You're right. I hope courts agree. How about a bitcoin/ lightning node?
A Bitcoin node validates transactions and propagates them to other nodes. It doesn't transmit value as it doesn't hold (custody) any value to transmit. To hold bitcoin is to own a private key that controls it, and nodes don't hold keys (unless you use the Bitcoin Core wallet, but then it would be your own wallet, not used to facilitate the transfer of other people's funds). (*)
I'm not sure about Lightning nodes. Perhaps running a routing node could be construed as money transmission, but AFAIU the routing node doesn't really own the funds, it just participates in a network that allows for the transfer to happen (just like a Bitcoin node does). Custodial Lightning is obvious, as it holds the user's funds and can rug pull. One concern I have about Lightning (in general) is that as it offers a level of privacy, it may be targeted on similar money laundering grounds to Samourai Whirlpool. And even if the law is unclear or it's outright unconstitutional, the degree to which the system hates privacy may make that irrelevant.
(*) Regardless, I'm running my Bitcoin node over Tor. I want neither the state nor ordinary thugs to see my node on the map.
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Good write up. I agree regarding bitcoin nodes, and share your concern about lightning and liquid. How about the SN wallet?
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The SN wallet would be super low hanging fruit. But perhaps not popular enough / not dealing with large enough amounts, at least for now, for them to care. WoS had more reasons to worry and they took action by withdrawing from the US.
Potentially another legal category is Phoenix / Breez type services.
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Yep. Thinking about the implications is nauseating.
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