The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in its statement said, “No need to register if you mine Bitcoin for yourself alone.” The statement was issued by the body after a facility that operates hardware for miners in New Jersey, Atlantic City Bitcoin, enquired about the same from FinCEN.
In its reply FinCEN said that to the extent that a user mines Bitcoin and uses the Bitcoin solely for his own purposes and not for the benefit of another, he is not an MSB under FinCEN’s regulations. The reason behind this according to the body is that these activities involve neither “acceptance” nor “transmission” of the convertible virtual currency and are not the transmission of funds.
However, FinCEN clarified that the users who transmit or convert funds for second parties would still have to register. According to market observers this is a welcome development considering the fact that FinCEN earlier this year had issued guidance wherein it gave some outline on how virtual currencies like Bitcoin should be regulated a lot of misunderstanding was prevailing among Bitcoiners.
The Wrong Interpretation Led to uncertainty among Individual Bitcoin Miners
There was this interpretation that under the then issued guidelines both companies and individuals trading in the cryptocurrencies would need to register with the U.S. government as it was visual that it was a money-services businesses. The interpretation kept thousands of Bitcoin miners in dock as they felt they too have been put in the same category where a Bitcoin company has been put.
A clarification was needed and that is when Atlantic City Bitcoin requested FinCEN which gave the deliberation and now it is all clear that individuals who are mining Bitcoin for their own use won’t be asked to register. This development has been welcomed by thousands of Bitcoin miners and even to organizations like the Bitcoin Foundation which had shown their unhappiness when the decision was made earlier this year.
After facing a lot of setback in China and India where their respective governmental bodies issued guidelines to restrict the use of virtual currencies, the latest clarification from FinCEN is expected to help individual Bitcoin miners. It has to be remembered that following China, India’s Reserve Bank of India issued a guideline earlier this month for Bitcoin users and warned them that it is not real money and is unsafe to a great extent.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org