/2015/08/04/benjamin-lawsky-may-have-just-painted-his-startup.html
https://btcmanager.com/news/finance/japan-set-to-unveil-digital-currency-regulations-surge-in-jpy-btc-volumes/
http://www.coinfox.info/news/4429-the-investigative-committee-director-russia-unless-bitcoin-is-banned-it-can-displace-ruble
Brookings institution discussion https://www.youtube.com/watch?v=R0iArSIU0Z8&feature=youtu.be&t=47m16s
http://www.blockcy.com/digital-currencies-commodities-judge
http://asia.nikkei.com/Politics-Economy/Policy-Politics/Japan-eyes-treating-bitcoins-the-same-as-real-money
http://www.econotimes.com/Japans-Cabinet-Approves-New-Bitcoin-Regulations-173554
http://bitcoinist.net/latin-american-virtual-currency-forum-finncial-regulatory-environment/
http://www.coinfox.info/news/2756-fincen-colored-coins-companies-fall-under-money-transmitter-definition
http://www.cftc.gov/PressRoom/PressReleases/pr7231-15
https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country
http://www.coindesk.com/north-carolina-exempts-bitcoin-regulation/
http://www.coinfox.info/news/5397-estoniya-prekratila-rassledovanie-po-delu-bitkoin-torgovtsa-2
Sources Continued 2
http://themerkle.com/homeland-security-bitcoin-task-force-is-very-real/
http://www.asahi.com/articles/ASJ1W4RWKJ1WULFA012.html
https://bitconnect.co/bitcoin_news/bitcoinfront/details/92/
http://www.investing.com/news/technology-news/global-regulators-move-closer-to-regulating-fintech-392799
http://www.fsb.org/about/
http://www.lexology.com/library/detail.aspx?g=d80f280b-43e7-4168-bd7e-2d007a5652f5&utm_source=Lexology+Daily+Newsfeed&utm_medium=H
TML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2016-04-01&ut
m_term=
http://www.nytimes.com/2016/04/06/business/dealbook/bitcoin-start-up-gets-an-electronic-money-license-in-britain.html?_r=0
https://www.the-fca.org.uk/firms-sectors/electronic-money-institution?field_fcasf_sector=231&field_fcasf_page_category=unset
http://www.businessinsider.com/man-pleads-guilty-to-bitcoin-securities-fraud-2015-9
http://www.financemagnates.com/cryptocurrency/news/plea-deal-reached-in-trendon-shavers-bitcoin-ponzi-scheme/
http://www.ibtimes.com/bitcoin-fraud-texas-man-pleads-guilty-ponzi-scheme-2107889
http://www.sciencemag.org/news/2016/03/why-criminals-cant-hide-behind-bitcoin
US legal actions dealing with btc
https://www.cryptocoinsnews.com/u-s-law-enforcement-actions-cryptocurrency-businesses-review-suggested-guidance/
https://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543655716
http://www.coindesk.com/sec-bitcoin-exchange-60000-securities-violations/
https://en.wikipedia.org/wiki/Sheep_Marketplace
http://www.dailydot.com/crime/sheep-marketplace-scam-arrested/
http://www.theverge.com/2013/4/29/4281656/silk-road-black-market-reloaded-tor-marketplaces
Sources Continued 3
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http://www.coindesk.com/swift-bitcoin-regulation-eu-long-way-away/
http://www.coindesk.com/armenian-central-bank-bitcoin-use/
https://translate.google.com/translate?hl=en&sl=auto&tl=en&u=http%3A%2F%2Fwww.pbc.gov.cn%2Fgoutongjiaoliu%2F113456%2F113469%2F30
08070%2Findex.html
http://www.kansascity.com/news/business/technology/article56018330.html
http://www.newsbtc.com/2016/03/04/cabinet-of-japan-greenlights-bitcoin-as-payment-method/
https://webcache.googleusercontent.com/search?q=cache:lHuRHcLkFRcJ:www.parl.gc.ca/Content/SEN/Committee/412/banc/rep/rep12jun15-e.pdf+
&cd=1&hl=en&ct=clnk&gl=ca
http://www.cftc.gov/PressRoom/SpeechesTestimony/opagiancarlo-13
http://www.themoscowtimes.com/article/514363.html
http://www.bloombergview.com/articles/2016-01-31/bring-on-the-cashless-future
http://europa.eu/rapid/press-release_IP-16-202_en.htm
http://www.businessinsider.com/it-costs-as-little-as-80-to-bribe-a-cleaner-to-help-coordinate-a-cyber-attack-2016-1?r=UK&IR=T
https://www.reddit.com/r/Bitcoin/comments/4efdam/estonia_now_officially_worst_country_in_eu_for/
http://cointelegraph.com/news/top-bitcoin-insiders-clandestinely-work-with-eu-leaked-emails-show?ref=6143
https://www.fincen.gov/news_room/testimony/html/20131119.html
https://uk.news.yahoo.com/honduras-build-land-title-registry-using-bitcoin-technology-162701917.html#rsbZgQ3
http://www.parl.gc.ca/Content/SEN/Committee/412/banc/rms/12jun15/Infographic-e.htm
https://www.reddit.com/r/Bitcoin/comments/3g1a8n/g7_pledged_support_for_bitcoin_regulation_at_june/
Sources Continued 4
http://www.coindesk.com/g7-pledged-support-for-appropriate-bitcoin-regulation-at-june-summit/?utm_source=feedburner&utm_medium=feed&utm_c
ampaign=Feed:+CoinDesk+%28CoinDesk+-+The+Voice+of+Digital+Currency%29
http://fortune.com/2015/04/23/theres-big-pressure-on-new-yorks-bitcoin-regulation-plan/
https://bitcoinmagazine.com/19767/bitlicense-comment-period-closes-fred-wilson-coinbase-coin-center-weigh/
https://webcache.googleusercontent.com/search?q=cache:lpnm8zJm3K0J:www.dfs.ny.gov/legal/regulations/rev_bitlicense_reg_framework.htm+&cd
=2&hl=en&ct=clnk&gl=us
https://webcache.googleusercontent.com/search?q=cache:QDvqVrssrasJ:www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf+&cd=1&hl=en&ct=cln
k&gl=us
http://www.coindesk.com/nydfs-expects-final-bitlicense-very-soon/
http://www.dfs.ny.gov/about/press/pr1506021.htm
PDF http://www.dfs.ny.gov/legal/regulations/adoptions/dfsp200t.pdf
https://bitcoinmagazine.com/articles/another-bitcoin-startup-leaves-ny-due-bitlicense-1438903511
http://www.cnbc.com/2015/02/06/ecuador-becomes-the-first-country-to-roll-out-its-own-digital-durrency.html
https://www.reddit.com/r/Bitcoin/comments/362f12/bitcoin_websites_unblocked_in_russia_court_was_won/
https://tierion.com/blog/first-government-survey-recorded-in-the-blockchain/
http://www.coindesk.com/bangladesh-outlaw-bitcoin-jail/
http://www.coindesk.com/ecuador-national-e-money-initiative/
https://coincenter.org/2015/07/california-updated-its-digital-currency-legislation-and-it-looks-great/
http://bitcoinist.net/coinbase-suspends-service-wyoming-indefinitely/
https://www.reddit.com/r/Bitcoin/comments/39i06m/irs_auditing_people_selling_bitcoin/
https://www.fincen.gov/news_room/rp/rulings/html/FIN-2014-R001.html
Sources Continued 5
https://www.youtube.com/watch?v=6l5SVpFPxDY
https://verdict.justia.com/2014/09/09/bitcoin-money
https://en.wikipedia.org/wiki/European_Central_Bank
http://edmoy.com/consequences-of-bitcoin-classified-as-property/
https://pando.com/2014/12/09/ny-clarifies-bitcoin-taxation-affirming-intangible-property-classification-and-likening-bitcoin-transactions-to-bartering/
https://www.virtualcurrencyreport.com/2014/03/irs-clarifies-tax-treatment-of-bitcoin-and-other-convertible-currencies/
https://webcache.googleusercontent.com/search?q=cache:rnutG9y-UKcJ:www.irs.gov/pub/irs-drop/n-14-21.pdf+&cd=5&hl=en&ct=clnk&gl=us
https://thebitcoinbyte.wordpress.com/2014/03/20/shit-bitcoin-fanatics-say/
https://i.imgur.com/PsnAYhM.jpg
https://imgur.com/is0LENQ
http://cointelegraph.com/news/apple-approves-new-game-of-birds-app-with-bitcoin-tipping
https://www.reddit.com/r/Bitcoin/comments/3454cg/why_bitcoin_still_blows_my_mind_more_than_a_year/
https://www.reddit.com/r/Bitcoin/comments/35i8w8/this_fungus_is_called_bitcoin/
https://twitter.com/cdixon/status/616658607157997569
https://www.reddit.com/r/Bitcoin/comments/1mb27q/bitcoins_vast_overvaluation_appears_caused_by/cc7i6y8
What is the Internet? 1994 https://www.youtube.com/watch?v=CtWGsNqSo_Y
https://www.reddit.com/r/Bitcoin/comments/37zbrg/independence_and_money_my_bitcoin_story/
https://bitcointalk.org/index.php?topic=576337
http://www.ofnumbers.com/2016/06/27/a-kimberley-process-for-cryptocurrencies/
http://mashable.com/2016/06/27/bitcoin-auction-australia/#IqjgSsd6SZqb
http://bravenewcoin.com/news/the-european-commissions-divide-over-cryptocurrency-regulation-grows-wider/
http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1455113825366&uri=CELEX:52016DC0050#document2
http://bravenewcoin.com/news/ukraine-to-use-blockchain-technology-in-curtailing-corruption-when-selling-government-assets/
http://forklog.net/blockchain-incredible-party-part-1-govtech-and-financial-infrastructure/
SEC files C&D letter with BIT https://www.cryptocoinsnews.com/sec-issues-cease-and-desist-order-against-bit-and-authorized-participant-levies-fine/
GBTC OK through http://www.coindesk.com/bitcoin-investment-trust-50000-settlement/
UK parliament shows no btc use for terrorism funding ,unlike fiat http://www.newsbtc.com/2016/07/13/uk-parliament-report-shows-no-bitcoin-involvement-isil-funding/
Regarding taxes selling btc with stipulations https://www.reddit.com/r/personalfinance/comments/4sn2cp/psa_useful_personal_finance_loopholes/d5an2mm
http://www.bizjournals.com/newyork/news/2016/07/13/sec-to-bitcoin-investment-trust-cease-and-desist.html
Blockstream defensive patents https://blockstream.com/2016/07/19/blockstream-defensive-patent-strategy/
BoE discusses blockchains with house of lords http://bravenewcoin.com/news/house-of-lords-told-bank-of-englands-digital-currency-is-some-ways-off/
Complaints on virtual currency http://coincenter.org/link/we-got-a-data-dump-of-all-the-complaints-about-virtual-currency-products-and-services-filed-with-the-cfpb
Russia allegedly says they will allow trading https://cointelegraph.com/news/russia-to-treat-bitcoin-as-foreign-currency-and-enable-trading
Gibraitar opens btc on exchange https://www.gsx.gi/article/8292/gibraltar-stock-exchange-welcomes-bitcoineti
Charges dropped against Michell Espinoza who tried to sell btc to undercover officers http://www.miamiherald.com/news/local/crime/article80421072.html
http://www.miamiherald.com/news/local/crime/article91682102.html
Registry of BC users? https://cointelegraph.com/news/eu-to-register-digital-currency-users-record-bitcoin-transactions
Only banks http://bitcoinx.io/news/articles/the-story-of-how-a-chilean-bitcoin-exchange-lost-70-of-their-customers-due-to-a-santander-bank-blockade/
About the new AML/4AMLD in the EU http://ukcryptocurrency.com/random-musings/eu-regulation/