So it’s official? You now need to register as a Money Services Business if you want to develop non-custodial wallet software in the US and not go to jail?
Or am I missing nuance?
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Replies (51)
sounds about right
Roman will appeal the judgement. I’m glad he’s fighting it so vehemently. Not sure how much hope there actually is but he’s risking even more of his freedom by not taking a deal and fighting.
I think I read somewhere that if the guilty plea is part of a deal, it doesn’t set precedent. Not 100% on that, though
It's a plea deal that the Samourai devs took, and that doesn't set a precedent.
What it does, however, is empower the DOJ to really make an example out of them, because the Samourai devs are going through a humiliation ritual.
They are pressing xD .... better explained impossible
Tornado was found guilty on the same charge.
I think it’s an attack on KYC.
Don’t you think it’s necessary to have license ? To protect customer fund , in case some bad actor run away with your fund ?
When all Money service registered then it can made a database of business in which can be tracked in case some fraud , customer losing their fund , or bankruptcy. This is why registration is important . In my point of view .
Hi jb , Good Morning , ☀️ what you been up too 😊
And the wheel goes round and round, same as it ever was.
There are other ways of protecting the funds. kYC is not the only way. Additionally if your data is leaked from the KYC database. Until Half the people who decided on KYC don’t go to jail because they don’t take the blame form the leak this is not even a discussion for me
Most big banks have lawsuits every year regarding money laundering and fraud and they pay a fee and never go to jail. However if you are a small business you are screwed. In perfect world you could see it that way, but that system doesn’t take into account corruption from inside the system.
We should be more like Satoshi from now on.
Not exactly. They said "they came to know that some of the bitcoin moving through the service was derived from criminal activity, and they kept marketing and operating the service anyway." [1]
The core issue of the case is that they were helping criminals commit crimes.
If they just made a wallet and didn't know how people were using it, that's a different situation.
FinCEN said they did not require a license, so it seems pretty clear that this is a plea deal. Plead guilty to the lesser charge, even if you are innocent, and end the stress of not knowing your fate. The prosecuters get a basically guaranteed win, the defendents probably get the prosecution to recommend some prison sentence less than the maximum and the judge decides whether to respect that recommendation or not.
I'm not saying I am happy about the outcome, or that I agree that they are in fact guilty of the particular charge they are pleading guilty to; I'm just explaining the case and what developers in the US can learn from this case.
If you are considering making wallet software, please get a lawyer, no matter what country you are in, whether you have control of the funds or not, are offer privacy features, etc. The whole thing is a lightning rod of controversy, seemingly unclear laws, and far too many jurisdictions. Or don't get a lawyer. I'm not the boss of you. 😄
[1] 
Bitcoin Magazine
Samourai Wallet Developers Plead Guilty To Conspiring To Operate An Unlicensed Money Transmitting Business
15 months after being charged with conspiring to commit money laundering and conspiring to operate an unlicensed money transmitting business, the S...
Small business with less equity capabilities or assets is best not doing money lending business . Why would small company with less money have lending money business??? While They are them self need money or liquid cash … it trigger the suspicious already .
The system always corrupt since the system
Built . It advantages certain people only , the only thing we can do is protect the investor , the people that willing invest hope for better future .
There is none literally none on crypto ecosystem that guarantee the investor get their money or assets back if the crypto company rugged them .
I mean loads of people do and seem fine? This case always seemed to be more about making an example out of people who went a bit far poking the bear in their marketing - or potentially a honey pot FED operation all along given how shit a job it did (and that was all about to end anyway so it outlived its use for that purpose anyway.)
But now precedent is a thing and now they have that so maybe we're all just fucked.
Community banks. Credit unions. Your local community can save up in a bank and lend to small businesses and improve the community. There are tons of reason for small businesses to be lending.
Anchorwatch insures Bitcoin. I recommend you look at it a deep further :) I can recommend you some podcasts if you want
ego was the issue, if they would've been quite and let the feds do the marketing for them, we would have a different case.
Or do it like the Ashigaru devs.
It's official that as a dev you should be careful with your t-shirt choices
Is this the same racket they pulled on the e-gold business mentioned in The Genesis Book?
Lot's of nuance necessary here, and entirely unclear as neither Samourai Wallet nor Storm were convicted of licensing violations.
What *is* clear is that non-custodial developers should not, under any circumstances, knowingly transmit criminal funds.
Because the licensing requirement is unclear, it is also unclear *how* developers should do this. I'm not a lawyer and this is not legal advice, but I would either KYC+Chainalysis all the things, or immediately turn off your services for US users so that the DOJ cannot fabricate venue against you.
View quoted note →
No, it’s not officially the law (yet) that developing non-custodial wallet software requires MSB (Money Services Business) registration.
But regulators — especially the DOJ and FinCEN — are increasingly pushing boundaries, and there is a growing risk of legal interpretation that could go in that direction.
It’s true that registration can bring transparency, but it shouldn’t become an excuse to suppress open-source and decentralized software.
I agree that protecting customer funds is critical — but requiring a license for non-custodial software doesn’t make sense. If the developer never touches the funds, there’s nothing to run away with.
developing software vs. running software as a service
no
😂that’s bold
well, what do you mean by "necessary"?
Legislation is pending that, if passed, will end the threat:
Bitcoin Magazine
The CLARITY Act Heads To House Floor For Vote With Protection For Noncustodial Tools Intact
The section of the CLARITY Act (H.R. 3633) that protects Bitcoin and crypto users’ right to use noncustodial wallets as well as developers’ rig...
So publishing a non-custodial bitcoin/ lightning wallet is what than?
I am agreed regulations and
Bureaucracy should very simple as short as possible . It should be enough to fill it up form online 30 minutes to established transmit money company , in that way bussiness or investor not hesitate to registered their business .
Totally agree with you — the path to growth should be open, not full of obstacles. 🚀
Storm, just like the Samourai devs, are going through a humiliation ritual because of BTC privacy-preserving software.
Not to mention it follows Free Software philosophy.
I read the text of the law (it's very short, it seems!) but I'm still not sure where Lightning ⚡ fits into this
If A pays C by Lightning, routing through channels involving B, then it could be argued that B transferred the money from A to C
Of course, Lightning was designed to make it impossible for B to steal the money; B can take the money from A if and only if they first pay C. My fear is that regulators might still abuse this
I guess I should do some research; I'm sure someone has thought of this already 😜
The problem is the government has been regulating by indictment. They have kept things intentionally confusing.
This might be an answer to my own question. I'm reading it now
Medium
Are Bitcoin Lightning Nodes Money Transmitters?
One of the most frustrating things to me is seeing regulators of traditional financial institutions try to force old ways of thinking into…
h That certainly sounds pivotal. The potential implications of such legislation could reverberate across various sectors. What specific aspects do you believe will have the most significant impact?
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I liked this on Lightning and money transmission:
If you run a Lightning node, you are obviously running software that helps people to transmit money. However, the transmitter can't steal the money, and that article gives multiple other reasons why Lightning is expected to be safe from the regs
But I'm still a bit nervous about this. Regulators might try to cause trouble for Lightning nodes
Medium
Are Bitcoin Lightning Nodes Money Transmitters?
One of the most frustrating things to me is seeing regulators of traditional financial institutions try to force old ways of thinking into…
They want all of us to route all bitcoin transactions through intermediaries aka banks
developing and releasing software as code.
but is "publishing" mean deployed, maintained, and operated as a contract/service on the network(s)?
What I don't understand is why you (not you as a person) link so quickly and shamelessly the real identity (Photograph + Real Name) with a cryptocurrency wallet.
Haven't you learned anything from the socialist countries, really?
That's why I raise my eyebrows when they ask for my name and email to open a wallet in Primal. We must protect ourselves; they want to control and censor the free market (as always).
Very similar indeed, it would appear!
Just build it elsewhere
FUCK KYC
This is about coordinating transactions only. A regular wallet dev has little to fear I think.