FinCEN rules in favour of Bitcoin miners
Financial Crimes Enforcement Network (FinCEN), US has cleared up one issue that pertains to Bitcoin mining by siding Bitcoin miners ruling that those who mine it for their own purpose and not for the benefit of another are not an MSB (Money Services Business) under FinCEN’s regulations.
The issue came up after miners raised concerns if they can mine Bitcoin for themselves and then trade them for cash at an exchange or spend them directly without being classified as an MSB. Miners were concerned that they may be, under FinCEN’s regulations, required to register as MSB and comply with all applicable laws. The concerns were further aggravated after Jerry Brito, FinCEN stated in a personal letter that Bitcoin miners will be required to register with FinCEN. [Tweet from The Genesis Block]
The issue was taken up on a larger scale by Atlantic City Bitcoin, which operates multiple ASIC miners at its facility in New Jersey. Atlantic City asked FinCEN to clarify the rules and whether miners will be required to register as MSB.
Excerpt of FinCEN’s ruling have been reproduced below:
“To the extent that a user mines Bitcoin and uses the Bitcoin solely for the user’s own purposes and not for the benefit of another, the user is not an MSB under FinCEN’s regulations, because these activities involve neither “acceptance” nor “transmission” of the convertible virtual currency and are not the transmission of funds within the meaning of the Rule. This is the case whether the user mining and using the Bitcoin is an individual or a corporation, and whether the user is purchasing goods or services for the user’s own use, paying debts previously incurred in the ordinary course of business, or (in the case of a corporate user) making distributions to shareholders. Activities that, in and of themselves, do not constitute accepting and transmitting currency, funds or the value of funds, are activities that do not fit within the definition of “money transmission services” and therefore are not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs…”
The ruling is yet to be published on FinCEN’s website, but you can find the text of the entire ruling here.