In the US, you can sell your bitcoins for cash without freaking out about money transmission laws (AML/KYC) until you hit the point where you're seen as "a business".
Does anyone have an idea about what kind of frequency and volume might make you trigger FINCEN's registration and reporting rules? Has there been anything noteworthy in the last few years? FINCEN's guidelines are pretty unclear.
Take this case from 2017: that guy in Nixa who pleaded guilty to illegal bitcoin exchanging. Five transactions over 1.5 years, with amounts as low as a grand, seems like nothing. But the press release points out he called himself an exchanger is that what really matters?
Going back to what Marco Santori said, he mentioned "you have to accept all comers". Does that mean if you're just reaching out to advertisers and not calling yourself an exchanger, you won't be seen as a business?
i've been perusing the regulations for clues and found a couple more nuggets of info in their 2019 guidance. https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf
so this sets 2 standards. one can engage in money transmission without being considered an MSB by FINCEN if you do so 1. infrequently and 2. not for profit.
this second point brings me back to klein's case cited in the OP. from the DOJ press release:
so it would appear there is a clear distinction between just cashing out some bitcoins, and exchanging as an ongoing for-profit activity. that's the good news.
however, that still leaves the frequency standard. i'm still tripping on how the feds took him down for 5 transactions over a 1.5 year period. that's 1 trade every 3.5 months. how does that constitute money transmission on a "frequent" basis? that makes me wonder if the charges would have held up in court. he plead out so we'll never know....
I believe that it also has been stated that advertising indicates that a person is acting as a business.
I used to be a big trader on LocalBitcoins a long time ago. I felt that it was an excellent way to help people get started with Bitcoin because many buyers were newbies and I would help them get set up. However, after traders started getting arrested, I had to stop. I was charging a fee for my time and risk, which along with my listing on LocalBitcoins could justify classifying me as a business by the people that were looking for someone to arrest.
I believe the statute of limitations has passed, so I am now safe from prosecution.
https://localbitcoins.com/accounts/profile/odolvlobo/
it appears to be a rather crucial factor, if the case of @BurtW says anything.
prior to today, i had only skimmed that thread. i knew they were stinging localbitcoins advertisers for unlicensed MSB, but i didn't realize federal agents are taking control of highly reputed accounts and using them to sting customers!
so even if you are careful not to trigger FINCEN's MSB requirements, you still need to be very careful not to agree to anything illegal. if a trader ever mentions the need to conceal illegal proceeds, you're looking at something like this:
if anyone ever remotely suggests they are using you to launder money, don't just walk away. run! no legit criminal is announcing stuff like that to strangers off the internet. it's a cop.
I have taken the time to read some federal appellate cases on this matter and can tell you there is no exact number that qualifies as a business but most of the appellate decisions in the various federal circuit's do state that the purpose of a business is to turn a profit (if it in fact does or does not is not pertinent) therefore charging a fee for the service will always qualify as a business. The cases also specifically say that single transactions can never qualify. So if you are doing infrequent transactions and not charging a fee then you could never be convicted of 18 USC 1960 - the unlicensed MSB statute.
Another great example of how smart they do in the United States. Apparently, it is not long left to wait when it will be possible, as in any currency exchanger, to change $ for bitcoin and vice versa. I am sure other currencies will be included in this list of pairs later. In my opinion, this is a great decision and the fact that it decriminalizes the topic of trade and the circulation of cash in this area - the news will support the market. Any such news with a + sign gives another positive on the market.
Yea so what constitutes needing a license then? So imagine someone that daytrades on the exchanges or a regular person do say a few transactions a year selling btc for cash and do it for l000 dollars each... let say 6 transactions the entire year. That doesn't constitute a business right?
What about someone selling btc for cash like twice a year to someone but do it for l5,000 each time? Does that constitute as a business? What if they charged a percentage/vig... like imagine charging the person paying cash an extra few percentage, would that count as a money transmitter?
Now obviously if someone does like hundreds of btc for cash sales, that obviously would be a money transmitter. But what about those people who do it once a month or few times a year? Now if you do it once or twice a year but do a big amount, like 5 figures, would that count? It seems like constitute a business... but what does that even mean? That person only did a few transactions the entire year... so was it the fact that the amount was 5 figures for his transactions or he was openly advertising it? Also how hard and what is the cost to even get the license for this for money transmitter.