Are Cashu mint operators breaking the law? \ stacker news ~bitcoin

pull down to refresh

Are Cashu mint operators breaking the law?

1535 sats \ 66 comments \ @ek 9h bitcoin

@calle seems to think they are not breaking the law, see this note:

I’m pretty sure they are considered MSBs that break money transmission laws without KYC/AML and a license in each state they operate in.

I thought that was clear to everyone using Cashu, especially the one who invented the protocol.

What do you think?

Yes65.2%

No34.8%

23 votes \ 16h left

view all related items

55 sats \ 22 replies \ @optimism 9h

I'm not a judge in the US (or anywhere else) so my vote has no meaning. There's no referendum on interpretation, afaik. Perhaps the poll is a wrong format.

I have a question though: which points from the definition do you count that under? stored value under 3/4?

100 sats \ 21 replies \ @ek OP 9h

Your vote has meaning because I care about what “normal people” think. The poll isn’t about what’s right or wrong. That’s up to how judges will interpret the definition.

which points from the definition do you count that under?

Money transmitter

348 sats \ 16 replies \ @optimism 8h

Oh, I'm not normal. But I'll give you my opinion of the interpretation that I'd want to see, so that you also know the opinion of the insane and can keep track of that in a special column.

Background: I think that any IOU-based bitcoin (cashu, on-exchange, L-BTC, WBTC and many terribly worse association scams that are fully decoupled from BTC like Saylor's stonks, perps and ETFs) cannot be a permanent solution for Bitcoin-as-freedom-money. This means that for me, developing protocols that cannot work without IOU-ness can only be a temporary solution at best and any tech integrating it must be considered throwaway.

Assertions:

Large scale custodial convenience services are a recipe to make people get rekt: The mint is a custodian and you rely on its functioning to get your IOU-sats out. If the IOU isn't honored, the value of your IOU-sats declines. 1 IOU-sat != 1 sat. From this perspective, let it be illegal. Best way to have recourse against scammers other than murder.
Small scale custodial convenience however, where you "Uncle Jim" service your family members, neighbors or social activity groups for example, should be possible, because this allows people to help each other out. From this perspective, let it not be illegal.

Luckily, offering a commercial service is definitely money transmission. Offering a service free of charge, probably shouldn't be, but I'm not sure how that would be interpreted. I hope that it would not be that.

Feel free to apply that to whichever cashu mints you were thinking about.

200 sats \ 15 replies \ @freetx 8h

"Uncle Jim"

I think both of your points are valid, but personally I take issue with the whole encouragement of Bitcoiners to "Uncle Jim". Being a bank, no matter your motives, is not a trivial nor risk-free adventure.

Being someones "Uncle Jim" has a fairly big risk of it ending in disaster - regardless if your were at fault or not. Casually intermingling financial responsibilities with friends/family always has a way to end in the worst possible way for all involved.

If the complexities of using Bitcoin mandate that you need Uncle Jims then its time to either (a) improve that, or (b) acknowledge that professional custodians are a thing for valid reasons.

No rational economic market relies on people providing custodial services for free...thus it makes sense why laws don't make exceptions for "You were a money-transmitter but doing it out of the goodness of your heart"

121 sats \ 6 replies \ @ek OP 6h

Yes, in my experience, involving money in relationships usually ends badly.

Example: I lent my ex €1000—we were in a relationship at the time—and when I started to ask when I would get my money back after a few months (iirc), she started to get defensive.

I fortunately did get my money back at some point, but not my relationship, lol.

100 sats \ 4 replies \ @optimism 6h

she broke up with you because you asked for your money?

100 sats \ 3 replies \ @ek OP 6h

I don't know why she broke up with me, she never told me.

But I assume our communication issues were definitely high on the list.

100 sats \ 2 replies \ @optimism 6h

Yeah, I generally don't lend to people I'm in a relationship/family with. If you see something back, it's awesome. If you don't, also awesome. But then I'm old.

view all 2 replies

100 sats \ 0 replies \ @SwapMarket 4h

there is no lending in a relationship. only gifts from her point of view.

76 sats \ 7 replies \ @optimism 8h

Like I said, IOU-ness can only be temporary; it cannot be a systematic approach. So you shouldn't be "Uncle Jim" forever, unless you're James, then you're that to your sister's kids.

I don't think Bitcoin needs it intrinsically. But humans need to help other humans, preferably not a persistent dependency, but a temporary workaround. These will always be needed, because a planet with 8 billion people on it will always have complexities.

100 sats \ 6 replies \ @freetx 8h

100%

I've always felt that CashU was completely valid for short-term use. Imagine you go to a music festival and you buy CashU tokens using the festivals web app. Then you can go around buying food/drinks and eventually "cash out" back to Bitcoin at end.

This solves many issues with using Bitcoin in such an environment and only introduces a small manageable amount of risk.

Sadly though, this is probably a "money transmitter" service.

77 sats \ 5 replies \ @optimism 8h

Technically, if you're selling tokens at your festival, you're a stored value provider, so you're a money transmitter then too. Festivals are anyway traps where they throw away your bottle of Evian under the excuse that it could be GHB, but somehow the markup inside the gates is 300% - at a minimum.

The incentive of not honoring the IOU afterwards when people want to cash back out is kind of compelling though, so maybe they should just integrate LN straight, without the custodial aspect. Less middlemen, more joy.

222 sats \ 1 reply \ @Scoresby 7h

It feels like cashu exists because lightning is bad at async receive and on boarding with small amounts. People don't want to run an always available node and they don't want to manage liquidity. That is not going to change. Hopefully lightning gets to the point where users aren't aware they are doing these things.

The distinction between mints that operate for profit and not is interesting: if the laws are such that they push mints toward being nonprofit endeavors, I'd say that is bad -- one of the things that might keep a mint honest is if they are making a lot of money.

view all 1 replies

100 sats \ 2 replies \ @freetx 8h

so maybe they should just integrate LN straight

Would be possible but much more complicated. First off you have the dreaded liquidity issues: Is the beer seller going to rebalance his liquidity channels mid-operation to get more inbound liquidity.....

More to the point though, the purpose of "tickets" is that the organizer takes a cut. So you sell beer-for-tickets and at the end of the show the vendor redeems the tickets they earned back to festival organizer for 70% value in cash (or whatever).

Point is, CashU most directly fits that model as Cash Tokens = Tickets pretty directly.

view all 2 replies

100 sats \ 3 replies \ @DarthCoin 8h

Show me in that "law" where it says anything about Bitcoin as money. If they would say something like this their whole fiat system will fall. The whole lie of "legal tender" will fall. That's why they will avoid it and let clueless normies to think that anything can be put under their crap useless so called laws (words on a paper).

THE FEAR is what is driving people to think that gov have any control and/or authority over your money.

Even the term "Money transmitter"is a total bullshit. If money can't be transmitted freely, then it will cease to be money, they became currencies (aka money by decree).

0 sats \ 2 replies \ @optimism 8h

I agree with you that the law shouldn't even exist on this, but I'm unable to change the world like that, right now, at least not for people outside my direct sphere of influence. Maybe in the future.

0 sats \ 1 reply \ @DarthCoin 8h

You don't have to change anything. Just ignore their bullshit.

Reminder:

With the simple fact that you are aware of their bullshit, you won against them. And they know it. The whole power of a government it stays in clueless normies belief in a government. The most dangerous superstition. And when that belief is eroded and destroyed, the whole house of cards will fall down.

0 sats \ 0 replies \ @Solomonsatoshi 8h

How many stackers record calculate and pay the tax due on each and every zap? My guess is zero or close to it. I know I dont. It would make using stacker news unduly burdensome. Just like the fiat debt slavery enabling sponsor-government intended. But realistically most people do not want to break the law because government has trained people to obey and will sometimes make an example of those who do not obey...

136 sats \ 2 replies \ @k00b 2h

All this time I thought he knew. He could also be feigning ignorance which is probably the best thing he can do if he's running one of the mints (or wants to encourage others to run mints).

I can't imagine any lawyer telling him that a centralized mint with any bidirectional convertibility (natively or even on a secondary market) between ecash and bitcoin, advertised or not, is not an MSB/money transmitter.

He must think all other custodians that KYC customers are doing it for fun, because they hate privacy, and any service that's noncustodial when they could use ecash is run by idiots.

Surely the people giving him grants know this.

0 sats \ 0 replies \ @supratic 1h

Is not about thinking others are doing it for fun. There's a huge difference on doing things under compliance after registering a pseudo-bitcoin-fiat-backed "startup" business asking permissions to govt do things with vc versus an anonymous mint-runner that just operate in the private, without asking permissions to anyone, because s/he just knows s/he can do it and is not hurting anyone, nor committing any moral crime.

The people giving him grants must know this.

0 sats \ 0 replies \ @anon 1h

What a sad situation this all is

105 sats \ 4 replies \ @grayruby 6h

No. Mints in themselves where transaction only occur between the members of the mint aren't money transmitters. They are similar to casinos. They take money in give a representative token that the user can use as they see fit while they are on the premises and then cash them out when they are leaving. SN is essentially a mint and cowboy credits are ecash.

I think it's also a scale issue. If you tried to create a mint with 10M users it would be hard to argue you weren't trying to circumvent money transmission laws.

120 sats \ 0 replies \ @nelom 3h

Probably been rinsed a thousand times as an example but didn't the Japanese outlaw gambling and then these ball bearings shops popped up conveniently next to the casinos, and conveniently the casinos accepted the ball bearings as tokens 🤣🤣 I'm sure you've heard that one before

90 sats \ 1 reply \ @ek OP 6h

You cannot withdraw credits, therefore credits are not ecash.

The casino is an interesting example I haven't thought of yet though. Thanks for bringing it up!

44 sats \ 0 replies \ @grayruby 6h

That's true the example is not perfect because credits do become sats for withdraw but they have to go through the rewards pool mixer first and it's not like you put 500 credits into the rewards pool you are guaranteed to get 500 out. That's a fair point.

Maybe SN is more like the casino. You buy your chips, use them all day and then find out if you are up or down when it is time to cashout.

Speaking of rewards. I got territory revenue at 12am ct but no rewards today.

20 sats \ 0 replies \ @Fenix 4h

I think is more similar to gift cards for their “law”

121 sats \ 1 reply \ @stack_harder 6h

the secret ingrediant is crime

0 sats \ 0 replies \ @ek OP 6h

lmao

21 sats \ 0 replies \ @SwapMarket 4h

Whose laws? I live in Antarctica!

200 sats \ 2 replies \ @DarthCoin 8h

WHO VOTED YES, IS A FUCKING STATIST MORON THAT DON'T DESERVE BITCOIN

0 sats \ 1 reply \ @ek OP 6h

Fortunately bitcoin doesn’t care

100 sats \ 0 replies \ @DarthCoin 6h

damn it, I have to agree with ek now :)

169 sats \ 0 replies \ @janetyellen 2h

Ecash is for fags

200 sats \ 8 replies \ @DarthCoin 9h

Are pink shells breaking the "law"?

I think this is a wrong question. Here is the question people should ask:

I've said it many times, but people still ignore the elephant in the room issue:

There's NO LAW that can stop me to trade freely with whatever I want to consider it money. The govs laws refers to their fiat money (aka legal tender), not to Bitcoin or any way of using Bitcoin. And legal tender is totally another story than money and Bitcoin.

Or let's put it more simple:

112 sats \ 7 replies \ @ek OP 9h

Have you told Ross Ulbricht that he could have saved 12 years of his life in prison if he just told the judges they have no authority over him?

0 sats \ 6 replies \ @DarthCoin 9h

His biggest mistake was to trust the lawyers and the "judicial" system. He was railroaded and he didn't know how to defend himself.

0 sats \ 5 replies \ @ek OP 9h

So you didn’t? Why not?

I would love to see his reply.

0 sats \ 2 replies \ @DarthCoin 8h

We are deviating from the subject now, but anyway. I've said it multiple times: Ross was used as a patsy from day 1, even that he didn't know it. They wanted to make an example of him to hit hard on Bitcoin.

And now, being a "presidential" puppy, he could not say anything about the real story. He's silenced for life, but "free".

0 sats \ 1 reply \ @ek OP 8h

So if I’m a patsy, I can’t claim they have no authority over me even though I don’t even know about it? 🤔

21 sats \ 0 replies \ @DarthCoin 8h

Practically yes, if you are railroaded and cornered, your only option is to defend:

0 sats \ 1 reply \ @DarthCoin 9h

if he just sent the judges your blog

That's stupid. You have to learn by yourself and study about how to defend yourself, not just copy pasta and/or pointing to others words.

One thing is to talk about this stuff online and another thing is to prepare yourself, in private.

2 sats \ 0 replies \ @ek OP 8h

I edited my reply before you replied and changed it to this:

if he just told the judges they have no authority over him

But I guess you didn’t see it before you replied

0 sats \ 2 replies \ @DarthCoin 4h

OMG SN stackers are really retarded...

The level of statism on SN is really disturbing...

100 sats \ 1 reply \ @ek OP 4h

@DarthCoin right now:

0 sats \ 0 replies \ @DarthCoin 9m

You just opened the can of worms statists with this post. But is OK, now I can see who is what.

0 sats \ 8 replies \ @standard_sats 7h

Below holy FATF limit 200USD is not really, but then come various new regulations regarding sanctions.

10 sats \ 7 replies \ @ek OP 6h

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

-- https://www.fincen.gov/money-services-business-definition

0 sats \ 2 replies \ @standard_sats 1h

Nice find. I believe US laws are somewhat stricter in that regard.

0 sats \ 1 reply \ @ek OP 1h

Unfortunately, we had to become very familiar with these laws, lol

77 sats \ 0 replies \ @standard_sats 1h

Yes. This is a cursed place to build a business. Very unfortunate, however people in DeFi figured out some ways.

0 sats \ 3 replies \ @DarthCoin 5h

why do you always lower your status to a slave and put yourself under their "laws" ? Slavery by self-slavery LOL

0 sats \ 2 replies \ @ek OP 3h

because I love messing with you

0 sats \ 1 reply \ @DarthCoin 3h

0 sats \ 0 replies \ @ek OP 3h

0 sats \ 0 replies \ @sirstackalot 14m

Who cares? People should be able to freely issue their own tokens without having to ask permission from men in suits and robes. "The Law" is an artificial construct created and exploited by politicians and bureaucrats for their own personal gain. The only law that should be considered is Natural Law (which is sourced in divine law), and issuing your own ecash doesn't violate that.

0 sats \ 0 replies \ @cointastical 3h

Three felonies a day

So I guess with an ecash mint, that makes four

0 sats \ 1 reply \ @jakoyoh629 4h

If transmiting Bitcoin counts as money transmission, and Cashu mints are backed by Bitcoin, then Cashu mints are money transmission.

0 sats \ 0 replies \ @ek OP 3h

it's really that simple

0 sats \ 1 reply \ @OT 7h

What isn't breaking the law these days?

0 sats \ 0 replies \ @DarthCoin 7h

People MUST read: https://cdn.mises.org/thelaw.pdf before saying "breaking the law". I wonder why @ek didn't linked this book in his poll... maybe because he didn't read it?

0 sats \ 0 replies \ @chebibu 8h

chatgpt says yeap. but fuck chatgpt.