The Satoshi Revolution: A Revolution of Rising Expectations.
Section 1 : The Trusted Third Party Problem
Chapter 3: Trying to Undo Satoshi
by Wendy McElroy
Bad News: Government Takes Cryptocurrency Seriously (Chapter 3, Part 2)
A dangerous legal cloud on the horizon has edged closer. On Tuesday, November 28, Senate Bill 1241 was heard by the U.S. Congressional Committee on the Judiciary. Whether or not the bill passes, it expresses the direction of government's increasingly aggressive interest in cryptocurrency.
Section 13 of the "Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017" seeks to amend 31 U.S. Code § 5312, which addresses definitions and their application. Specifically, the revision would include "digital currencies" as "monetary instruments" and "any digital exchanger or tumbler of digital currency" as a "financial institution." The other sections become relevant because the redefinition of digital currencies makes them fall under their jurisdiction.
Some people will cheer because they believe regulation indicates that crypto is going "mainstream." Others shrug because, in the final analysis, they believe the likes of bitcoin cannot be controlled by authorities. They are probably correct…in the final analysis. In the short term, however, lives can be destroyed. And we all live in the short term.
The prudent approach is neither applause nor dismissal. It is preparation. Because the government is coming, and it wants your money.
The simplest solution is avoid the United States. Often, that solution is not workable. For one thing, governments everywhere are trying to ban, to own or otherwise to control crypto. Government is determined to retain its status as the trusted third party in the issuance and regulation of money. "Going mainstream" makes using cryptocurrency far more dangerous for those who value privacy and freedom.
What is S1241?
The "Combating Money Laundering, Terrorist Financing and Counterfeiting Act" is an anti-money laundering law that federally regulates cryptocurrency. Many client-friendly exchanges and other crypto-businesses have already fled the U.S. due to the hostility or the power-grabs of federal agencies, such as the Securities and Exchange Commission. S1241 can be viewed as a template for how government intends to proceed.
$10,000 US is the key. It is the amount in cash or monetary instruments that must be declared at the U.S. border. It also triggers U.S. financial institutions to fill out a currency transaction report that can cause government to freeze or confiscate accounts, whether or not there is evidence of criminal activity.
S1241 is a drastic expansion of the $10,000 trigger. Government gets a powerful opening wedge to tax, to confiscate and to claim authority over cryptocurrency. When does government ever stop at an opening wedge?
But, first, a sidenote. The bill is also covert. An alert bitcoiner noticed that the Senate Judiciary meeting was listed on the official webpage as 10 a.m. on the 28th but it was only added to the Hearing page at 6 p.m. the evening before; this effectively precluded media coverage, protests, and rebuttal testimony.