A Bitcoin service suspended by state of Virginia

Governments are terrified of Bitcoin and are trying to destroy the value by eliminating providers of liquidity. No buyers, no value. As to some of the comments stating that they have not been "suspended by the state" - that is a disingenuous argument that only a lawyer could love. The state sent them a letter accusing them of violating laws that carry the organizational equivalent of the death penalty, and possible jail time for the founders. It was intended to threaten and intimidate them into suspending operations, and it worked.

This is a pretty bad headline. First off, there should be a article in there, like "A Bitcoin service". Secondly, the service appears to have been shutdown to protect the owners/operators of the site from further legal action. They are not being forced to close. The state thinks they need a license and they think they don't. Instead of risking jail time on the possibility they don't need a license, they are taking the cautious route and shutting down until the legal issues are resolved.

&#62;<i>Effective the May 31st, 2013 Tangible Cryptography has suspended new purchases of Bitcoins through our service FastCash4Bitcoins. We take this step in response to a notice received, the same day from the Commonwealth of Virginia, that a complaint has been made that our company is operating as an unlicensed money transmitter.</i><p>Note that they're basically acting as the middle-man, not storing anything - I'm not really sure how the terms work in this situation. They seem to think it doesn't apply, maybe they're right.<p>It sounds like they did this <i>voluntarily</i>, and they go on to explain there have been no freezes, and all transactions have been completed. Probably a good choice (IANAL of course) while they mount a defense, which it sounds like they plan to do.

It sounds like they are voluntarily suspending service until this is sorted out. Virginia has given them 30 days to explain why they think this doesn't apply to them.

Assuming that OP was simply buying bitcoin (and nothing else...i.e. not automatically selling on an exchange on the backend or something...), then this could be a big shot to Bitcoin.<p>Unlike other recent headlines (around i.e. Mt. Gox, etc.), it seems like the question here is whether or not bitcoin constitutes "stored value" under VA law[1]. If so, this would render anyone who buys and sells bitcoin a Money Transmitter Business.<p>That said, I doubt FinCEN would consider Bitcoin "stored value" based on their definition [2] and recent "guidelines".<p>Stored value laws were created for things like prepaid cards (I believe...[3]), which were cracked down on because of their role in money laundering.<p>[1] <a href="http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+6.2-1900" rel="nofollow">http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+6.2-1900</a> [2] <a href="http://www.fincen.gov/financial_institutions/msb/definitions/stored_value.html" rel="nofollow">http://www.fincen.gov/financial_institutions/msb/definitions...</a> [3] <a href="http://www.gpo.gov/fdsys/pkg/FR-2011-07-29/pdf/2011-19116.pdf" rel="nofollow">http://www.gpo.gov/fdsys/pkg/FR-2011-07-29/pdf/2011-19116.pd...</a>

one unlicensed money transmitter is being suspended, not all bitcoin services and not the entire state of VA.

Say a Craigslist service exclusively for bitcoin. Would the glorious state of Virginia have a problem with this?<p>An eBay auction exclusively for btc? Where service wets beak with $$ only, or also/with btc micro payments? A problem?

I just really liked this quote in the comments because it made me chuckle -<p>"You don't get into positions of power of life and death over proles by being ignorant, only acting as if you are, which is genius-level sociopathy. If you REALLY try it sometime, you may just become the President of the United States, and have the power to slaughter babies in the Rose Garden in front of the world's press, and not suffer any real punishment whatsoever."

Welcome to Canada, where bitcoin exchanges are not subject to FinTrac Money Transmitters regulations. Yet...

Bitcoin supporters on HN:<p>One thread: Bitcoin is the future of money<p>Other thread: Bitcoin is not money, so why apply money rules?<p>It either is or isn't.

How they can ban bitcoin use in an state?