ForexMinute.com – The Financial Crimes Enforcement Network (FInCEN) released new Bitcoin guidelines for Bitcoin exchanges and payment processing companies in the US. The additional rulings stated that such organizations are subjected to fall under the category of money service businesses.
According to the US law, a Money Services Business includes any individual or companies which provides services such as currency dealing or exchange; check cashing; issuing/selling/redeeming of travelling checks, money orders or stored value; money transmission; and US Postal Service. The current working pattern of every Bitcoin payment processing company, as well as exchange, matches with one (or more) service(s) described above, making them liable to be registered as a ‘Money Services Business.’
On March 23rd this year, Bitcoin exchange BitPay had strongly objected for taking its business under such a category, as their services only facilitate transactions between sender and receiver. It doesn’t provide any of the service mentioned under the FinCEN cryptocurrency regulations. Though, an expert view suggests that FinCEN only provides exemption to Bank Secrecy Act regulated institutions, which BitPay unfortunately isn’t.
Worrisome Bitcoin Community
Like every time, Bitcoin community is reacting heavily. One of the first comments over the FinCEN rulings is about its suffocating nature. The comment says that this amendments will certainly make it very hard and expensive to build Bitcoin based products in the US. A rather amusing comment further added, “Leave the USA. Take your bitcoins, business ideas and energy with you. The place is demonstrably sclerotic with entrenched, epic fail. Go West young men!”
Indeed the community is poised to react over any kind of government intervention in Bitcoin. Some leftist sentiment clearly targeted FinCEN itself for its lack of transparency and poor leadership. Some even accused the agency for protecting engrained commercial interests. Though agreeing with their “decentralized” sentiments, we would like point out few good points out of these regulations.
Regulations Aren’t that Bad
In times when the cryptocurrency market is being constantly associated with fraudulent organizations, a stable regulation does no harm, at least to the law-abiding people of America. Instead, FinCEN new rulings gives community the opportunity to weed out bad actors, and bring more clarifying set of investors into the cryptocurrency space.
The only thing that is acting as a major hurdle in the advancement of Bitcoin is lower user adoption. It is only because a common Joe doesn’t trust the virtual currency of any kind thanks to the wonderful examples like Mt. Gox and Moolah. The only way to get rid of such scams in to fall under the government’s eyes. What’s the point of getting looted and calling the same authorities for help which you once called untrustworthy and manipulated?
What we now see at present is a bunch of immature Bitcoin fans, who are too lost in their anti-government faith to understand the actual benefits such regulations bring to cryptocurrency markets. Bitcoin is not just a trading instrument to short and buy. It was launched as a method to cut off middlemen and make transactions much cheaper than the traditional banking procedures. For a greater public understanding, the community first should maintain the coin’s trustworthiness as a viable trading medium. The overall focus should be on to boss merchant and user adoption at the same pace, which can never be achieved at large scales without trust and “regularization”.
FinCEN rulings, however harsh they may seem, is also a way to see how they are taking Bitcoin seriously. For a coin which was once called a Ponzi scheme by the world’s foremost trading analysts, is ready to share dais with so-called trustable US Dollar. Indeed, you all will have options to enter the cryptocurrency sector via illegitimate ways – much like you download a movie via torrent, rather than buying an original DVD. Regulations will only open an options for you to remain on the safer side. It is up to which way you prefer.
To contact the reporter of the story: Yashu Gola at email@example.com