California Accuses Bitcoin Foundation of Unlicensed Money Transmission

The Bitcoin Foundation has published a reply to the cease and desist order that the organization received on May 30 from California's Department of Financial Institutions. The cease and desist order was a vague one, telling the foundation to "cease and desist from the business of conducting money transmission in this state" without specifying what the foundation was actually doing that qualified as money transmission. There was little to go on; the Bitcoin Foundation is simply an advocacy organization that "standardizes, protects and promotes the use of Bitcoin cryptographic money for the....

The State of California has passed legislation that should make it easier for bitcoin startups to do business in the state. AB 786, passed in the house last week, amends the California Money Transmission Act with some key provisions. The state's original Money Transmission Act (MTA) classified certain companies doing business in California as money transmitters, imposing stringent requirements on them before they could do business in the state. This legislation is enforced by the Department of Business Oversight (DBO), part of which until July 1 was known as the Department of Financial....

California’s AB 786, a piece of legislation that will make doing in-state business easier for Bitcoin startups, passed in early September. This amends California Money Transmission Act with a couple of key points: Businesses that pay their employees’ salaries in Bitcoin might qualify for a payroll exemption. Minimum capital requirements are reduced for a Bitcoin startup that operates in the payments or remittance markets. The MTA initially imposed strict requirements on California-based business classified as money transmitters, and these are enforced by the Department of Business....

A new report is surfacing suggesting that former BitInstant CEO and member of the Bitcoin Foundation Board of Directors, Charlie Shrem, is expected to plead guilty to unlicensed money transmission next Thursday in New York Federal Court. The report comes from Reuters Friday evening, citing Shrem's attorney, Marc Agnifilo, as the source of the news. Previously, Mr. Shrem has pleased not guilty against the counts against him, of which include running an unlicensed money transmitting business, money laundering (in connection with the now-defunct original Silk Road illicit marketplace), and....

The Bitcoin Foundation took a decisive turn in its strategy for defending Bitcoin three weeks ago when the organization wrote its reply to a cease and desist order from California's Department of Financial Institutions. Rather than meekly asking the government how the nonprofit advocacy group was acting as a money transmitter, the organization delivered a seven-page reply in which it laid out an argument that not only was the organization itself not doing selling bitcoins in any way, but in fact even if the organization was selling bitcoins the act does not constitute money transmission....