The United States Financial Crimes Enforcement Network (FinCEN) published two new administrative rulings announcing that Bitcoin miners and investors aren’t considered money transmitters.
A document released this Thursday (30) includes the two rulings. The first one states “that, to the extent a user creates or ‘mines’ a convertible virtual currency solely for a user’s own purposes, the user is not a money transmitter under the BSA [Bank Secrecy Act]”. The second one claims that “a company purchasing and selling convertible virtual currency as an investment exclusively for the company’s benefit is not a money transmitter”.
The BSA regulations define the term “money transmitter” to include a person that provides money transmission services or any other person engaged in the transfer of funds.
The guidance makes clear that “a user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB [money transmitter] under FinCEN’s regulations“. This group of users includes miners and buyers, according to the authority.
FinCEN understands that Bitcoin mining imposes no obligations on a Bitcoin user to send mined Bitcoin to any other person or place for the benefit of another. Instead, the user is free to use the mined virtual currency or its equivalent for the user’s own purposes, such as to purchase real or virtual goods and services for the user’s own use.
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.
The mining community was pleased with the news. “We’re happy that FinCEN has clarified what we believe was their intention all along and that Bitcoin miners can now continue mining confidently“, Jeff Ownby, vice president of marketing at the hardware manufacturer Butterfly Labs, told CoinDesk.
Both rulings are a developed interpretation of FinCEN’s related guidance issued on March 2013.