Virtual Currency: Issues and Promise Compiled and Edited by Michael Erbschloe Connect with Michael on LinkedIn ©2018 Michael Erbschloe Table of Contents Section About the Editor Introduction Virtual Currency Investigative Challenges and Opportunities IRS Virtual Currency Guidance FinCEN Fines BTC-e Virtual Currency Exchange $110 Million Application of FinCEN’s Regulations to Virtual Currency Mining Operations Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies ICE Homeland Security Investigative Programs Investor Alert: Bitcoin and Other Virtual Currency-Related Investments Addressing the Illicit Finance Risks of Virtual Currency Former Virtual Currency CEO Pleads Guilty to $9 Million Fraud Scheme The Roles of the SEC and CFTC SEC Halts Alleged Initial Coin Offering Scam Investor Bulletin: Initial Coin Offerings Regulation of Bitcoin in Selected Nations Page Number 19 20 22 27 34 41 45 58 60 71 73 77 About the Editor Michael Erbschloe has worked for over 30 years performing analysis of the economics of information technology, public policy relating to technology, and utilizing technology in reengineering organization processes He has authored several books on social and management issues of information technology that were published by McGraw Hill and other major publishers He has also taught at several universities and developed technology-related curriculum His career has focused on several interrelated areas: • • • • • Technology strategy, analysis, and forecasting Teaching and curriculum development Writing books and articles Publishing and editing Public policy analysis and program evaluation Books by Michael Erbschloe Threat Level Red: Cybersecurity Research Programs of the U.S Government (CRC Press) Social Media Warfare: Equal Weapons for All (Auerbach Publications) Walling Out the Insiders: Controlling Access to Improve Organizational Security (Auerbach Publications) Physical Security for IT (Elsevier Science) Trojans, Worms, and Spyware (Butterworth-Heinemann) Implementing Homeland Security in Enterprise IT (Digital Press) Guide to Disaster Recovery (Course Technology) Socially Responsible IT Management (Digital Press) Information Warfare: How to Survive Cyber Attacks (McGraw Hill) The Executive's Guide to Privacy Management (McGraw Hill) Net Privacy: A Guide to Developing & Implementing an e-business Privacy Plan (McGraw Hill) Introduction There is no single commonly accepted definition of virtual or digital currency For purposes of this volume, virtual currency is a digital representation of value that can be traded on the Internet and functions as (1) a medium of exchange; (2) a unit of account; and/or (3) a store of value, but does not have legal tender status in any jurisdiction Virtual currency is distinguished from fiat currency (a.k.a “real currency,” “real money,” or “national currency”), which is the coin and paper money of a country that is designated as its legal tender; circulates; and is customarily used and accepted as a medium of exchange in the issuing country Virtual currency is also distinct from e-money, which is a digital representation of fiat currency used to electronically transfer value denominated in fiat currency E-money is a digital transfer mechanism for fiat currency— i.e., it electronically transfers value that has legal tender status Digital currency is a digital representation of either virtual currency or e-money Although virtual currencies may support important innovation and serve legitimate purposes, like traditional currencies or other methods of transferring value, virtual currencies may also be exploited for the purposes of money laundering, the facilitation and financing of terrorism, and to enable other crimes such as child pornography, drug trafficking, and cybercrimes Virtual currencies are designed to be an alternative to current payment systems Better-known virtual currencies include Bitcoin, XRP, and Dogecoin Often referred to in the industry as “digital currencies,” they are a way for people to track, store, and send payments over the Internet, and they may have the potential to make payment processing cheaper or faster But they are not backed by any government or central bank In addition, because virtual currency accounts are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, if a virtual currency company fails – and many have – the government will not cover the loss Virtual currency companies are springing up around the world to offer products and services to consumers There are virtual currency exchanges, which are companies that help consumers buy or sell virtual currencies There are also online “digital wallet providers,” which are companies that allow consumers to create accounts with them to store and manage their virtual currencies Many virtual currency exchanges are also wallet providers, and vice versa Pitfalls include: Exchange rates are volatile and costs unclear: The exchange rate of Bitcoins to U.S dollars in 2013 fell as much as 61 percent in a single day In 2014, the value of Bitcoins has dropped by as much as 80 percent in a single day The advisory explains that consumers who buy virtual currencies should be prepared to weather this kind of volatility Consumers should also consider whether there are mark-ups or other fees when using an exchange or digital wallet provider Companies may be charging consumers to buy, spend, or accept virtual currencies Hackers and scammers pose serious security threats: Virtual currencies are targets for highly sophisticated hackers and scammers Individuals, digital wallet providers, and exchanges are all at risk For example, if a hacker gains access to a consumer’s Bitcoin “private keys,” which are 64-character codes that unlock the consumer’s funds, the consumer can lose all their virtual currency Fraudsters are also taking advantage of the hype surrounding virtual currencies to pose as Bitcoin exchanges, Bitcoin intermediaries, and Bitcoin traders in an effort to lure consumers to send money, which is then stolen Companies may not offer help or refunds for lost or stolen funds: Some virtual currency companies not identify their owners, provide phone numbers and addresses, or even specify the country in which they are located Before using a company’s products or services, consumers should carefully consider if they know how to contact the company in question, and if they know their contractual rights If a consumer trusts a company to hold their virtual currencies and something goes wrong, the company may not offer the kind of help the consumer would expect from a bank, debit card, or credit card provider In fact, some virtual currency companies disclaim responsibility for consumer losses if funds are lost or stolen In February 2014, the Mt Gox virtual currency exchange filed for bankruptcy, stating that a security breach resulted in the loss of bitcoins worth more than $460 million at the time This incident is one of many real-world illustrations of the risks involved in using virtual currencies On January 24, 2018 the CFTC Charged Randall Crater, Mark Gillespie, and My Big Coin Pay, Inc with Fraud and Misappropriation in Ongoing Virtual Currency Scam Defendants allegedly solicited more than $6 million for investments in a virtual currency known as “My Big Coin” The Commodity Futures Trading Commission (CFTC) announced the filing of a federal court enforcement action under seal on January 16, 2018, charging commodity fraud and misappropriation related to the ongoing solicitation of customers for a virtual currency known as My Big Coin (MBC) The CFTC Complaint charges Defendants Randall Crater of East Hampton, New York, Mark Gillespie of Hartland, Michigan, and My Big Coin Pay, Inc., a corporation based in Las Vegas, Nevada, with misappropriating over $6 million from customers by, among other things, transferring customer funds into personal bank accounts, and using those funds for personal expenses and the purchase of luxury goods On January 16, 2018, Judge Rya Zobel of the U.S District Court for the District of Massachusetts, issued a restraining Order, also under seal, freezing the Defendants’ assets The Order also freezes the assets of Relief Defendants Kimberly Renee Benge, Kimberly Renee Benge d/b/a Greyshore Advertisement a/k/a Greyshore Advertiset, Barbara Crater Meeks, Erica Crater, Greyshore, LLC, and Greyshore Technology, LLC for allegedly receiving customer funds without providing any legitimate services to clients and without any interest or entitlement to such customer funds The court’s restraining Order also prohibits the Defendants and Relief Defendants from destroying or altering books and records CFTC’s Director of Enforcement Comments Director of Enforcement James McDonald, stated: “As this case shows, the CFTC is actively policing the virtual currency markets and will vigorously enforce the anti-fraud provisions of the Commodity Exchange Act In addition to harming customers, fraud in connection with virtual currencies inhibits potentially market-enhancing developments in this area We caution potential virtual currency customers, once again, that they should engage in appropriate diligence before purchasing virtual currencies.” Specifically, the CFTC Complaint alleges that from at least January 2014 through January 2018, the Defendants fraudulently solicited potential and existing MBC customers throughout the United States by making false and misleading claims and omissions about MBC’s value, usage, and trade status, and that MBC was backed by gold Defendants also allegedly fraudulently solicited numerous customers in the District of Massachusetts, receiving in excess of $5 million from those customers As alleged in the Complaint, the MBC website, maintained and operated by the Defendants, conveyed to customers numerous solicitation materials, MBC trade data, and other materials (1) misrepresenting that MBC was actively being traded on several currency exchanges, including the MBC Exchange website, when in fact it was not; (2) misrepresenting in reports the daily trading price, when in fact no price existed because MBC was not trading; (3) misrepresenting that MBC was backed by gold, when in fact it was not; and (4) misrepresenting that MBC had partnered with MasterCard, with the promise that MBC could be used anywhere MasterCard was accepted, when in fact no such partnership existed and MBC could not be used anywhere MasterCard was accepted In reality, as alleged, the supposed trading results were illusory, and any payouts to customers were derived from funds fraudulently obtained from other customers in the manner of a Ponzi scheme As customers began to raise questions about their MBC accounts, Defendants attempted to conceal their fraud by issuing additional coins to customers and falsely representing that they had secured a deal with another exchange to trade MBC, according to the Complaint Defendants allegedly encouraged customers to refrain from redeeming their MBC holdings until MBC was active on this “new” exchange Misappropriated Funds Used for Personal Purchases, Including a Home, Jewelry & Travel As further alleged in the Complaint, Defendants misappropriated virtually all of the approximately $6 million they solicited from customers Defendants allegedly used these misappropriated funds to purchase a home, antiques, fine art, jewelry, luxury goods, furniture, interior decorating and other home improvement services, travel, and entertainment In its continuing litigation, the CFTC seeks civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws, as charged This case is brought in connection with the CFTC Division of Enforcement’s Virtual Currency Task Force, and CFTC staff members responsible for this case are Traci Rodriguez, Patricia Gomersall, Jonah McCarthy, Jason Mahoney, Hillary Van Tassel, John Einstman and Paul Hayeck Source: https://www.consumerfinance.gov/about-us/newsroom/cfpb-warns-consumers-aboutbitcoin/ http://www.cftc.gov/PressRoom/PressReleases/pr7678-18 Virtual Currency Investigative Challenges and Opportunities By Brett Nigh, J.D., and C Alden Pelker In June 2014 the U.S Marshals Service held a first-of-its-kind auction to sell an unusual asset: 29,656 “bitcoin,” units of “virtual currency,” which function much like traditional currency on the Internet but are not controlled or backed by any national government.1 The bitcoin, valued at $18 million at the time of auction, were a portion of more than 179,000 units seized by the FBI in 2013 during the takedown of Silk Road, an extensive black market website For over two years, Silk Road facilitated the sale of hundreds of millions of dollars worth of narcotics, stolen identities, and numerous other illegal goods and services.2 All transactions were conducted exclusively in bitcoin Use of virtual currency has evolved over nearly two decades alongside the expansion of the Internet Every day, people across the globe use the Web to move money Most transactions are denominated in U.S dollars or another national currency However, a small but increasing fraction of those transactions use virtual currency as an alternative form of payment Until recently, all virtual currency existed within centralized systems In the centralized model a private company controls the virtual currency, issues units to its users, determines the virtual currency’s value, records transactions, and keeps track of customers’ balances The company is the controlling force that drives everything in the system Centralized virtual currency systems encompass a wide range of business models The technical operation of online payment systems, such as WebMoney and the now-defunct Liberty Reserve, is nearly identical to that of traditional online systems, apart from denominating users’ accounts in virtual currency, rather than a national currency Some systems, such as Pecunix and the nowdefunct e-Gold, allow users to exchange digital units of gold bullion or other precious metals, earning the systems the name “digital precious metals.” Other systems operate within popular virtual worlds and online games where entire microeconomies develop among players relying on in-game currency Over the past six years, decentralized virtual currencies also have grown to prominence in the virtual currency landscape Decentralized virtual currency systems afford users many of the same benefits as their centralized counterparts—users can hold funds and transfer value to other users within the system However, unlike centralized systems, decentralized systems are not run by a company Rather, transactions are sent across a peer-to-peer network without involving a third party Users anywhere in the world can download the free, open-source software specific to a particular decentralized virtual currency Once they have done so, users can send funds securely and almost instantly across vast distances with just the click of a button Bitcoin is by far the most popular and well-known decentralized virtual currency, with a total market value of approximately $3.4 billion as of May 2015 However, there are hundreds of other decentralized virtual currencies—often called “altcoins”—also in circulation VIRTUAL CURRENCY VALUATION Most virtual currency in centralized systems has a fixed value whereby the controlling company sets an exchange rate Often, this value is linked to some quantity of national currency For example, one Liberty Reserve Dollar was equal to one U.S dollar, and one unit of WMZ, a currency controlled by WebMoney, also is equal to one U.S dollar The value also may be fixed to some other real-world value Companies running digital precious metals systems fix their virtual currency’s value to some quantity of a precious metal, commonly gold bullion Alternately, a virtual currency’s value may fluctuate based on the supply of and demand for units of that currency This model is seen frequently in decentralized virtual currencies, which have no company to enforce a pegged exchange rate EXCHANGERS AND THIRD-PARTY SERVICES While users can transact entirely in virtual currency within a system, most individuals also want to cash in and out of the system, converting their dollars to virtual currency and, ultimately, back again This exchange function is central to the virtual currency ecosystem In centralized models the user may deal directly with the administrating company to cash in or out However, not all companies offer this service, and decentralized systems lack the capability altogether As a result, third-party companies have established themselves as “exchangers,” providing a venue for customers to cash in and out of virtual currency or to convert from one virtual currency to another Exchangers are one component of a network of sites and services that have developed to support and enhance the virtual currency landscape Under U.S money services business regulations, any business that transfers virtual currency from one person or location to another is obligated to register with the Financial Crimes Enforcement Network (FinCEN) and comply with Bank Secrecy Act (BSA) requirements, including implementing anti-money-laundering programs and filing suspicious activity reports (SARs).3 Additionally, many states require money transmitters to obtain state licenses The U.S Department of Justice has identified these regulations as “crucial tools in preventing malicious actors from exploiting virtual currency systems in furtherance of illicit activity.”4 In the United States numerous virtual currency services have made significant strides to comply with regulations However, many still struggle to implement effective anti-money-laundering programs and to comply with state-level requirements This is particularly problematic in the current business environment, where many virtual currency companies begin operation illegally before ensuring full compliance with all applicable regulations Where this occurs, even wellintentioned systems are left vulnerable to exploitation by criminals and terrorists LAW ENFORCEMENT INTERESTS Virtual currency systems are not inherently illicit and are used by legitimate consumers every day to conduct legal transactions These systems allow users to move funds quickly and efficiently across great distances without being tied to one country’s currency or worrying about international conversions Like nearly any financial product, however, these systems can be exploited by criminals to further their illegal activities Therefore, law enforcement has two primary interests in virtual currency First, officers will investigate criminals who use virtual currency to move or hide money derived from criminal or terrorist acts (i.e., money laundering) Second, investigators will look at virtual currency businesses that violate laws proscribing money laundering or illegal money transmission As virtual currency systems have evolved, so, too, has their criminal-user base Early adopters of virtual currency generally were cybercriminals and perpetrators of specialized, complex financial fraud Now, as criminals become more technologically proficient and systems grow more userfriendly, virtual currency is seeing a wider user base, spanning from the most sophisticated cyberactors to low-level drug dealers Spain Bitcoins have not yet been regulated in Spain and are not considered to be legal currency since they are not issued by the government’s monetary authority However, they may be considered digital goods or things under the Civil Code,[121] and transactions with bitcoins may be governed by the rules of barter contained in the Civil Code,[122]according to the analysis of one Spanish law firm.[123] Merchants who accept bitcoins are required to issue an invoice with value-added tax in euros.[124] Spain was the second country in the world to seize bitcoins during an investigation of fraudulent transactions conducted with bitcoins, according to a November 2013 report by El Mundo.[125] Back to Top South Korea There are at present no laws in South Korea regulating the use of the Bitcoin system However, the president of the Bank of Korea recommended at a press conference on December 12, 2013, that the bitcoin be regulated in the future.[126] Sweden The Swedish Skatterättsnämnden (Swedish Tax Board) has given a preliminary ruling on Value Added Tax (VAT) on bitcoins, stating that trade in bitcoins is not subject to Swedish VAT, but is instead subject to the Finansinspektionen (Financial Supervisory Authority) regulations and treated as a currency The decision has been appealed by the Swedish Tax Authority (Skatterättsnämnden, Mervärdesskatt: Handel med bitcoins [VAT: Trade with Bitcoins] (Oct 14, 2013),http://skatterattsnamnden.se/skatterattsnamnden/forhandsbesked/2013/forhands besked2013/mervardesskatthandelmedbitcoins.5.46ae6b26141980f1e2d29d9.html.) The Authority has not issued a determination of the applicability of the Income Tax Act with respect to the potential capital gains from bitcoins The Swedish Financial Authority has made the determination that bitcoins are subject to its authority as trade in bitcoins (i.e., offering a site where bitcoins can be bought and sold similar to an exchange) is a financial service, subject to a mandatory reporting requirement There is a bitcoin ATM in Stockholm that allows users to buy bitcoins using cash, by depositing into an ATM (Han tar Bitcoin till Sverige [He Brings Bitcoins to Sweden], di.se,http://www.di.se/artiklar/2013/11/15/han-tar-bitcoin-till-sverige/ (last updated Dec 16, 2013); Johan Larsson, Här är Sveriges första bitcoin bankomat [Here Is Sweden’s First Bitcoin ATM] (Dec 9, 2013), internetworld, http://internetworld.idg.se/2.1006/1.537928/har-arsveriges-forsta-bitcoin-bankomat.) UPDATE (Oct 28, 2014): On October 6, 2014 representatives of the Swedish Enforcement Authority announced that that it will start to investigate and seize Bitcoin holdings when collecting funds from indebted individuals Additional information on this topic is available UPDATE (June 5, 2015): On April 24 Swedish Tax Authority published a guideline on how it will view and tax mined bitcoins for the 2014 tax year Unless specific conditions are met the digital currency mined is considered income from hobby, and generally tax exempt Additional information on this topics is available Taiwan As of January 13, 2013, Taiwan had not passed any legislation regulating the use of bitcoins On December 30, 2013, the Central Bank of the Republic of Taiwan and the Financial Supervisory Commission (FSC) issued a warning to the public about the risks in dealing with bitcoins The regulators said the bitcoin is not a real currency, but a “highly speculative virtual commodity.” The general public was warned about the specific risks associated with accepting, trading, or holding bitcoins If financial institutions use bitcoins, according to the warning, the Central Bank and the FSC may, in accordance with laws and regulations, take necessary regulatory actions at the appropriate time.[127] Thailand According to news reports, the Bank of Thailand ruled the bitcoin illegal on July 29, 2013.[128] However, it appears that “it issued a preliminary ruling that using bitcoins was illegal because of a lack of existing laws” in the case of a currency-exchange license application by Bitcoin Co Ltd Other businesses that have licenses have continued operating bitcoin exchanges in Thailand.[129] Turkey No formal regulations on the bitcoin exist in Turkey The bitcoin, according to a press release issued in November 2013 by the country’s Banking Regulation and Supervision Agency, is not considered electronic money within the scope of the newly enacted Law on Payment and Securities Reconciliation Systems, Payment Services, and Electronic Money Institutions,[130] “and thus its surveillance and supervision are not possible within the frame of the Law.”[131] The press release goes on to warn the public that the lack of identification of the parties involved in bitcoin or similar virtual money transactions “creates a suitable environment for these virtual monies to be used in illegal activities.”[132] It adds that the bitcoin or similar virtual money also poses risks because its market value may be extremely volatile; it may be stolen from a digital wallet, lost, or illegally used without the owners’ knowledge; and it may be subject to operational errors resulting from irreversible transactions or to abuses inflicted by malicious vendors.[133] One Turkish commentator points out that because Bitcoin is independent of any control mechanism, it is not possible to freeze or seize Bitcoin accounts.[134] Some financial experts in Turkey liken Bitcoin, in terms of its features and pattern of development, to Tulip mania in Holland, the Mississippi balloon in France, or the Enron or mortgage balloons in the United States, because the bitcoin “has no use value, but only exchange value.”[135] Moreover, in their view, because it has no intrinsic worth other than what others are willing to pay for it, “it is always in a bubble.”[136] Nevertheless, bitcoin use is apparently flourishing in Turkey There is a Turkish Lira-Bitcoin exchange, called BTCTurk, and leftover foreign currency can be exchanged at the Istanbul Ataturk Airport for bitcoins through a Traveler’s BOX, a machine like an ATM.[137] BTCTurk, which was launched in July 2013, is reportedly the first company in Turkey “to enable the exchange of Turkish lira for bitcoin and vice versa.”[138] United Kingdom There has been no official statement published on the Bank of England’s website regarding its position towards Bitcoin In the latest quarterly reports from the Bank, Bitcoin is expressly excluded.[139]> The government of the United Kingdom has stated that the bitcoin is currently unregulated.[140] A high-level review of bitcoin use took place in the summer of 2013, at which time concerns were raised as to the lack of transparency with the use of the coin, but it was left unregulated.[141] While bitcoins are not regulated, it has been reported that Her Majesty’s Revenue and Customs has classed bitcoins as “single purpose vouchers,” rendering any sales of them liable to a valueadded tax of 10–20% This has been strongly criticized by those selling bitcoins as being “a show stopper for the UK Bitcoin industry.”[142] There is no specific reference on Her Majesty’s Revenue and Customs site to bitcoins Several Freedom of Information requests for information about meetings involving discussions of the bitcoin at different government departments and bodies have been rejected in accordance with sections 31 and 35 of the Freedom of Information Act[143] Section 31 provides that information is exempt from the provisions of the Freedom of Information Act if it will prejudice law enforcement, with the reasons cited as “prejudic[ing] the activities of one or more of the law enforcement agencies.” Section 35 of the Act provides that information is exempt if it relates to the formulation or development of government policy.[144] Global Legal Research Directorate Staff January 2014 [1] Bitcoin is a peer-to-peer payment system and digital cryptocurrency developed in 2009 This report follows the convention established by the official Bitcoin website of capitalizing “Bitcoin” when describing the concept of Bitcoin, or the entire network itself, and not capitalizing “bitcoin” when describing the bitcoin as a unit of account (often abbreviated BTC or XBT) Some Bitcoin Words You Might Hear, Bitcoin, http://bitcoin.org/en/ vocabulary (last visited Jan 15, 2014) [2] Hanun “chongbu pit’uk’oin kyuje mandu rora” [Bank of Korea:“Government Needs to Make Bitcoin Regulation”], Hankooki (Dec 27, 2013), http://economy.hankooki.com/lpage/economy/201312/e201312271 5412370070.htm [3] CONSTITUCIÓN DE LA NACIÓN ARGENTINA [NATIONAL CONSTITUTION OF ARGENTINA], Aug 22, 1994, art 75, para 6, http://www.constitution.org/cons/argentin.htm [4] Ley No 24.144, Carta Orgánica del Banco Central de la República Argentina [Law No 24,144, Charter of the Central Bank of the Republic of Argentina] art 30, Oct 13, 1992 http://www.infoleg.gob.ar/infolegInternet/ anexos/0-4999/542/norma.htm (Arg.) [5] Bitcoin: Fiebre Argentina por la Máquina de Dinero Digital [Bitcoin: Argentine Fever for the Digital Money Machine], LA NACIÓN (June 30, 2013), http://www.lanacion.com.ar/1596773bitcoin-pasion-argentina-por-la-nueva-maquina-de-hacer-billetes-digitales; Argentina es uno de los países que más usa el bitcoin [Argentina Is One of the Countries That Uses the Bitcoin], CLARÍN (Dec 31, 2013), http://www.clarin.com/sociedad/Argentina-paises-Bitcoin-monedavirtual_0_1057694271.html [6] See, e.g., Andres Chomczyk, Situación Legal del Bitcoin en Argentina, ELBITCOIN.ORG, (Oct 10, 2013), http://elbitcoin.org/situacion-legal-de-bitcoin-en-argentina./ [7] CÓDIGO CIVIL [CIVIL CODE] art 2311, http://www.infoleg.gov.ar/infolegInternet/anexos/105000-109999/109481/ texact.htm (last visited Dec 31, 2013) (Arg.) [8] Id art 1323 [9] Kate Walsh & Jason Murphy, ATO Targets Bitcoin Users, AUSTRALIAN FINANCIAL REVIEW (June 24, 2013), http://www.afr.com/p/technology/ato_targets_bitcoin_users_oawpzLQHDz2vEUWtvYLTWI [10] Liz Tay, The ATO Says Bitcoins Have Been Taxable Since the Get-Go, BUSINESS INSIDER AUSTRALIA (June 25, 2013), http://www.businessinsider.com.au/the-ato-saysbitcoins-have-been-taxable-since-the-get-go-2013-6 [11] Bianca Hartge-Hazelman, Glenn Stevens Says Bitcoins Show Promise, But So Did Tulips, THE AUSTRALIAN FINANCIAL REVIEW (Dec 13, 2013), http://www.afr.com/p/national/glenn_stevens_says_bitcoins_show_GWLQFcefJfF4Rmi E0Z08AJ; Full Transcript: Glenn Stevens on the $A, Rates and Growth, THE AUSTRALIAN FINANCIAL REVIEW (Dec 13, 2013), http://www.afr.com/p/national/economy/full_transcript_glenn_stevens_on_g8FIuePVTxTVnSVJ nv5knM [12] Jim Urquhart, Bit-Heist: Over $1mn in Bitcoins Stolen from Australian Online Bank, RT.COM (Nov 8, 2013), http://rt.com/news/bitcoin-hacking-stolen-million-417/ [13] Question écrite no 5-8723 de Martine Taelman du 16 avril 2013 au ministre des Finances [Written Question No 5-8723 of April 16, 2013, from Martine Taelman to the Minister of Finance], SÉNAT DE BELGIQUE (July 31, 2013), http://www.senate.be/www/?MIval=/index_senate&MENUID=23100&LANG=fr (search by question no.) [14] Lei No 12.865, de de Outubro de 2013 [Law No 12,865 of October 9, 2013], http://www.receita.fazenda.gov br/Legislacao/leis/2013/lei12865.htm (Braz.) [15] Id art 6(I) [16] Id art 6(VI) [17] Id art 15 [18] David George-Cosh, Canada Says Bitcoin Isn’t Legal Tender, THE WALL STREET JOURNAL (Jan 16, 2014), http://blogs.wsj.com/canadarealtime/2014/01/16/canada-saysbitcoin-isnt-legal-tender/ [19] Id [20] Id [21] Id [22] Revenue Canada Says BitCoins Aren’t Tax Exempt, CBC NEWS (Apr 26, 2013), http://www.cbc.ca/news/ business/revenue-canada-says-bitcoins-aren-t-tax-exempt-1.1395075 Jasper Hamill, Canadian Regulators Welcome US Bitcoin Refugees with Open Arms, REGISTER (May 20, 2013), http://www.theregister.co.uk/2013/05/20/canada_welcomes_bitcoin_traders_fintrac_letter/ [23] Bitcoin, la Revolución del Dinero [Bitcoin, the Money Revolution], CAPITAL ONLINE (Aug 12, 2013), http://www capital.cl/negocios/bitcoin-la-revolucion-del-dinero/ [24] Bitcoin, la Revolución del Dinero [Bitcoin, the Money Revolution], Capital Online (Aug 12, 2013), http://www capital.cl/negocios/bitcoin-la-revolucion-del-dinero/ [25] Moneda Virtual Bitcoin Crece en el Mundo y Suma Adeptos en Chile [Virtual Money Bitcoin Grows in the World and Adds Followers],El Mercurio (Nov 18, 2013), http://diario.elmercurio.com/detalle/index.asp?id={b967addd-8fbc-495b-be4e-eb4e60603fde (registration required) [26] Bitcoin Paradise, The Economist (Dec 25, 2013), http://www.economist.com/blogs/schumpeter/2013/12/ libertarian-enclaves (registration required); Galt’s Gulch Chile Becomes First Libertarian Community Accepting Bitcoin, Galt’s Gulch Chile (Nov 12, 2013), http://galtsgulchchile.com/News/Detail/10 [27] 关于防范比特币风险的通知 [Notice on Precautions Against the Risks of Bitcoins] (issued by the People’s Bank of China, the Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission, Dec 3, 2013) Yin Fa, 2013, No 289, http://www.pbc.gov.cn/publish/goutongjiaoliu/524/2013/20131205153156832222251/20131205 153156832222 251_.html (China) An unofficial English summary of the Notice isavailable at BTC CHINA, https://vip.btcchina com/page/bocnotice2013 (last visited Jan 13, 2014) [28] Id § [29] Id § [30] Id § 3–4 [31] Croatia Allowed to Use Bitcoin, Coinspot.ru (Dec 16, 2013), http://coinspot.ru/news/xorvatiya-razreshila-ispolzovanie-bitkoina/ (in Russian) [32] Croatian Central Bank Establishes that Bitcoin Is Legal in Croatia, Reddit.com (Dec 9, 2013), http://www reddit.com/r/Bitcoin/comments/1sjgby/croatian_central_bank_establishes_that_bitcoin_is/ [33] Id [34] Cyprus Central Bank Warns About Risks in Use of Bitcoin, Famagusta Gazette (Dec 10, 2012), http://fama gusta-gazette.com/cyprus-central-bank-warns-about-risks-in-use-of-bitcoinp21692-69.htm [35] Advarsel mod virtuelle valutaer (bitcoin m.fl.) [Warnings Against Digital Currencies (Bitcoins etc.)], Finanstilsynet (Dec 17, 2013), http://www.finanstilsynet.dk/da/Nyhedscenter/Pressemeddelelser/2013/Advarsel-mod-virtuellevalutaer-bitcom-mfl-2013.aspx [36] Id [37] What the Bank of Estonia Thinks About Bitcoin, Dv.ee (Dec 19, 2013), http://www.dv.ee/article/2013/12/19/chto-bank-jestonii-dumaet-o-bitkoine (in Russian) [38] Emma Rowley, Russians Most Interested in Bitcoin, Searches Show, The Telegraph (Apr 6, 2013), http://www telegraph.co.uk/finance/economics/9976524/Russians-most-interested-inBitcoin-searches-show.html [39] Dv.ee, supra note 37 [40] European Central Bank, Virtual Currency Schemes (Oct 2012), http://www.ecb.europa.eu/pub/pdf/ other/virtualcurrencyschemes201210en.pdf [41] Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the Taking Up, Pursuit and Prudential Supervision of the Business of Electronic Money Institutions, Amending Directives 2005/60/EC and 2006/48/EC and Repealing Directive 2000/46/EC, 2009 O.J (L 267) 7, http://eur-lex.europa.eu/ LexUriServ/LexUriServ.do?uri=OJ:L:2009:267:0007:0017:EN:PDF [42] Id art 2(2) [43] Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on Payment Services in the Internal Market, Amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and Repealing Directive 97/5/EC, 2007 O.J (L 319) 1, http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:319: 0001:0036:EN:PDF [44] European Central Bank, supra note 40, at 43 [45] Id [46] Press Release, European Banking Authority, EBA Warns Consumers on Virtual Currencies (Dec 13, 2013), http://www.eba.europa.eu/-/eba-warns-consumers-on-virtual-currencies [47] Vero Skatt, Inkomstbeskattning av virtuella valutor [Income Taxation of Virtual Currencies] (Aug 28, 2013, http://www.vero.fi/svFI/Detaljerade_skatteanvisningar/Inkomstbeskattning_av_personkunder/Inkomst beskattning_av_virtuella_valutor%2828454%29 [48] Id [49] Banque de France, Les dangers liés au développement des monnaies virtuelles: l’exemple du bitcoin [The Dangers of the Development of Virtual Currencies: The Bitcoin Example], Focus No 10 (Dec 5, 2013), http://www.banquefrance.fr/fileadmin/user_upload/banque_de_france/publications/Focus-10-stabilitefinanciere.pdf [50] Id at [51] Id at 2–3 [52] Id at [53] Id [54] Id., referring to SAS Macaraja c/ SA Crédit Industriel et Commercial, Tribunal de commerce [Commercial Tribunal] Créteil, 2è ch., Dec 6, 2011 [55] Jens Münzer, Bitcoins: Aufsichtliche Bewertung und Risiken für Nutzer [Bitcoins: Supervisory Evaluation and Risks for Users], BaFin (Dec 19, 2013), http://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Fachartikel/ 2014/fa_bj_1401_bitcoins.html [56] Kreditwesengesetz [Banking Act] (updated Sept 9, 1998), Bundesgesetzblatt I at 2776, as amended, http://www.gesetze-im-internet.de/kredwg/index.html (Ger.) [57] “Bitcoin mining is the process of making computer hardware mathematical calculations for the Bitcoin network to confirm transactions and increase security As a reward for their services, Bitcoin miners can collect transaction fees for the transactions they confirm, along with newly created bitcoins.” Bitcoin, supra note [58] Franz Nestler, Deutschland erkennt Bitcoins als privates Geld an [Germany Recognizes Bitcoins as Private Money], Frankfurter Allgemeine Zeitung (Aug 16, 2013), http://www.faz.net/aktuell/finanzen/devisen-rohstoffe/digitale-waehrung-deutschland-erkenntbitcoins-als-privates-geld-an-12535059.html [59] Bitcoin Greek Register, bitcoinx.gr, http://bitcoinx.gr/apps/katalogos/ (in Greek) (last visited Jan 16, 2014) [60] Press Release, Government of Hong Kong, LCQ1: Monitoring the Use of Bitcoins (Jan 8, 2014), http://www info.gov.hk/gia/general/201401/08/P201401080357.htm [61] Id [62] Höftin stöðva viðskipti með Bitcoin [Controls Stop Trading in Bitcoin], Morgunblaðið (Dec 19, 2013), http://www.mbl.is/vidskipti/frettir/2013/12/19/hoftin_stodva_vidskipti_med_bitcoin/; for a rough translation of this article and comments, see Saevarg, Bitcoin Trading Illegal in Iceland According to Icelandic Central Bank, Reddit, http://www.reddit.com/r/Bitcoin/comments/1t8zf3/bitcoin_trading_illegal_in_iceland_according _to/ (last visited Jan 10, 2014) In connection with Bitcoin mining in Iceland, in particular a business called Cloud Hashing set up in February 2013 that uses over one hundred computers and has mining contracts for 4,500 customers, “keeping 20 percent of its capacity open for its own mining,” see Russell Brandom, Inside a $4 Million Icelandic Bitcoin-Mining Consortium, The Verge (Dec 23, 2013), http://www.theverge.com/2013/12/23/5238128/inside-a-4-millionicelandic-bitcoin-mining-consortium [63] Press Release, Reserve Bank of India, RBI Cautions Users of Virtual Currencies Against Risks(Dec 24, 2013), http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30247; see also RBI Advisory Puts Brakes On Bitcoin Train In India, Times of India (Jan 17, 2014), http://timesofindia.indiatimes.com/business/india-business/RBI-advisory-puts-brakes-on-bitcointrain-in-India/articleshow/28934501.cms [64] Bitcoin Exchanges Shut Shop in India, Hindu (Dec 26, 2013), http://www.thehindu.com/business/Industry/ bitcoin-exchanges-shut-shop-inindia/article5504407.ece [65] First Time in the Country, ED Raids a Bitcoin Seller in Ahmedabad, DNA India (Dec 27, 2013), http://www dnaindia.com/india/report-first-time-in-the-country-ed-raids-a-bitcoin-sellerin-ahmedabad-1941187 [66] Id [67] Indian Bitcoin Operators Resume Operations Cautiously, Hindu (Jan 15, 2014), http://www.thehindu.com/ business/indian-bitcoin-operators-resume-operationscautiously/article5578640.ece [68] Faisal Maliki Baskoro, Bitcoin Finds Itty-Bitty Market in Indonesia, Jakarta Globe (Dec 1, 2013), http://www thejakartaglobe.com/business/bitcoin-finds-itty-bitty-market-in-indonesia/ [69] Dáil Debates 126 (Dec 10, 2013), http://oireachtasdebates.oireachtas.ie/debates%20authoring/debates webpack.nsf/takes/dail2013121000054?opendocument (Ir.) [70] Ela Levy-Weinrib, Government Considers Taxing Bitcoin Profits, Globes (Sept 12, 2013), http://www globes.co.il/serveen/globes/docview.asp?did=1000879015 [71] Niv Elis, Bank of Israel Mulls Regulating, Recognizing Bitcoin Virtual Currency, The Jerusalem Post (Dec 3, 2013), http://www.jpost.com/Business/Business-News/Bank-of-Israelmulls-regulating-recognizing-Bitcoin-virtual-currency-333894; see also Irit Avissar, Banks Ask Regulator for Bitcoin Guidelines, Globes (Dec 3, 2013), http://www.globes.co.il/serveen/globes/docview.asp?did=1000898665 [72] See Introduction to Bitcoin, Israeli Bitcoin Association, http://www.bitcoin.org.il/%d7%9e%d7%91% d7% 95%d7%90%d7%9c%d7%91%d7%99%d7%98%d7%a7%d7%95%d7%99%d7%9f/ (in Hebrew) (last visited Dec 23, 2013) [73] E.g., Elis, supra note 71 [74] Sivan Aizescu, Israeli Banks Report Extortion Attempt by Hacker Demanding Payoff in Bitcoin, Haaretz (Dec 19, 2013), http://www.haaretz.com/business/.premium-1.564459 [75] European Central Bank, supra note 40 [76] Directive 2009/110/EC, supra note 41 [77] Decreto Legislativo 16 Aprile 2012, n 45 [Legislative Decree No 45 of April 16, 2012], Normativva, http://www.normattiva.it/uri-res/N2Ls?urr:nir:statodecreto:legislativo:2012;045 (It.) [78] Giulia Arangüena De La Paz, Bitcoin, moneta virtuale e mezzo di pagamento reale: l’UE meglio degli USA? (In teoria, sì) [Bitcoin, Virtual Currency and Actual Payment Method: Is the EU Better than the USA (In Theory, Yes)], Key4Biz (July 8, 2013), http://www.key4biz.it/News/2013/07/08/Net_economy/Bitcoin_moneta_virtuale_e_mezzo _di_pagamento_reale_218903.html [79] Summary of Bank of Japan Press Conference, at 10 (Dec 24, 2013), http://www.boj.or.jp/announcements/press/ kaiken_2013/kk1312c.pdf (in Japanese) [80] Mark Smalley, Bank Negara’s Officially Unofficial Statement on Bitcoin Is No Statement, Betanomics (Nov 4, 2013), http://betanomics.asia/blog/bank-negara-malaysian-governmentunoffical-bitcoin-statement [81] Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on Markets in Financial Instruments Amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and Repealing Council Directive 93/22/EEC, 2004 O.J (L 145) 1, http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004L0039:EN:HTML [82] Charles Casar, Malta Bitcoin Company, Chetcuti Cauchi, http://www.ccmalta.com/publications/ malta_bitcoin_company (last visited Jan 8, 2014) [83] Jon Matonis, First Bitcoin Hedge Fund Launches from Malta, Forbes (Aug 3, 2013), http://www.forbes.com/sites/jonmatonis/2013/03/08/first-bitcoin-hedge-fund-launches-frommalta/ [84] The Minister recently pointed this out in response to written questions posed by the Dutch parliament See Minister Dijsselbloem: virtuele valuta’s zoals Bitcoin vallen niet onder toezicht AFM [Authority for Financial Markets] en DNB [Dutch Central Bank][Minister Dijsselbloem: Virtual Currencies Like Bitcoin Do Not Fall Under the Supervision [of the] AFM and DNB], AFM (Dec 20, 2013), http://www.afm.nl/nl/nieuws/2013/dec/toezicht-bitcoins.aspx Ministry of Finance, Beantwoording Kamervragen over het gebruik van en toezicht op nieuwe digitale betaalmiddelen zoals de Bitcoin [Answers to Parliamentary Questions on the Use and Control of New Digital Means of Payment Such as Bitcoin] (Dec 19, 2013), available on the Government of the Netherlands website, at http://www.rijksoverheid.nl/onderwerpen/betalingen-enbeleggingsverzekeringen/documenten-en-publicaties/kamerstukken/2013/12/19/beantwoordingkamervragen-over-het-gebruik-van-en-toezicht-op-nieuwe-digitale-betaalmiddelen-zoals-debitcoin.html [85] Branko Collin, Bitcoin Income Shall Be Taxed, Dijsselbloem Says, 24 Oranges (June 17, 2013), http://www.24 oranges.nl/2013/06/17/bitcoin-income-shall-be-taxed-dijsselbloem-says/ [86] Wet op het financieel toezicht [Act on Financial Supervision] (Sept 28, 2006, as last amended Sept 19, 2013, in force on Jan 1, 2014) § 1:1, http://wetten.overheid.nl/BWBR0020368/geldigheidsdatum_31-12-2013 (Neth.); unofficial English translation as of Apr 1, 2009, http://www.rijksoverheid.nl/documenten-enpublicaties/brieven/ 2009/11/16/engelse-vertaling-van-de-wft.html (click on “Download ‘Engelse vertaling van de Wft’ ” PDF document) [87] Collin, supra note 85 [88]> Id [89] Id A “financial product” is defined under the Act on Financial Supervision as “an investment object; a current account including the ancillary payment facilities; electronic money; a financial instrument; credit; a savings account including the ancillary savings facilities; an insurance not being a reinsurance; or another product to be specified by Decree.” Act on Financial Supervision § 1:1 [90] Ministry of Finance, supra note 84, Question/Reply [91] Litecoin is a peer-to-peer Internet currency based on the Bitcoin protocol but differing from Bitcoin in that it provides faster transaction confirmations and can be more efficiently mined with consumer-grade hardware What is Litecoin?, litecoin, https://litecoin.org/ (last visited Jan 24, 2014) [92] Consumers Should Be Aware of the Risks of Virtual Currencies, De Nederlandsche Bank (Dec 3, 2013), http://www.dnb.nl/en/news/news-and-archive/nieuws-2013/dnb300672.jsp# [93] Id [94] Alex Hern, Bitcoin Hype Worse Than ‘Tulip Mania’, Says Dutch Central Banker, The Guardian (Dec 4, 2013), http://www.theguardian.com/technology/2013/dec/04/bitcoin-bubbletulip-dutch-banker As of December 5, 2013, a partly tongue-in-cheek article in The Atlantic noted that “you can buy more than 700 tulips with one bitcoin That’s a precipitous rise in value—at the beginning of October 2013, you couldn’t even buy 90 tulips with one bitcoin And two years ago? A single bitcoin could buy you almost exactly two measly tulips.” Robinson Meyer, How Many Tulips Can You Buy With One Bitcoin?, The Atlantic (Dec 5, 2013), http://www.theatlantic.com/tech nology/archive/2013/12/how-many-tulips-can-you-buy-withone-bitcoin/282062/ [95] Notes and Coins Frequently Asked Questions, Reserve Bank of New Zealand, http://www.rbnz.govt.nz/notes_ and_coins/0094941.html (last visited Dec 23, 2013) [96] Rebecca Howard, New Zealand Central Bank Joins Others in Warning on Bitcoins, The Wall Street Journal (Dec 11, 2013), http://blogs.wsj.com/economics/2013/12/11/new-zealandcentral-bank-joins-others-in-warning-on-bitcoins/?mod=WSJBlog [97] Laura Walters, Bitcoin: Beauty or Bubble?, Stuff.Co.NZ (Dec 28, 2013), http://www.stuff.co.nz/technology/ digital-living/30008862/bitcoin-beauty-or-bubble [98] Andrea Sepúlveda, Nicaragua Ya Acepta Moneda Virtual Bitcoin, El Nuevo Diario (Jan 13, 2014), http://www.elnuevodiario.com.ni/nacionales/307477 [99] Wojciech Milczarek et al., Polska potęgą bitcoin – szanse i zagrożenia [Poland – A Bitcoin Superpower: Opportunities and Threats], Seminarium Bitcoin Club SGH, https://www.facebook.com/events/138077101217 5255 (last visited Jan 16, 2014) [100] Poland Does Not Consider Bitcoin Transactions Illegal, Coinspot.ru (Dec 21, 2013), http://coinspot.ru/news/ polsha-ne-schitaet-bitkoin-tranzakcii-nezakonnymi/ (in Russian) [101] Id [102]Press Release, Banco de Portugal,Meios de Pagamento: Bitcoin [Bank of Portugal, Means of Payment: Bitcoin] (Nov 22, 2013), http://www.bportugal.pt/ptPT/OBancoeoEurosistema/Esclarecimentospublicos/Paginas/meiosde pagamento.aspx [103] European Central Bank, supra note 40 [104] Press Release, Banco de Portugal, supra note 102 [105] Id [106] Id [107] Id [108] Artem Tolkachev & Kseniia Osipova, Possibilities and Risks of Using Bitcoin in Russia, ATPLaw.ru (Aug 29, 2013), http://www.atplaw.ru/useful/articles/vozmozhnosti-i-riskiispolzovaniya-bitkoin-v-rossii.html (in Russian) [109] Id [110]Gref: Development of Virtual Currencies Cannot Be Stopped, Newsland.ru (Dec 14, 2013), http://newsland com/news/detail/id/1293000/ (in Russian) [111] Id [112] Irene Tham, Bitcoin Users Beware: MAS, Straits Times (Sept 22, 2013), available at Asiaone Business, http://business.asiaone.com/news/bitcoin-users-beware-mas [113] Id [114] Terence Lee, Singapore Government Decides Not to Interfere with Bitcoin, TechinAsia (Dec 23, 2013), http://www.techinasia.com/singapore-government-decides-interfere-bitcoin/ [115] Id [116] Michael Lee, Singapore Issues Tax Guidance on Bitcoins, ZDNet (Jan 9, 2014), http://www.zdnet.com/singa pore-issues-tax-guidance-on-bitcoins-7000024966/ [117] Id [118] Tax Treatment of Virtual Currency Operations DOH-2 and CITA-2, Republic of Slovenia, Ministry of Finance: Tax Administration (Dec 23, 2013), http://www.durs.gov.si/si/davki_predpisi_in_pojasnila/dohodnina_pojasnila/dohodek_iz_kapitala / dobicek_iz_kapitala/vrednostni_papirji_in_delezi_v_gospodarskih_druzbah_zadrugah_in_drugih _oblikah_organiziranja _ter_investicijski_kuponi/davcna_obravnava_poslovanja_z_virtualno_valuto_po_zdoh_2_in_zdd po_2/ (in Slovenian) [119] Id [120] Slovenia Clarified the Question of Bitcoin Taxation, Beforeitsnews.com (Dec 25, 2013), http://beforeitsnews com/economy/2013/12/slovenia-clarified-the-question-of-bitcoin-taxation2581938.html [121] Código Civil [Civil Code] arts 335, 337 & 345 (July 25, 1889, as amended), Boletín Oficial del Estado, http://boe.es/buscar/act.php?id=BOE-A-1889-4763 (Spain) [122] Id art 1538 [123] Pablo Fernández Burguo, 12 Cosas que Deberías Saber Antes de Usar Bitcoins (La Ley y el Bitcoin) [Twelve Things You Should Know Before Using Bitcoins (The Law and Bitcoin)], Abanlex Abogados (Nov 27, 2013), http://www.abanlex.com/index.php?s=bitcoin (scroll down to find article) [124] Id [125] Pablo Romero, Así se Incauta la Policía de Bitcoins [This is How Bitcoins Are Seized by the Police], El Mundo (Nov 1, 2013), http://www.elmundo.es/tecnologia/2013/11/01/5270d45363fd3da7618b4576.html [126]Hanun “chongbu pit’uk’oin kyuje mandu rora” [Bank of Korea:“Government Needs to Make Bitcoin Regulation”], Hankooki (Dec 27, 2013), http://economy.hankooki.com/lpage/economy/201312/e201312271 5412370070.htm [127] 比特幣並非貨幣，接受者務請注意風險承擔問題 [Bitcoin Is Not Real Currency; Accepters Please Look to the Risks] (Dec 30, 2013), http://www.cbc.gov.tw/ct.asp?xItem=43531&ctNode=302 [128] Jake Maxwell Watts, Thailand’s Bitcoin Ban Is Not Quite What It Seems, Quartz (July 31, 2013), http://qz.com/ 110164/thailands-infamous-bitcoin-crackdown-is-not-quite-what-it-seems/ [129] Id See also, Bangkok Pundit, Has Bitcoin Really Been Banned in Thailand?, Asian Correspondent (July 31, 2013), http://asiancorrespondent.com/111332/has-bitcoin-been-bannedfrom-thailand/ [130] Ödeme ve Menkul Kıymet Mutabakat Sistemleri, Ödeme Hizmetleri ve Elektronik Para Kuruluşları Hakkında Kanun [Law on Payment and Securities Reconciliation Systems, Payment Services, and Electronic Money Institutions] (June 20, 2013), No 6493, 28690 Resmỵ Gazete [Official Gazette] (June 27, 2013), http://www resmigazete.gov.tr/eskiler/2013/06/2013062714.htm (Turkey) [131] Press Release, 2013/32, Banking Regulation and Supervision Agency, [untitled] (Nov 25, 2013), http://www bddk.org.tr/websitesi/english/Announcements/Press_Releases/12585bitcoin_press_release_eng_ 3.pdf [132] Id [133] Id [134] Ceren Savaser, Bitcoin and Taxation Under Turkish Legislation,HG.org Legal Resources(Dec 9, 2013), http://www.hg.org/ article.asp?id=31755 [135] Id [136] Id [137] Maria Santos, Travelers BOX at Turkish Airport Allows You to Exchange Currency Leftovers for Bitcoin BitCoin Examiner.org(Nov 18, 2013), http://bitcoinexaminer.org/travelersbox-at-turkish-airport-allows-you-to-exchange-currency-leftovers-for-bitcoin/ The article includes a picture of the Travelers BOX [138] Emily Spaven, BTCTurk Becomes the First Turkish Lira-to-Bitcoin Exchange, CoinDesk (July 31, 2013), http://www.coindesk.com/btcturk-becomes-the-first-turkish-lira-to-bitcoinexchange/ [139] Mona Naqvi & James Southgate, Bank of England, Banknotes, Local Currencies and Central Bank Objectives, 53: Quarterly Bulletin 319 n (2013), http://www.bankofengland.co.uk/ publications/Documents/quarterlybulletin/2013/qb1304.pdf [137] Banking: Bitcoins, Parl Deb., H.L (5th ser.) 4013 (Dec 18, 2013), http://www.publications.parliament uk/pa/ld201314/ldhansrd/text/131218w0001.htm (U.K.) [141] Jane Wild, UK Taxmen, Police and Spies Look at Bitcoin Threat, Financial Times (London) (May 13, 2013), http://www.ft.com/cms/s/2/42ca6762-bbfc-11e2-82df00144feab7de.html#axzz2pdQoiDZO [142] Tom Gullen, The Challenge of Being a Bitcoin Trader, Financial Services Club Blog (Nov 13, 2013), http://thefinanser.co.uk/fsclub/2013/11/the-challenge-of-being-a-bitcoin-trader.html [143] Freedom of Information Act 2000, c 36, http://www.legislation.gov.uk/ukpga/2000/ 36/contents (U.K.) [144] Gullen, supra note 142 Source: https://www.loc.gov/law/help/bitcoin-survey/ ... this virtual currency to purchase goods or services, convert the virtual currency into currency of legal tender and use the currency to purchase goods and services, or transfer the virtual currency. .. and out of virtual currency or to convert from one virtual currency to another Exchangers are one component of a network of sites and services that have developed to support and enhance the virtual. .. Introduction Virtual Currency Investigative Challenges and Opportunities IRS Virtual Currency Guidance FinCEN Fines BTC-e Virtual Currency Exchange $110 Million Application of FinCEN’s Regulations to Virtual