The US Financial Crimes Enforcement Network (FinCEN) published two new rulings on 30th January that aim to bring clarity as to which players in the virtual currency space will fall under the Bank Secrecy Act's (BSA) definition of a money transmitter.
FinCEN said that miners who mine virtual currency for their own use, as well as companies that purchase and sell convertible virtual currency solely as an investment aren't subject to this law.
"The first ruling 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. The second states that a company purchasing and selling convertible virtual currency as an investment exclusively for the company’s benefit is not a money transmitter," the release states.
Members of the mining business community also greeted the news with favor:
However, while some were optimistic, others implied that this is just the latest development in legal grounds that are likely to shift as more government bodies seek clarity on the matter and await guidance from higher authorities.
Impact on mining
While FinCEN's declaration will be welcomed by bitcoiners, it may be of little importance to individual miners who never viewed themselves as money transmitters in the first place. However, the statements may not be the last word on how bitcoin miners are regulated.
Because of these changes, bitcoin developer Jeff Garzik suggested that more clarity will be needed from FinCEN:
Impact on regulation
Notably, the FinCEN guidance will prevent regulations in states such as New York from implementing strong oversight on the mining community. At this week's New York Department of Financial Services (NYDFS) hearings, general counsel Daniel Alter seemed to express the most interest in putting controls on this sector of the industry, as he suggested miners may have the ability to "destabilize" bitcoin.
, partner at Bryan Cave, argued against these suggestions and for a measure most like the one FinCEN provided.
, of Lightspeed Venture Partners, expressed satisfaction with the ruling. The investor directed many of his comments at the NYDFS hearings to attempting to limit regulation on the virtual currency industry.