Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

BitLegal Tracks Bitcoin's Legal Status Around World

By

Plus, regulators in New York hold a hearing to determine Bitcoin's future in the state.

PrintPRINT
Central banks and government bodies around the world are racing to define the legal status of Bitcoin, the decentralized digital currency that's galvanized entrepreneurs and criminals alike.

In the past two weeks, Canada's Department of Finance, The Bank of France, and Belarus' Ministry of Internal Affairs all issued guidance on Bitcoin. Last Monday, the Russian Central Bank warned against using virtual c-currencies, stating that these "money surrogates" are illegal under federal law. On Friday, Estonia's central bank warned Bitcoin could become a Ponzi scheme, while China's central bank followed through on its December 2013 promise to ban financial institutions and payment processing companies from handling Bitcoin transactions.

Tracking Bitcoin's rapidly evolving legal status can be overwhelming. Some media outlets, like Forbes, have attempted to keep tabs. But none have gone as far as BitLegal, a new website launched last month.

Founded by Zachary Taylor, a 23-year-old Web developer based in Philadelphia, and Marc Nickel, a Silicon Valley-based attorney, BitLegal covers Bitcoin's legal status in over three dozen nations, including every country where a regulatory body has issued guidance on Bitcoin.


On BitLegal.net, visitors can click on any country within this interactive chart and pull up a tab detailing recent news and information on legal classification and tax regulation.

BitLegal started as a weekend project for Taylor, who had noticed the absence of a one-stop reference for the increasing amount of regulatory information coming out on Bitcoin.

"I think a resource like this is important because for users in many countries, Bitcoin commerce is growing in an environment of legal uncertainty," Taylor tells Minyanville. "New developments are rapidly increasing, and missing trends can leave you unprepared for new regulatory schemes, or even worse, in trouble with the law."

With BitLegal, Taylor and his team aim to create the most authoritative and comprehensive resource on virtual currency law. They believe 2014 will be a very busy year for Bitcoin, and see their map as a resource not only for investors and businesses, but for the curious general public to keep track of new guidance and legislation emerging week to week.

New York Regulators Conduct Hearing, Aim to Issue Guidance

In Manhattan last week, the New York Department of Financial Services held a regulatory hearing on Bitcoin. The hearing drew notable players in the nascent Bitcoin space, many of whom welcomed regulation. Cameron and Tyler Winklevoss were among those who testified. Notable for their $140 million lawsuit against Mark Zuckerberg for stealing their concept for Facebook (NASDAQ:FB), the twins have been early Bitcoin evangelists and are currently launching an exchange-traded fund investing in Bitcoin. At the hearing, Cameron Winklevoss suggested that government intervention would be beneficial.

"The Wild West attracts cowboys. A sheriff would be a good thing," he said.

Law enforcement officials also testified at the hearing. Richard B. Zabel, a prosecutor with the US attorney's office in Manhattan, detailed the ways that Bitcoin is more vulnerable to crime than traditional types of money transfer. The ease at which criminals can move, conceal, and launder illicit profits was a primary concern.

Benjamin M. Lawsky, New York's Superintendent of Financial Services, said at the hearing that he hoped to make New York the first state to provide regulatory clarity on Bitcoin. Outside of New York, California officials have reportedly been meeting with lawyers and compliance experts with the goal of creating an official Bitcoin policy. On the federal level, a judge ruled in August that Bitcoin is a legitimate currency. The Financial Crime Enforcement Network (FinCEN), the US Treasury's anti-money laundering division which requires the registration of Bitcoin money services, classifies Bitcoin as a "virtual currency" without legal tender status.

How Bitcoin is classified under the law will determine how and by whom it's used, argued Stanford economics professor Susan Athey at the hearings. "If this is mainly for outlaws," she said, "then it's going to evolve to serve outlaws."

At BitLegal, Taylor and his team are expecting a lot of state-level legislation this year, and are working on incorporating individual US states into their map.

(See also, Still Don't Get Bitcoin? An Explanation You Can't Possibly Misunderstand.)

Twitter: @brokawbrokaw
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE