I'm surprised that Ripple didn't register with FinCen. It's not hard.
After registering, a US money service business has to file reports on "suspicious transactions". This is done electronically, although the data formats are incredibly antiquated.[1] Each record is like a 1000+ column punched card, and they're filed as big batches. On the other hand, there's not much of an attack surface against FinCen, and since their opposition is drug cartels, that's an issue.
I think it's not such a rudimentary and obvious question whether they are a money-service-business or not. Their argument would be that they are only providing a protocol, and those using the protocol are money-service businesses.
The counter-argument of course being that they are charging XRP for use of their protocol ergo: money-service-business like any other.
On the other-hand what about Bitcoin in that case? Is Gavin Andresen running a money-service-business because he's developing a protocol? Are the miners because they are collecting transaction fees?
In Bitcoin, I'd argue the developers have the status of a bank's software developers, i.e. no direct responsibility. If anybody were to be regulated it would be the miners and/or pools who actually process transactions and create blocks containing them.
Surprised does not come close - the list of deeply connected investors is long (AndresseenHorowitz, GoogleVentures) and yet the phrase "MoneyServiceBusiness" did not cross anyone's mind?
Is this CEO ignoring good advice or fire and forget investors ? Or perhaps even more worryingly, a disconnect between Silicon Valley investors and the FinTech regulators in the East Coast - those three thousand miles will take a lot of bridging.
A bit of history on this ruling will be interesting.
Then the place to discuss that is in the political arena.
Violating regulations because you think the regulations stink, the regulators are wrong, they shouldn't apply to you, whatever, is wrong.
We probably all agree here that dumping mad pollution into the air is a bad thing, and that regulation should be obeyed, but all it takes is one factory owner deciding that that regulation sucks, and the air's unbreathable again.
Yes, the place to discuss it is in the political arena but whether you can change it in any significant way without the expense of significant resources is questionable.
There are many regulations that serve effectively to support a monopoly / oligopoly by installing market entry barriers (Taxi, TelCo, founding a bank).
Price controls effectively are regulations that can influence the well-being and survival of many people and in the years after WW2 the Germans were practically forced to break the regulations (against Reich and Allied law) in order to survive. You think they did wrong?
I also think that you (and everyone) should try to follow the laws (laws = regulations and much more) as much as possible as long as you do not believe they are unacceptably unjust. The dilemma between justice and law is itself a recognized part of law philosophy https://en.wikipedia.org/wiki/Radbruch_formula
I fully agree with your last sentence but even here I must ask what regulation is good for if people don't or cannot abide or it's not enforceable?
Depends entirely on the effect of the regulations. You could describe the divisive racism laws of the past in USA as regulations, wouldn't it be better to break them anyway? Do no harm, law or not.
Still, if you break a law, you should face consequences, whether you're doing right or wrong. That's the point of civil disobedience - willing to accept the punishment for going with your conscience.
Then there's a difference between breaking the law out for moral reasons and breaking them because they're inconvenient and you could profit more by ignoring them.
And for each of your scenarios I can invent two in which your actions are just parasitic, in which you freeload on your community. It's easier to make a profit when you don't play by the same rules as everyone else. Also, if you run a startup, you're likely not struggling to feed your kids, so the moral picture you're painting does not apply.
And since all laws aren't good, people who break laws should not have to ever go to jail. Just fine them instead, regardless of the law, because some laws are bad.
I don't think throwing people in jail accomplishes much of anything. The US has enough control over the banking system to just shut down companies if they misbehave enough, and freeze/reclaim assets if the company was "willfully negligent"
No, I mean what I wrote. Laws are coordination mechanisms and exist for a reason. Good or bad, they're needed or the community destabilizes as bad actors start to abuse the rest. Not every law is good and while there are mechanisms to realign them with the needs of a community, ignoring the law just because you can get more profit by doing so is not a way to go, it's a fraud and a malicious action towards your community. Doubly so if you're such an asshole about it as Uber is.
Why are bad laws needed? Surely that's the problem. And what mechanisms for "realignment" do you have in mind?
The relevant money transmitter laws in the USA take at minimum several years and millions of dollars to comply with, without any really good reason. The evidence that they achieve anything is minimal (try finding good academic studies of this - it's an exercise in frustration). There is NO way to reform them because the laws are highly open to interpretation, and the regulators who apply them freely admit that they pretty much do whatever they want with applicants:
US money transmitter laws have created a kind of death spiral where regulators see startups as dangerous (they explicitly say that in the article), make it difficult for them to get licenses, and so the entire market ends up owned by stagnant incumbents. There is then nobody left to lobby for changes to the laws, and big entrenched interests who don't want competition, thus it's impossible to get reform.
its a dangerous position, if people start to find courage from Uber...You don't go to jail for decades for exercising regulatory arbitrage when taking paid rides in your car.
Uber has already been shut down in France, Germany, South Korea, India, Spain, Nevada, South Carolina, Florida, and Kansas. California will require Uber to get commercial insurance, and probably commercial plates, effective July 1. Uber in New York City was forced to comply with NYC's regular taxi and limousine rules. Uber's "we're just a data service" claim did not work for them. They're just another car service now, better organized than most.
I see a very similar thing in the Bitcoin world. Build something, ignore all regulations, get VC, get big, then write your own regulations that advantage you relative to "legacy" businesses.
"I see a very similar thing in the Bitcoin world. Build something, ignore all regulations, get VC, get big, then write your own regulations that advantage you relative to "legacy" businesses."
Bitcoin business strategies run more to "take the money and run". Running a honest exchange isn't very profitable, because you're in competition with no-fee crooks. Coinbase doesn't charge merchants until they do at least $1M in business, and few merchants have reached that level. NewEgg and Overstock reported that their Bitcoin business was much lower than expected, and have backed off on promoting Bitcoin.
"Oh look! Archaic municiple rules is attempting to block us! This must mean we are disrupting them, and the fact we have users shows that all these evil municipal rules should be ignored!"
It crossed their mind quite a bit. Constant topic of conversation - the implication here that it's "easy" to file as an MSB is ridiculous. It's easy to file, harder to "be".
Is this distinct from a money transmitter? I know transmitters must be registered in each state that a user might originate from, and each registration costs around $50,000.
Yes, it's distinct. FinCen is only about money laundering. Money transfer licensing is about the money transfer firm not stealing your money. California is particularly strict about this, because so many people in California are sending money home to Mexico, and there have been some bad actors.
If any of these Bitcoin operators were serious, they'd register with the SEC as broker/dealers and as exchanges. That covers the whole US; no need to deal with individual states. Every stock broker does this. Customers then get investor protection - SIPC insurance up to $500,000 if the broker goes bust. That works quite well. Even Madoff's investors got everything back up to $500K, and slowly, the SIPC has clawed money back from the "winners" of Madoff's Ponzi, Overall, Madoff investors now have about 50% of their money back. Investor protection doesn't mean you can't lose money through investment risk, but it means that you're protected from theft by the broker, for both cash and securities held by the broker.
So why don't Bitcoin startups do that?
1) The broker has to pass background checks (Roger Ver has a criminal conviction and would fail.)
2) There are financial strength requirements (if you're handling millions of other people's money, you need to have a few yourself).
3) There are detailed accounting, audit, and reporting requirements.
4) FINRA can fine brokers for violating the rules for brokers. About once a day, FINRA takes disciplinary action against some broker.
5) There are exams to work in a brokerage. Individual brokers must pass the FINRA Series 7 set of exams. There are exams for top management, for inside auditors, and even for customer service reps. (Customer service reps have to know what they are and are not allowed to do.)
6) Segregation of customer funds from brokerage funds is required. (MF Global didn't do that and went bust. The case against their CEO is still in discovery and he may yet go to jail.)
Until Bitcoin startups start doing this, it's still amateur hour.
The AML laws require that you be a licensed MSB in each state that you operate in though (in the USA). Filing with FinCEN is indeed easy, however, it doesn't really accomplish anything. The requirements themselves are entirely subjective and almost impossible to comply with if the regulators in question decide they don't like you.
For instance: take the requirement to report "suspicious" transactions. What does suspicious mean? It's left undefined. In practice, suspicious means any transaction the government doesn't like, and if it decides that retroactively ...... well, now you have a pickle on your hands. It doesn't matter if you genuinely didn't think it was suspicious at the time because it's not you who get to decide.
So complying with this requirement effectively means an unlimited investment into analysts and risk managers (detectives) who try and spot anything that might be suspicious, and enforce US foreign policy via sanctions.
Coinbase are doing this. But they have tens of millions of dollars in venture capital to spend, and even then, I expect them to get fined/prosecuted/both at some point, simply because it appears to be impossible to run a financial institution in the USA without that happening.
If you just send the transaction and customer data for every transaction over $2000 to FinCen, you're good. Now that they accept this as a data file (they were accepting paper until a few years ago), there's no problem doing that.
That's not correct. You are expected to file SARs, but only for suspicious transactions (you have to specify why they are suspicious on the form). You can't just blindly upload every transaction to FinCEN and have discharged your responsibilities. The laws are much, much more complicated than that.
Of regulators though, FinCen has more presence than most on the West Coast. It's not a foreign concept, especially once you realize how Visa et al. are headquarted in SF as well.
Your comment on Fincen infra is on point. Its sometimes tragic to see that an org directing enterprises to provide confidential info on money launderers/terrorists sets such low security specs for setting up the info transmission. http://bsaefiling.fincen.treas.gov/Why_use_BSA_004.html
>"Pursuant to the agreement, Ripple Labs will also undertake certain enhancements to the Ripple Protocol to appropriately monitor all future transactions."
Can anybody from Ripple comment on what those protocol changes will be?
I wonder how sustainable this is in the long-term: trying to shut down every website/protocol where imaginary numbers that are valued by multiple people are hosted.
You police the interactions between the virtual currency and $COUNTRY banking system. To have any real liquidity, such exchanges need to have valuable reputation, i.e, be organisations subject to the law.
Yes, you can launder money through World of Warcraft but the payments usually go through Paypal. Online poker is another obvious way to launder hit hard by KYC.
This will only cause people to flee to the virtual currency and stay there, over time. It literally incentivizes staying in the virtual currency... just like people like to "stay" in cash, now (in fact, just today a contractor offered me no tax if I paid him cash...)
How the powers that be do not see this, astounds me.
As soon as the first cryptocurrency acquires some semblance of price stability, it becomes more dangerous to the old system.
Given 2 options, one with a lot of friction and one without, no matter the "marketshare" of the first, the latter one will eventually win.
The only way fiat can prevent this is to stop punishing good actors with AML/KYC compliance.
The fact that these laws still refer to and try to regulate geographically-focused transfers of money (which make literally no sense in an Internet cryptocurrency context... If I fly in a plane and have a Bitcoin wallet app on my phone which gives me access to spend 15 grand worth of Bitcoins anywhere (including ON the plane, if it has wifi), do I have to "declare" the "carrying" of more than $10,000 "cash"?) shows how behind-the-times this worldview is.
"This will only cause people to flee to the virtual currency and stay there, over time"
Only if they can actually do stuff with that virtual currency in the real world, like pay rent and buy food. Otherwise, not so much.
"Given 2 options, one with a lot of friction and one without, no matter the "marketshare" of the first, the latter one will eventually win."
This isn't always true.
"The only way fiat can prevent this is to stop punishing good actors with AML/KYC compliance."
As has been posted, it's not that hard to comply. And if they want to act like a real currency, then they should be following the same regulations as real currency.
You're describing one trip through "the loop". Remember, the state will react to crypto growth too.
There's a transitivity aspect to it. Ultimately taxes need to be paid in fiat, and large organisations will eventually get stomped on for accepting crypto if it subverts government control.
On the second trip through the loop, you have crypto which can be used for small (in a sense, black market) transactions and fiat which can be used to pay things like utility bills or buy stuff from companies which must accept fiat. Individuals will provide exchange services (buy iphones with crypto!) at their own risk, basically by subverting KYC with small transactions. [We are already here].
What's the nth trip through the loop? I'm personally not sure, but interested in your views.
> Ultimately taxes need to be paid in fiat, and large organisations will eventually get stomped on for accepting crypto if it subverts government control.
Ultimately global trade will have to occur in the global currency, and governments large and small will eventually get stomped on for accepting only their local currency if it subverts international consensus.
The USD is a pretty lousy global currency. You can't exactly use it anywhere in any sort of transaction. I've only ever heard of a handful of places outside of the States where the local currency is terrible enough that local people prefer to hold and transact in USD over long periods of time. A true global currency would be one that you could use to buy practically anything, anywhere, whether it was a very large or very small transaction.
Regardless, Bitcoin has several advantages. For one thing, you're not dependent upon continually obtaining a flow of paper notes from a foreign country that may lie halfway around the world. For another, you can divide Bitcoin to extremely small and precise quantities - the dollar on the other hand doesn't scale as well to economies where a penny may start to approach a significant individual unit of money.
There are of course many other advantages of Bitcoin that make it attractive for people in many different countries to adopt. The fact that you can transmit and receive it to and from anywhere in the world, with the same certainty of transaction confirmation as cash in hand, without the need to either physically ship cash or rely on a network of physical cash shipment, is a pretty good one, especially as the world grows ever smaller.
A final advantage would be that you are never hostage to the political dangers of a nation-state controlled currency (i.e. a small group of rich white men can at any point decide to devalue your savings, to the point of destruction, by printing an unlimited amount of the currency.)
I am so glad people are starting to realize that what gives currency its values is that it, and only it, can be used to pay taxes, which are incurred in many transactions that don't even have to involve money.
At least in the UK[1], the value of currency is that it's backed by the courts, and therefore enforced by police:
> Legal tender... means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender.
In other words, any transaction not involving fiat currency can be legally transformed into a transaction involving fiat currency (which makes "backed by gold/silver/whatever" currencies like Liberty Dollar[2] meaningless).
Any transaction involving fiat currency which isn't settled can lead to legal punishment, ie. fines, prison, etc.
Any punishment which isn't legal (eg. taking the gold which is 'rightfully yours') also leads to legal punishment, so there's no way to "escape" the system.
> just like people like to "stay" in cash, now (in fact, just today a contractor offered me no tax if I paid him cash...)
I might be nitpicking, but people don't like to "stay in cash". They just like tax evasion. It's not about staying in cash or not, it's about the ability to underreport revenue without an auditable paper trail.
You know, if a contractor gives you an invoice, and you pay in cash, nothing actually prevents them from burning their copy of the invoice and saying it never happened if the IRS asks.
Source: I'm from a country where the grey market is very alive and very flourishing.
The whole point of money laundering is that permanent "staying" isn't very appealing: cash and BTC will get you a pizza delivered but they won't buy you a house, hence money launderers - generally dealing with larger sums than the average "cash discount" - being very keen to get the proceeds of their crime into the banking system.
And government regulators will be quite happy to make life more difficult for vendors as well as money transmission businesses if they start to worry that criminals are finding it too easy to spend their Bitcoins.
Organised criminals staying in BTC is not going to make the average person want to flee to it, it's going to increase their suspicion that Bitcoin's days of being a surprisingly friction free way of buying goods and services in their own country are numbered.
>How the powers that be do not see this, astounds me.
Because "fleeing to the virtual currency and staying there" has very small value and utility, unless you can at some point channel those money to regulated business and tangible goods...
I've worked with a lot of contractors. Invariably, if you bitch about guberment and then have a polite chat with the ones who make these kinds of offers, they're trying to get around paying taxes. This might be anecdotal, but it's not pure speculation.
You can disagree with the tax system in the US, but that doesn't make tax evasion legal.
As these virtual currencies become more practical as currencies, there will be less transactions between them and the banking system. It won't be immediately cashed out after the transaction as they are now.
As these virtual currencies become more practical as currencies, there will be less transactions between them and the banking system
Um... Just because they're virtual doesn't mean there's not a banking system and aren't subject to banking laws. Virtual currencies are well on the radar and being regulated just like non-virtual currencies.
Why would you say that? There are attempts to regulate them, but those attempts so far are mostly just succeeding in ensuring that the regulating districts become uncompetitive and virtual currency businesses leave for somewhere with better promise.
How are you supposed to regulate these services when anyone can open a Bitcoin bank and serve anyone anywhere in the world with an internet with an internet connection? If they couldn't stop movie piracy, how are they supposed to stop free global financial services? They have even less of a legal case to make for intervention than piracy!
>If they couldn't stop movie piracy, how are they supposed to stop free global financial services?
They could hit it really hard. They haven't stopped illegal images from being spread, but they have made it really rare except for the darkest corners of the web.
If by illegal images you mean child pornography, there's a few key differences between CP and Bitcoin. Namely: very very few people are into CP, while practically everyone who isn't an enthusiast is violently opposed to it. Therefore, law enforcement has a practical free reign to track down and destroy the lives of CP-sharers, and are actively supported and even acclaimed by the wider public for their actions.
The excuses for the prohibition of free financial services on the other hand are all basically covert attempts to protect the sovereignty of state military/police institutions, and do not actually align at all with the interests of regular folk. Plus absolutely everybody needs and enjoys high quality, unrestricted financial services.
So I see the chances of government attempts to suppress Bitcoin succeeding as more or less 0. What would be the grounds for it? Where would they gather the support that would allow them to openly violently suppress great swathes of people to try and keep it from happening?
It's even less likely to succeed than efforts to suppress copyright-breaking, because with Bitcoin there are no legitimate victims, it is only the state who will lose out.
In the past it was legal to produce and distribute it. Most people didn't care enough to stop it. In a relatively short time certain groups turned it from a 'meh, not my problem' to 'kill it with fire, nukes, lasers, and anything else we can throw at it'. They could potentially do the same to bitcoins. (You can even find there was a period where most all child abuse wasn't considered a problem, with one of the key cases of the era being a case where the lawyers for one abused child argued that the child should be legally considered an animal because at that time animals had greater protection). And the numbers of individuals into it are larger that most people realize (consider that 1 in 5 children are sexually abused by the time they reach 18 to know just how large the problem is).
Now, maybe certain factors like the potential demand growing for bitcoins would be enough to keep it from being banned. Also, even if you could get the public worked up about the topic, it is much harder to shock and awe them. What would a pro-ban advocacy group do, show numbers of wallets? And the ability for the government to scare people has taken a hit thanks to the backlash from the war on drugs.
There surely must be a very hard limit to the number of drug hitmen taking payment in WoW dollars?
I know that's a little facetious but "value" is almost entirely based in what a human can get out of it - and that is almost entirely in the real world.
If you want a fun summer project that will get you your very own casefile with various law enforcement and financial regulators:
Come up with a program that lets users manage multi-currency transactions with a basket of currencies ( game currencies, paypal 2 paypal balances, (bit|alt)coin, reddit gold, odesk credit, store credit balances (gift cards), und so weiter).
Extra credit if you can add constraint solving to defeat traffic analysis and reporting limits.
Technically legal to develop and give away if you are a US citizen; but probably a really bad idea to run as a web service unless you really like being a test case in federal court or want to become a spy for the FBI.
Sorry I am missing something. Multi currency transactions between wow currency and Starcraft currency? So I want to buy a spaceship using my guild gold?
But that implies some sort of exchange ? You could make a peer to peer thing for the actual transaction but the bid/ask must be public surely?
Throw in Walmart gift cards - aha do I see it now - all these things are convertible from dollars and so can be used to launder money ...
If so then I guess I don't care about an open exchange - I am going to own both sides of the exchange as a drug lord anyway.
But I presume this is less exciting as a money laundering setup as it is all traceable?
Well, anyone picking this up for anything other than intellectual curiosity is probably not a good actor.
I imagine that if you were serious about something like this you'd probably recruit a number of intermediaries to receive payments and acquire goods for you since shipments of high-thread count sheets are less likely to draw adverse scrutiny than significant flows of negotiable currency. If you want the real drug lord version of this read up about the Peso Exchange [0] which is a form of repatriating money from illegal proceeds that will never go away.
And rather than thinking of it as a strictly money laundering tool, think of it as enabling the "unsurveilled marketplace", not just drugs but the trade in items that are restricted in some jurisdictions, or for which specific efforts are being made to delegitimize preparatory to banning ( think tractor repair diagnostics without the snitch chip, or radar/lidar detectors, or any of a number of tools that could be banned as circumvention devices ).
The thing is that we all know that Anti-Money-Laundering efforts are inherently corrupt [1] and that only the little people ever go to jail for it.
In theory, a smart forward-thinking country could come along and look at themselves as a company/reserve and make a virtual currency + exchange that is desired because they will not touch it. They could create a killer currency, a neutral country that doesn't play in the theatre of games. Like the Swiss used to do with banking.
However banking is also getting more regulated. Money flow is living under a rule where "papers please" is the norm, untracked cash is suspect. Many of the excuses for this much regulation on a currency is the War on Drugs and the War on Terror.
The demand just keeps getting higher and higher for a killer currency.
The "killer currency" must reach a point where it is robust enough to withstand what Kroll, Davey, and Felten describe as a "Goldfinger" attack. [1]
They use basic game theory to show that any actor participating within the Bitcoin community would not commit a 51% attack. They go on to identify the biggest threat to a budding virtual currency: some outside actor being able to take a sufficiently large short position on Bitcoin (or otherwise gain utility from Bitcoin's destruction), then mounting or simply threatening to mount a 51% attack. This would start a death spiral that would cause rational actors not to participate in the network at an increasing rate.
They conclude that good, active governance is necessary to make sure that Bitcoin and similar virtual currencies survive.
The creators will need to "touch" the currency in order to protect and maintain its value. A true killer currency would be a virtual currency that is pegged to some well-chosen and largely diversified basket of essential goods such as wheat, lumber, metals, energy, etc. Peg the currency to a broad range of economic inputs and raw materials.
Any peg requires a trusted third party. It would be like tying gold certificate ownership to cryptocurrency tokens, like colored coins.
And when you have that trusted third party, why do you have independent miners? In other words, you get Ripple again rather than Bitcoin or an altcoin. You drop the decentralization.
I'm really confused on this. I thought that the IRS taxed cyrptocurrencies as property? If that's true, how is the "and selling its virtual currency, known as XRP, without registering" a problem?
I can understand the aspect of transmitting money and how that could get them into trouble, though.
One thing I've observed many times over the years is that the government likes to have its cake and eat it too. For instance, they ruled that gold coins were legal tender. Then one bright employer started paying his employees in gold coins from the US Mint.
If I give you 12 $50 gold coins that are legal tender, I've paid you $600 dollars, right? Say your salary is one of those a month. What should you claim as your income on your taxes? $600? That's well below the $4k and you don't even have to file.
But the IRS decided that it didn't matter that they were $50 legal tender, and took him to court where the court rules that the "value" of them was what mattered.
So here they are literally claiming it is one way when it's convenient to them and another when that is more convenient.
The laws are written, always, to give maximum power and flexibility to the government and little to none to you.
Expecting consistency out of them would be a mistake.
Various problems emerge when you dig deeper into this idea. Is the employer paying less than minimum wage? Presumably the employer buys each coin for >$1,000 and thus takes a massive loss by "selling" it to an employee for $50; is that an accounting problem? Presumably the employee takes their "$50" salary and sells it for >$1,000; is that not a taxable gain for the employee?
It's difficult to use that particular example, because in reality he was still paying them with cash, but just the cash value of the gold coins, rather than the gold coins themselves. I'm not disagreeing with you that the government wants to have its cake and eat it too, but so did that guy. Maybe the case wouldn't have been so clear-cut if he'd actually paid them in gold coins.
> One thing I've observed many times over the years is that the government likes to have its cake and eat it too
Just like the Bitcoin community, who to this day insist that Bitcoin is a legitimate alternative to 'cash money', then crow that they aren't subject to any of the existing laws governing 'cash money'?
Hello, I'm a Bitcoin community member, I can help clear this one up for you:
1) Bitcoin is claimed as a legitimate alternative to cash money insofar as: Bitcoin proponents believe that, if the world valued Bitcoin, it would function superbly as a money. So "legitimacy" here means "workable" or "beneficial" - it has nothing to do with legitimation by governments.
2) Many Bitcoin proponents are of the opinion that governments destroy wealth and hamper economic progress by trying to restrict and control the actions of people, in so doing preventing more organic and consensus-based mechanisms of social organisation emerging. Thus the argument that Bitcoin should not be subjected to existing cash laws is a) an attempt to prevent Bitcoin from early smothering by suspicious governmental authorities and b) an early-game strategy, the end game of which would be the significant or total disempowerment and/or disestablishment of government.
Just like the atheists, who to this day insist the lack of adherence to a religion is a legitimate alternative to spiritual guidance from the church, then crow that they're not subject to canon law?
Clearly, someone who is trying to pay their employees with gold coins is trying to evade taxes. Of the many grey-legal ways to avoid taxes, this one particularly shouldn't make a person indignant. Find other places to complain about the lack of empowerment of ordinary citizens which are a tad bit more reasonable.
I'm not following your argument. You have to pay taxes on gifts too, or barter. The gold coins are legal tender, and you have to pay tax on the value of the gift (the gold in that coin) you get.
Even you don't buy this argument. Suppose you have one of these coins. I offer you a $50 bill and aa $5 bill in exchange because I like shiny metal things. You refuse, even though I am nominally offering you a profit of $5, because you're not an idiot and like me, you value the coin for its gold content rather than its facial value.
'Legal tender' does not mean 'sole determinant of value,' only that you as a creditor can't reject it if it is tendered to satisfy a debt. If you legally owe me $1 million and offer to settle the debt with a giant diamond, I might take your offer but I'm not obliged to. But if you offer me $1 million in $100 bills I have to take it - I can't reject it on the grounds of inconvenience or anything else. But suppose you owe me $50. Can I require you to pay me with one of the $50 gold coins? No, I have to take a $50 bill if that's what you choose to offer.
OF course, you're referring to the case where Robert Kayre wwent ot prison for 15 years for tax evasion involving gold coins.
What actually happened was his workers would go to a warehouse, where they would receive gold coins (or certificates of ownership of same), which they would then immediately 'sell' - at the same location - for envelopes full of cash. Kahre's wife produced payroll sheets based on the cash amounts. However, employees were never issued W-2 or 1099 forms, for either the cash amounts or the gold coin amounts. Notably, any employees who opted to retain coins rather than sell them had the fair market value of the coin deducted from the 'amount owed' in their payroll records. Generally they didn't, so Kahre and his wife would keep recirculating the same gold coins over and over - withdrawing a bunch of cash from the bank, 'paying' an employee with coins and then 'buying' them back immediately with the cash, 'paying' the next employee with the coins they had just 'bought' and so on.
Kahre was doing this not only for his own business (a drywall/construction services company) but for a bunch of other businesses in his local area, for which he raked off $14 million in fees, but didn't see fit to file any tax returns documenting this fact. All told, the total amount of unpaid taxes in the case amounted to about $57 million.
This wasn't bright,it was fraudulent. there was plenty of notice that where the market value of an asset exceeded the face value (as of these coins) that the asset was taxable as property at the market value, going to back to well before the coins in question were issued. Kahre's legal arguments depended heavily on the fact that the matter hadn't been litigated in court before, even though similar matters had and even though there were clear rules promulgated by the IRS. On top of that, the actual mechanics of the payment operation made it screamingly obvious that the payments in gold were nothing more than a sham, using workers' brief physical contact with the gold coins as justification for not filing taxes while operating a parallel system of buying and selling the same coins over and over as an excuse for getting regular old cash from the employer to the workers.
If you actually think schemes of this kind make sense then you are a gullible person and I strongly recommend you avoid investing on the basis of these beliefs.
>But suppose you owe me $50. Can I require you to pay me with one of the $50 gold coins? No, I have to take a $50 bill if that's what you choose to offer.
Ah, but think of the fun case. What if I offer you the gold coin? Let's say you think it's illegal compensation, too far from market rate, and don't want to take it. You don't want any part in this mess. Does the law force you into it anyway? Are you obligated to take a $50 coin that costs thousands of dollars in taxes?
For a $50 debt, yes I am obligated to take it. But I won't owe taxes on the much larger fair market value unless I sell it, in which case I pay the capital gains rate at that time, but AFAIK I would have to declare it as an asset on my tax return - well, this might not be strictly necessary, but it would be a smart thing to do in case you tried to write off the fair market cost of the coin as a business expense with my name on it. For any debt larger than $50, even if it's exactly the fair market value of the gold coin as a collectible, no I don't have to take it.
You'd only pay that if you sold it at fair market value?
In that case what stops people/businesses from keeping the gold coins at face value, recirculating them and lowering their tax burdens? Let's say they only pay half of any transaction in gold, so that the dollar-value price is still inside market norms.
Economics. Most people are going to be offering you conventional cash so if you insist on paying in gold at face value then you've lowered the book value of your expenses. If you offer massive discounts contingent on being paid in $50 gold coins then yeah theoretically you could lower your taxes but a) you'd probably get audited sooner or later because other people are going to have to buy the coins and will then try to claim the market rather than face value as expenses, so there will be a steadily increasing imbalance between what they want to write off and the amount of income you want to declare, which will eventually send up a red flag. Also, if you pay bills at the face value then you'll be short-changing yourself to no good purpose, so you're going to want to sell coins regularly anyway and will become liable for the taxes when you do.
I meant the plan where there are discounts for partially paying in gold.
>you'd probably get audited sooner or later because other people are going to have to buy the coins and will then try to claim the market rather than face value as expenses, so there will be a steadily increasing imbalance between what they want to write off and the amount of income you want to declare, which will eventually send up a red flag.
It would send up a red flag, but could the IRS do anything as long as your gold-discount prices are still reasonable? Other than harass you with audits.
The goal would be to get it so that the coins are used at face value an average of 10+ times in a row, so there would not be a massive imbalance between the face value and what's written off. I'm sure there's a way to set up the incentives so it's cheaper to reuse the coin 98% of the time.
Mostly I'm wondering which category this scheme goes into:
* Blatantly illegal, will be shut down right away.
* Supposedly legal, will be shut down right away anyway.
* Legal, enjoy it while the loophole is rapidly amended.
It's almost as if the government as a social institution continuously and inexorably acts to expand and reinforce its power over society, regardless of any constitutional or rational or utilitarian grounds for its expansion... as if the people in government seek to reinforce and expand the job security and fiscal prospects of being an agent of government, regardless of whether their actions are welcomed by or beneficial to the people they are ostensibly meant to serve, or actually just ever more patronising and controlling overreach...
> I thought that the IRS taxed cyrptocurrencies as property? If that's true, how is the "and selling its virtual currency, known as XRP, without registering" a problem?
Because tax law and money service business law are completely different areas of law with different applicable definitions, such that what a particular thing is treated as for tax purpose has no bearing whatsoever on how money service business law regards it.
"and by failing to implement and maintain an adequate anti-money laundering (AML)
program designed to protect its products from use by money launderers or terrorist financiers"
I believe not implementing the AML program is the real issue.
I can see that you have gotten lots of responses about cake and eating cake and candies and sorts. In case you were looking for the direct answer> Selling is ok, Being in the business of exchanging (buying/selling) requires legal frameworks.
On September 30, 2013, XRP II negotiated an approximately $250,000.00
transaction by email for a sale of XRP virtual currency with a third-party
individual. XRP II provided that individual with a “know your customer”
(“KYC”) form and asked that it be returned along with appropriate identification
in order to move forward with the transaction. The individual replied that another
source would provide the XRP virtual currency and did not “require anywhere
near as much paperwork” and essentially threatened to go elsewhere. Within
hours, XRP II agreed by email to dispense with its KYC requirement and move
forward with the transaction. Open source information indicates that this
individual, an investor in Ripple Labs, has a prior three-count federal felony
conviction for dealing in, mailing, and storing explosive devices and had been
sentenced to prison, see United States v. Roger Ver, CR 1-20127-JF (N.D. Cal.
2002);
Oh! I've been waiting for a good place to ask this. I made www.stripepal.com as a weekend project. It's a super lightweight wrapper built on top of Stripe Checkout and Stripe Connect. Does anyone know if that makes me a money transmitter or money services business?
Short version: You're a money transmitter, and hence a MSB, if they determine that you're providing payment processing services w/o there being an underlying good/service which is being paid for.
Shorter version: Pick a different weekend project, or your successful outcome is "Stripe disables your account due to fraud risk."
You are as soon as they want you to be. I'm not being facetious. The laws, especially those relating to regulating finance, are written as broadly as possible to give them as much power as possible. If you hit their radar, they can send you away for a very long time.
On top of that, the legal system has little to no understanding of technology and it appears from the cases I've seen (as a layman) that the courts take analogies as fact. Thus if someone testifies "it's like doing X with Y" even though X is very different because it's digital than the literal concrete X, they take it at face value.
This is why scraping data on a public website is treated as if it was breaking into a computer system, because "its like trying all the doors and finding one that's unlocked and then going in and taking the houses contents, your honor!!!1"
There are multiple reasons that you should talk to a lawyer before going ahead with this, not least the cease-and-desist letter you are sooner or later going to receive from Paypal complaining about infringement of their trademark.
The test is whether or not the use of Pal is likely to cause confusion for the goods and services that the trademark was registered for. If this was a service to help you adopt a new puppy, there's little likelihood of confusion. However, if your company has "Pal" in the name and the explicit intent of the company is to provide financial services just like PayPal does, then yeah... you're going to get hammered. It's basically raising a giant middle finger towards both Stripe and PayPal.
Err, I certainly didn't mean to be raising any middle fingers. I've just always thought it was weird Stripe doesn't have a lightweight payment page, considering how simple it was to build this with Stripe Checkout and their automatic email receipts.
I've been sitting on this idea for almost three years, and with time it got so easy to build that I finally took a few weekends out. Here's a post from back when I'd have to build out the checkout experience and receipts myself: https://news.ycombinator.com/item?id=4507050
I'll have to look deeper into this trademark issue though. Anyone have any alternative name ideas?
If the names are similar and they are in the same industry/sector -- so that the typical consumer might confuse them -- then yes that absolutely can and does get attacked as a trademark infringement.
See Facebook versus Teachbook cough I mean Teachquest.
Or Microsoft versus Lindows cough I mean Linspire.
You've basically made cash.me - which is run by Square (squareup.com). And I have to agree with patio11: pat yourself on the back for being as smart as the bright minds Square, have a beer, then pick a new weekend project :)
IANAL. You're using Stripe Connect (and assuming you're doing this the old connect way), its your user's Stripe account that is processing the charge and receiving the money. Your Stripe account isn't processing the charge and nor sending them money hence you're not transmitting anything. Stripe would be the MSB.
This is the interpretation I'm hoping for. I am indeed using "the old connect way" (assuming you mean charging directly instead of through the platform). I wonder if taking a fee has an effect, though.
I pushed a question through to Stripe support. Will update here when I find out.
Even if you get the answer you want, talk to a lawyer anyway. It's not a good idea to just jump into the money transfer services market without a legal gameplan, any more than it is to buy a bunch of chemicals and go into the explosives manufacturing business, or buy a very high quality printer and go into the banknote printing business. IT's not that you're forbidden to run businesses of that sort, but that such businesses involve onerous licensing requirements.
Put another way, your minimum viable product requires some legal infrastructure, otherwise you'll probably discover the hard way that it is not viable after all.
Taking a fee should not have any effect. Stripe (like other providers on Payment Facilitator / Payment Service Provider models) protect you from this risk / compliance
Alternative advice from someone with an anarchistic bent: ignore the law and join the resistance against government. The more people who do it, the less power they have to stop it. People convincing themselves that they need to stay out of trouble and play by the government's rules is what Nietzsche would call internalising the slave mentality, and Foucault "self-policing."
Ripple is not in trouble for using some form of alternative currency. They are in trouble for facilitating transactions between other parties without keeping track of who those people are.
It's fun to pretend that the government is always completely arbitrary in its actions, but it isn't very realistic.
The point is that by manufacturing Tide, that was in some sense also "facilitating transactions". Where the line is drawn is pretty arbitrary and vague.
And in fact, if you read the article about Tide, the people who are buying Tide, no questions asked, from anyone who wants to sell it to them are committing felonies and are tracked down in sting operations.
Yeah sure. I'm not sure what the difficulty is, when I say "facilitate a transaction" I mean that there is a party with minority interest in the transaction (it ends up with just a fee) and that it does business with 2 (or more) other parties (that are presumably transferring an amount greater than the fee).
That is a pretty normal use of the word facilitate (involving an action in the middle of the other parties).
In the case of Proctor and Gamble, they end up with whatever price they charge for the Tide when they first sell it and (AFAIK) don't buy any of it. They do business only as a seller and keep their profits.
So sure, the existence of bottles of Tide does in fact make it possible to use bottles of Tide to transfer value. It does not however implicate Proctor and Gamble as a party to each of those transactions. In the case of a company that makes a business out of receiving value from one party and transferring it to another, they are naturally implicated in every single transaction that they participate in.
IF you think back to the days when the USA was founded, there was a great many risks facing the new government-- British spies could have been sent to undermine it, criminals of all manner and sort were out there as well. There were any number of excuses to make banks register transactions, limit ownership of firearms, control speech to stop anti-american and pro-british propaganda and the like.
But they didn't. In Britain, they saw the result of onerous regulations piled on top of each other for decades--- always with good excuses and claims of noble intentions-- and how it stifled the spirit.
As a result they fought, and then they went thru two forms of government in rapid succession ending up with the constitution which was only able to be passed after the Bill of Rights was added.
One of the arguments against tacking on the bill of rights was that by naming these rights they would be limited, and no mere 10 amendments could encompass all of mans rights. Thus, if you read the preamble to the bill of rights you'll notice a curious phrase that makes it clear that the rights are not granted by the constitution and not subject to its interpretation, but universal and pre-dating the constitution.
They chose freedom.
In the past 14 years, since 2001, but also since WWII, 1915 and the civil war to different degrees, we have seen our rights eroded, repeatedly and in small increments. Since 2001 it's been fast enough to be shocking to me, but at this point a 20 year old probably has never known a world without mass survielance.
My point is, people can talk about "money laundering"[1], terrorism and tax evasion-- these are all excuses. (There weren't even federal taxes before 1915, and for good reason. It took a constitutional amendment, which some debate was never properly ratified, to even get them.)
If the USA doesn't turn around and start embracing freedom, then more and more quickly we will slide to the despotism that caused use to leave the British in the first place.
Only in this age there are no colonies-- but there is cyberspace.
When bitcoin is illegal, only criminals will have bitcoin. When the black market grew to a certain size, the USSR fell. There's, in fact, an entire revolutionary movement[2] whose goal is to build and grow a black market to such a size that it forces the government to reveal the violence "inherent in the system" as Monty Python put it.
IF you're a frog in a pot of water, would you rather think of it as a hot tub or leap out into the fire?
[1] Literally a thought crime, that at the federal level is so broadly written that if you transfer money from your checking account to your savings account in order to pay your visa, you're guilty. IT's a catch all that wins convictions, never mind legal or moral principles.
[2] Counter-Economics, which came from the counter-cultural era, but is taking form more and more technologically these days. Google New Libertarian Manifesto by SEK3
It's more than a little ironic that you're posting this on the internet. People were using your same argument to argue that DARPA never should have funded the creation of the internet in the first place.
Unfortunately for your argument, most people want the benefits the government can provide. They want to be protected from things like money laundering and fraud.
I agree the government over steps its boundaries sometimes, but there's no need for the hyperbole. This is hardly on the same level as the NSA wire taps or the stuff that led up to the American Revolution.
> It's more than a little ironic that you're posting this on the internet. People were using your same argument to argue that DARPA never should have funded the creation of the internet in the first place.
1. There's nothing wrong with using something you paid for, while also thinking you shouldn't have been forced to pay for it.
2. A much smaller government would still be able to fund research and development. Most states could fund DARPA.
In general and in specifics, not even the founding fathers agreed on the appropriate trade-off between security and personal liberty. Perhaps the one thing they did agree on is democratic self-governance and the rule of law.
There were numerous Federal taxes before 1915. Federal taxes on imports were imposed around 1790. Federal excise taxes on domestic goods soon followed, although they were quite unpopular in some circles (Google "Whiskey Rebellion"). Various such taxes came and went many times between then and 1915. There was also a Federal income tax for a while in the mid 19th century to help fund the Civil War.
Auto-correct strikes again. I've edited to fix, because it was a stretch to use that phrase anyway. For those who aren't familiar I'm making a reference to a Monty Python skit.
So, if it's not clear- sometimes I'm baroque- in this situation I'm sorta being Dennis the Constitutional Peasant here. EG: I'm making fun of myself with the reference.
Don't forget that "they chose freedom" for a population of 2.5 million people[1]. That's less than Chicago or Nevada, today. The original thirteen colonies had a population density slightly lower than Wyoming.
The whole idea that the Founding Fathers had some perfect vision has always struck me as absurd. Even ignoring technological advances, the country now has more than 100x the population crammed into 9x the space. They made decisions for a country that is vastly different from what we have today.
Every generation says the next generation is worse. It's actually true.
Western civilization reached it's peak right around 1776, the height of the Enlightenment, and it's been going downhill since then.
Every generation is worse than the last, and Western civilization will not last much longer unless the trend reverses.
You can't turn the United States into a Hugo Chavez-style system and expect a different outcome than the one in Venezuela.
Western Europe is more robust to socialism because the culture within each country is so homogenous, but even they won't be able to last forever. Especially with crackdowns on free speech.
> Every generation says the next generation is worse. It's actually true.
Every generation has said that since, at least (judging from the earliest documented case I'm personally familiar with, which is no doubt many generations from when the trend started), the time of Plato.
> Western civilization reached it's peak right around 1776, the height of the Enlightenment
[Considers status of the Atlantic slave trade, position of women in society, etc., in 1776]
Um, no. Just no.
> Every generation is worse than the last
Its really not.
> and Western civilization will not last much longer unless the trend reverses.
Western civilization isn't on any trend to disintegration, even if you may not like its current organization.
> You can't turn the United States into a Hugo Chavez-style system and expect a different outcome than the one in Venezuela.
In what meaningful sense is the United States a "Hugo Chavez-style system"?
> There existed societies without slaves, and multi-cultural cities were everybody got along, milenia before the "Atlantic slave trade".
The first part is true, but irrelevant. 1776 is the point that was proposed in the post I was responding to as the peak of Western civilization.
(Whether "multicultural cities where everyone got along" can be anything but hyperbole for anything that has ever existed is another question, but also irrelevant.)
> So it's not a great example of something that "got better as things progressed".
It wasn't offered for that purpose. It was offered -- as the direct quoting of the claim about the 1776 peak that preceded it should have suggested -- to counter the idea that 1776 was the high point of Western civilization.
> [Considers status of the Atlantic slave trade, position of women in society, etc., in 1776]
> Um, no. Just no.
It was the Englightenment that made the end of slavery inevitable. For instance, it is written into the US Declaration of Independence that all men are created equal and have rights. That made it inevitable that the US would eventually outlaw slavery in its territory (i.e., as soon as it would be possible for the majority of the country to force the minority---and they did, at massive expensive of lives and material).
And it's not like the idea that all men are created equal was originated by the US Founding Fathers---it wasn't. It was part of the cultural mileiu at the time. It was a recent discovery. The United States was not responsible for the Enlightenment; it was a product of the Enlightenment.
So, your comment is incredibly ignorant and couldn't be more wrong. You are trashing the very time period that ended slavery.
Ignore history and you will be doomed to repeat it. (The Germans and the Russians did just that---creating new forms of slavery.)
I'm not interested in arguing the rest of your points. The evidence is out there if you care to look and think.
edit: So, I think I was too harsh on you, dragonwriter. I don't want you to think I'm a giant dickbag. Going to Hitler AND Stalin that quick is kind of crazy. I still think what I said, I just think I was being too aggressive.
Also, if people in Plato's time thought every subsequent generation was worse, they were probably right---at some point, the populace was so degraded that they actually would listen and seriously consider that old bastard (Plato). I'm half-joking here, of course. He did delimit all the important philosophical questions---he just got them all wrong.
Your claim was that western civilization peaked in ~1776. Peaking implies it hasn't improved since then. But those egalitarian values are significantly more well-applied today than they were then. Isn't a world where egalitarianism is applied better than one where it is merely known?
I am not an egalitarian. I am for equal rights. Egalitarianism is the belief that all people should be equal in all things. It leads to socialism, which leads (eventually) to Venezuela (for example) as people cannibalize one another.
That's not, necessarily, what egalitarianism means. But regardless of words, why do you think a world where equal rights actually exist (or have more actual existence) isn't better one where the idea of equal rights is merely known?
Americans had far more rights in 1788, as long as they weren't slaves [1]. And in 1788, people from anywhere in the world could escape to America (as it should still be).
[1] Many Americans were against slavery in 1776, but it would have meant losing the Southern colonies and thus losing the Revolutionary War.
edit: I picked 1788 because that's the year the US Constitution was adopted.
> Americans had far more rights in 1788, as long as they weren't slaves
No, they didn't. Even white male Americans didn't have more rights in 1788. The federal government, true, had smaller scope, but there were, for example, fewer rights protected against infringement by State government than now.
What rights did women not have in 1788 that you would want them to have? They couldn't vote, but voting isn't a right. They could own property, for example.
Once married, they became basically legally merged with their husband, but I'm not sure what it would mean to share a household in 1788 and not have joint ownership of things.
update: In fact, they would have been covered by all of the bill of rights, including 9 and 10, which we are not covered by today and which are really the most important ones. So I think I was probably right in my original statement, even including women. I mean, I'm not an expert on femininity in the 18th century, though.
update2: And you want to know what my omission says about me? It says that I think of people as people, rather than dividing them up by gender. I am not a feminist---I believe in equal rights for all people, not priviliges and special treatment for women.
> What rights did women not have in 1788 that you would want them to have? They couldn't vote, but voting isn't a right.
I think that most people today -- and most of the founders that you seem to deify as paragons of philosophic virtue -- would recognize both the right to participate in the government to which one is subject (the basis for the slogan, "no taxation without representation") and the right to equal treatment under the law -- both of which women did not have in 1788 -- to be moral rights. Certainly, both are actually legal rights which are extended to women in the US now that were not, in the same way, extended to them in 1788.
> They could own property, for example.
Unmarried women could own property, but under the common law doctrine of coverture, married women could neither own property, nor enter into contracts, nor earn a salary. Her husband could do all those things -- acting on his sole discretion -- including entering into contracts which called for performance by the wife, or exercising all rights relating to property which she had owned prior to the marriage.
> Once married, they became basically legally merged with their husband, but I'm not sure what it would mean to share a household in 1788 and not have joint ownership of things.
They didn't have joint ownership of things -- the concept of joint ownership in marriage in the US is a result of laws beginning in the 19th century which allowed a married women to own property at all. Prior to that, the husband owned any property and could dispose of it at will without the consent of the wife, but the reverse was not true. It was sole ownership by the husband, not joint ownership by the couple. The same was true of the power of contract, and basically all other beneficial aspects of legal personhood.
> In fact, they would have been covered by all of the bill of rights, including 9 and 10, which we are not covered by today
Both halves of this are wrong: while the Ninth and Tenth Amendments remain in effect today, they were formally proposed by the first Congress operating under the new Constitution in 1789 and were ratified in 1791, so they didn't apply to women or anyone else in 1788.
In any case, the Bill of Rights is not the only part of the Constitution that provides rights; among the amendments ratified after 1791 that provide rights are amendments 13, 14, 15, 19, 23, 24, and 26.
If you want to win the war of nit-picking, you win. You are right that the Constitution was not operative yet in 1788.
> Unmarried women could own property, but under the common law doctrine of coverture, married women could neither own property
That's what I said. (And not entering into contracts or earning salary are corollaries of that.)
By "joint ownership," I didn't mean some specific conception of joint ownership that you seem to be referring to. I meant that they owned things together, which means that whoever was more dominant in the marriage would have say---and legally, the husband would be free to completely dominate if he wanted.
> while the Ninth and Tenth Amendments remain in effect today
Go read them---they are not in effect in practice.
I don't care to continue this discussion, so I won't continue discussing it. It's pointless anyway, we are too philosophically different. If we want to argue we should argue about philosophy. Arguing on this level accomplishes nothing.
That's an interesting argument. Certainly to support it one would probably make references to the culture of the time. In the late 1700s there was sufficient level of education to make people think critically and consider alternatives, plus a great deal of philosophical understanding. Probably literacy reached a local maximum, or a higher level than in generations prior.
But one of the big challenges of success is that it's easy to take it for granted, especially each successive generation who grows up used to the benefits that their parents worked hard to win for them (or the results of major global conflicts in some cases. But even those result in post war booms.)
To take this out of the broad country level perspective, where technological and other advancements and history could be argued to be the cause-- we could look at the second and third generation immigrants to the USA. I suspect, and I hear this anecdotally, but I don't have data-- that the first generation kids are more industrious than the third or fourth-- and that this is probably true in the 1800s, 1900s and now.
In fact, I would argue that it was the presumption that prosperity (Which we've had) would result in ever higher levels of literacy (Which we've experienced) and thus higher levels of enlightenment and philosophical perspective due to ever better education and schools -- which we have not had.
Schools have slowly declined to the point where I suspect most schools don't even teach classical literature, let alone philosophy.
So, I think the lesson to learn from the USA is to never let the government take over the schools.
> In the late 1700s there was sufficient level of education to make people think critically and consider alternatives
Among an extremely narrow, elite class perhaps. Jeffersons & Adams & Paine * Adam Smith are disproportionately represented among the people of that time that we remember now, but weren't exactly the norm.
> Probably literacy reached a local maximum, or a higher level than in generations prior.
Well, the latter but not the former -- just as has been the case since. [0]
> To take this out of the broad country level perspective, where technological and other advancements and history could be argued to be the cause-- we could look at the second and third generation immigrants to the USA. I suspect, and I hear this anecdotally, but I don't have data-- that the first generation kids are more industrious than the third or fourth
The common thing I've heard from people in fairly-recent-immigrant-descended-communities is that first-generation Americans (children of immigrants) are less industrious than immigrants or later generations. This is not to endorse the idea that any of these generational generalizations are accurate, just that, well, there's lots of different generalized anecdotes out there.
> In fact, I would argue that it was the presumption that prosperity (Which we've had) would result in ever higher levels of literacy (Which we've experienced) and thus higher levels of enlightenment and philosophical perspective due to ever better education and schools -- which we have not had.
I don't think that's true. I just think that due to selective preservation of history, we tend to only see the top end of the bell curve from 1776, and a lot more of the current distribution.
> Schools have slowly declined to the point where I suspect most schools don't even teach classical literature, let alone philosophy.
Certainly, the fetishization of the ancients Greece and Rome has waned and there is a lot more literature written since the fall of Rome that is taught in schools. I'mnot sure that this is a problem. And the definition of "philosophy" has narrowed since the 18th Century -- much of what is currently taught in school would have been within the scope of "philosophy" were that term as broad as it was in the 18th Century.
And perhaps a smaller percentage of schools teach philosophy than did in the 18th Century, but I suspect at least as great a share of people attend schools in which philosophy is taught; that would have been mainly the elites in the 18th Century, after all, not everyone.
[0] http://ourworldindata.org/data/education-knowledge/literacy/
I think the title is wrong, they didn't register with FinCen or comply with BSA AML. Money Transmitter stuff is a really different thing, did I miss something?
The title currently reads "Ripple fined for acting as a money services business without registration", and the complaint says "Ripple Labs willfully violated several requirements of the Bank Secrecy Act (BSA) by acting as a money services business (MSB)and selling its virtual currency, known as XRP, without registering with FinCEN".
That looks like the title matches the contents. Did the title change since you wrote the question? It is important on Hacker News, when addressing anything about the title of a submission (or about the precise URL of the submission), to quote the title or URL you are talking about, as moderators sometimes silently change the title or update the URL to point to the actual underlying story rather than blogspam.
After registering, a US money service business has to file reports on "suspicious transactions". This is done electronically, although the data formats are incredibly antiquated.[1] Each record is like a 1000+ column punched card, and they're filed as big batches. On the other hand, there's not much of an attack surface against FinCen, and since their opposition is drug cartels, that's an issue.
[1] http://bsaefiling.fincen.treas.gov/docs/TestingProcedures.pd...