Kevin Beal Posted July 22, 2014 Share Posted July 22, 2014 http://moneyandstate.com/reflections-right-privacy-response-nydfs-bitcoin-proposal/ The proposed digital currency regulation from Benjamin Lawsky, the Superintendent of 20 million/6 billion people’s financial decisions, has been on the horizon for months. New York is known for dictating how people live, and so as more people are incorporating Bitcoin into their lives, New York bureaucrats would inevitably attempt to place it under surveillance and control (with the best intentions, naturally). According to the new mandates, you will soon be unable to lawfully purchase a Bitcoin from any company that A) has any customers in New York and B) doesn’t keep an aggregated surveillance list of all customers, including name, address, photo ID, and “other identifying information,” regardless of the amounts transacted. And if the company you’d like to buy from does satisfy New York’s rules, you will then be required to add yourself to this surveillance list, having to then trust not only the company, and not only the government, but also every other 3rd party that may obtain such information, not to abuse it. Consider now that an Italian, wishing to buy $100 of Bitcoin from BitStamp in Slovenia, will now be forced to provide all his personal details, which will go on file with the United States government (and any 3rd parties able to obtain that file) because BitStamp has some customers in New York. The American government, not satisfied with continually carving away the freedoms of its own people, now heads abroad in search of freedoms elsewhere to slay. I can barely contain my anger about the astounding hubris of these assholes. The Winklevii are in favor of this shit, apparently. What the fuck? Here are some other gems: Entities ‘dealing in virtual currency’ must: - Perform AML and collect identities, including verification of government issued Photo ID and proof of address, and retain these information for 10 years. (200.15a) - Retain all transaction logs for 10 years, including real name & physical addresses of ALL parties of a transaction - yes, including whoever you are sending to. (200.12a1) - Report all transactions over the USD value of $3000, and file Suspicious Activity Reports. (200.15g4) - Maintain collateral in the form of USD, including collateral for Bitcoin balances. The % as collateral is unspecified. - Retained earnings and profits of in invested in US dollars. They may not keep any profit in Bitcoin.(200.8b) - Forfeit Bitcoins that are inactive for over 5 years to the State of New York - (200.12c) - Not obfuscate any transactions - Bitcoin mixing would be illegal. (200.15f) I'm sure people will find a way around this pretty quickly, but it pisses me off Link to comment Share on other sites More sharing options...
GYre0ePJhZ Posted July 22, 2014 Share Posted July 22, 2014 Yeah, it is disgusting. I enjoyed Bruce Fenton's take on it: I’ve warned people repeatedly about the fact that regulators are not our friends – so the onerous proposal came as no surprise. Many Bitcoiners seemed shocked and caught off guard that the proposal could be so unrealistically strict. Some examples include Bitcoin companies being unable to retain profits in Bitcoin, requirements that small startups hire expensive compliance personnel, requirements that inventors and programmers obtain a license before creating new alt coins, rules which would essentially end mining etc. The regulations are at the core a thinly veiled ban of Bitcoin in New York. Strangest thing is that Satoshi can be defined a criminal now depending on the interpretation of the legislation. Do you live in New York Kevin? Link to comment Share on other sites More sharing options...
Kevin Beal Posted July 22, 2014 Author Share Posted July 22, 2014 Do you live in New York Kevin? Nope. I live in Northern California. Link to comment Share on other sites More sharing options...
Duderio Posted July 22, 2014 Share Posted July 22, 2014 goodbye Link to comment Share on other sites More sharing options...
DaVinci Posted July 22, 2014 Share Posted July 22, 2014 Not a surprise. This was bound to happen. I'm honestly surprised they haven't just completely shut this down like that Von Notthaus(?) guy. Link to comment Share on other sites More sharing options...
Kevin Beal Posted July 22, 2014 Author Share Posted July 22, 2014 I don't understand your anger. I mean the world population is hostage/political prisoners of the US. NSA already surveils everything. What else is new. BitCoin realists predicted this. You're right. I don't have a good answer for that. Link to comment Share on other sites More sharing options...
cherapple Posted July 22, 2014 Share Posted July 22, 2014 I'm in New York, and the regulations have put a damper on my Bitcoin enthusiasm. Apparently, it only applies to exchanges and doesn't affect merchants. The people in my Bitcoin meetup group responded to my fears by saying that this is not bad news because "merchants will feel better knowing that Coinbase and Bitpay are following these regulations." The hubris of people trying to enforce regulations like this is sickening. It shows more than ever how much state sociopaths think they own the right to take and destroy the value of things they did not create. And how much an even greater number of people will agree, and they'll hand over their identities and their bitcoins and call the theft "good." It is not a surprise, but that doesn't make it less revolting. I don't understand your anger. I mean the world population is hostage/political prisoners of the US. NSA already surveils everything. What else is new. BitCoin realists predicted this. That's like saying you don't understand people feeling anger about abuse because children are hostage to abusive parents everywhere. Kevin, your anger is perfectly rational. 2 Link to comment Share on other sites More sharing options...
Duderio Posted July 22, 2014 Share Posted July 22, 2014 goodbye Link to comment Share on other sites More sharing options...
AustinJames Posted July 22, 2014 Share Posted July 22, 2014 I don't know much about BitCoin, but the little I do know seems to indicate this type of regulation would be unenforceable. Why wouldn't all BitCoin transactions just slip quietly into the black market? Can someone who knows more about the intricacies of BitCoin please explain how it would be possible to enforce this law? Does it rely on people being afraid of investigation and prosecution? Link to comment Share on other sites More sharing options...
J. D. Stembal Posted July 22, 2014 Share Posted July 22, 2014 This is why I'm more enthused about hedging against inflation with precious metals rather than BTC (although I own alt coins). Having a nest egg of BTC is next to useless if the government shuts down all the exchanges and confiscates the information (see the Silk Road debacle). I can bury my metal specie out in the woods somewhere and no one will ever find it. Link to comment Share on other sites More sharing options...
cynicist Posted July 23, 2014 Share Posted July 23, 2014 I don't know much about BitCoin, but the little I do know seems to indicate this type of regulation would be unenforceable. Why wouldn't all BitCoin transactions just slip quietly into the black market? Can someone who knows more about the intricacies of BitCoin please explain how it would be possible to enforce this law? Does it rely on people being afraid of investigation and prosecution? Yes it's quite funny to read. How exactly would they be able to confiscate the coins? There are no technical means by which they could actually implement any of this so I assume they would be relying on the threat of jail time to get compliance. Of course even associating wallets with people would be tricky, especially if the user has knowledge of the technology to any degree. (which is why they are requiring registration to purchase coins) Say for example that I create a new bitcoin address and transfer funds to it. This is indistinguishable from a transaction between two individuals. So how could they know that I own both? At best they could watch for patterns like transfers occurring between the same two addresses consistently. (which is why the recommendation is to use a new address for every transaction to avoid this kind of tracking) This is why I'm more enthused about hedging against inflation with precious metals rather than BTC (although I own alt coins). Having a nest egg of BTC is next to useless if the government shuts down all the exchanges and confiscates the information (see the Silk Road debacle). I can bury my metal specie out in the woods somewhere and no one will ever find it. If the government shuts down exchanges it doesn't do anything to the coins you possess. (just like shutting down gold providers doesn't affect your stash of gold) I can bury the hard drive containing them in the woods as well, but there are much better ways of securing bitcoin. The government confiscated the coins held by Silk Road, but one advantage over precious metals is that they couldn't take Ross Ulbricht's (owner of the site) personal stash of coins because his wallet was encrypted and they didn't have the private key to unlock it. Not encrypting your digital wallet is like leaving a real physical wallet on a bench somewhere. It doesn't sound as impressive to 'confiscate' a wallet that someone left unattended, does it? Link to comment Share on other sites More sharing options...
jacbot Posted July 26, 2014 Share Posted July 26, 2014 Funny critters these politicians. unless someone has your private key, nobody can touch your assets, and how ill they prove you own it in the first place?, if you stay withing the bitcoin space they cant do anything. I dont believe this is about bitcoin,.., bitcoin was a nice trial baloon to test the waters as it were. The next one will be more weaponized. (ethereum). Link to comment Share on other sites More sharing options...
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