Bitcoin Regulation Discussion
Legal compliance remains one of the central concerns of the virtual currency markets, as well as one of the highest barriers to entry for many new entrepreneurs. Bitcoin London gathered a number of experts to shed light on this topic, including:
- Patrick Murck – General Counsel, Bitcoin Foundation
- Constance Choi – General Counsel, Payward
- Danny Friedberg – Attorney, Graham Dunn
- Stuart Hoegner – General Counsel, Gaming Counsel
- Stefan Greiner – Xenion Legal (Moderator)
One of the most poignant comments during the discussion occurred within the first minute when Patrick Murck stated, “It’s never a good sign when lawyers are the most popular people at a tech conference.” Fortunately, the panel was able to offer guidance on an ever-changing regulatory environment.
After noting that the FinCEN guidance issued in March was actually beneficial for bitcoin because it gave some comfort to investors by offering initial clarity, Mr. Murck also pointed out that further action from trading and consumer protection regulators may be on the horizon.
Universally agreed upon by the panel was the remarkable difficulty in registering as an MSB in the United States, as it requires not only federal registration but also registration with each state in which a company plans to conduct business. Though some would consider the current regulatory environment unreasonably difficult to navigate, Payward’s Constance Choi explained her interaction with the US Treasury, noting that regulators feel it is up to the industry to survive the existing system, not up to the regulators to accommodate relatively small, new technology.
After personally addressing the recent, unfounded cease and desist order sent by the California Department of Financial Institutions to the Bitcoin Foundation, Murck noted that “the burden is shifted onto the industry to prove they’re innocent, which will create an opportunity globally for other countries to take the lead.”
Shifting the conversation to the regulatory environment in Europe, the panelists agreed that Europe has taken a more reasoned view. Ms. Choi explained that the EU does not consider bitcoin money or e-money, a view she states is shared by the European Commission.
Looking forward, Murck believes the bitcoin community needs to choose the “lines in the sand worth fighting for, “opining that privacy protection and decentralization are worth defending, while accommodating required anti-money laundering practices is reasonable. He further recommended finding allies within the traditional banking industry by pushing for legislation that would benefit both. One such example was the idea that if a bank or bitcoin company is adequately following anti-money laundering regulations, they cannot be held responsible for an individual customer using their system for illicit purposes.
Closing out the panel as it started was another important point made by Murck when he pointed out that some regulators, such as the FTC, should see bitcoin as a positive advancement. “We don’t have to accept law enforcement driving this process,” he stated, “There are people in government who would recognize the benefits of bitcoin.”