Mike Caldwell ran a business called Casascius that printed
physical tokens with a bitcoin digital key on it, key hidden behind
a tamper proof strip. He’s charge you $50 worth of bitcoin to print
a key of a bitcoin you sent him via computer on this token. Cool
stuff–a good friend of mine found one sitting unnoticed in her tip
jar from an event at which she sold her artisan lamps from 2011 and
was naturally delighted given the nearly 1000x increase in value of
a bitcoin since then.
So, you’re making something fun, useful, interesting,
harmless—naturally the federal government is very concerned and
wants to hobble you.
Just before Thanksgiving, [Caldwell] received a letter
from the Financial Crimes Enforcement Network, or FINCEN, the arm
of the Treasury Department that dictates how the nation’s
anti-money-laundering and financial crime regulations are
interpreted. According to FINCEN, Caldwell needs to rethink his
business. “They considered my activity to be money transmitting,”
Caldwell says. And if you want to transmit money, you must first
jump through a lot of state and federal regulatory hoops Caldwell
hasn’t jumped through.
Caldwell has stopped taking orders for his popular Casascius
bitcoins….[he]argues that sending the coins through the
mail is not a way of transmitting money. He thinks the coins should
be viewed as collectibles.
But, clearly, that’s not how the federal government sees things.
If he doesn’t verify or have a way of knowing whether the owner of
the bitcoins is the same person he’s sending the coins to, that’s a
Caldwell says there’s no Casascius bank account for
authorities to seize. But he adds that he has no desire to anger
the feds, whether he agrees with them or not. So he’s cranking out
his last few orders and talking to his lawyer. He says this may
spell the end of Casascius coins. “It’s possible. I haven’t come to
a final conclusion,” he says.
He’s already been forced to spend $5,000 lawyering up
since receiving that helpful letter from the feds.
I wrote back in May on
FinCEN beginning to sniff around the world of
from Hit & Run http://reason.com/blog/2013/12/12/maker-of-physical-bitcoin-tokens-stops-b