Last updated on October 13th, 2017 at 09:35 am
If you remember, the Bitcoin Foundation is being persecuted by the Department of Financial Institutions of California, which recently issued a ‘cease and desist order’ against the non-profit organization. Apparently, the authority claims that the Bitcoin Foundation is allegedly engaged in money transmission operations without a license or proper authorization granted by the U.S. Treasury Department.
The fact that the Californian department is going after an organization that only deals with money because it receives donations to keep doing their work is making a lot of people angry. And you know what happens when the authorities start confronting the Bitcoin institutions like this: everybody starts talking about a conspiracy…
“At this stage, it’s difficult to tell whether or not it was a general blanket action and if other Bitcoin-related entities received ‘cease and desist’ letters from California. If Bitcoin Foundation was not the only recipient, then expect other companies to come forward in the days and weeks ahead”, said Jon Matonis, a member of the Bitcoin Foundation and an e-money researcher, to Forbes magazine.
Matonis was the one who uploaded the official document to Scribd and spread the word about the accusation. According to the Department of Financial Institutions, the Bitcoin Foundation is accused of being in breach of the financial code 2030. This code states that “a person shall not engage in the business of money transmission in this state”, unless the person or institution has a license from the Commissioner of Financial Institutions or is exempt.
According to the document, violating this law can result in fines between $1,000 to $2,500 per violation or per day and, ultimately, in the imprisonment of the suspects. Also, the felony to engage in money transmission without a state license or to fail to register properly with the U.S. Treasury Department can result in a humongous fine of $250,000… Or up to five years in prison, equally not good.
To calm everyone’s nerves, the California’s Department of Financial Institutions has made a statement. The regulator told CNBC that the letter in circulation is not a ‘cease and desist order’ and is just meant to be a warning to unlicensed businesses, not a warrant.
Although the authority couldn’t make a more complete comment, as the case is confidential, they said that recipients of letters can contact the department to discuss if the law applies to them or not. We wonder if the Bitcoin Foundation has already contacted the Californian regulator to schedule a nice talk over some tea and cookies.