- June 5, 2015
- Posted by: ArtByte Admin
- Category: AppleBytes
In view of recent changes in the virtual currency regulations in the United States, the final release of the Bit License requirements in New York, and clarifications of the law from the Ripple case, the AppleByte Foundation is re-assessing its responsibilities under US law.
We believe regulation is good for the digital currency ecosystem, including bitcoin and altcoins, and will bring much needed legitimization of the industry. We also believe that for any digital currency to achieve longterm success, meeting these regulatory requirements is a necessity.
So AppleByte is taking a proactive approach to understanding and applying any US regulatory responsibilities, deemed applicable.
In our recent discussions with two separate legal experts in the field, AppleByte has become aware that some of the services provided to users, by the AppleByte Foundation may bring regulatory requirements under current US law.
Under FinCEN (mirrored in the NY laws), the applicable clause requiring registration is this (see section bolded and underlined below):
"c. De-Centralized Virtual Currencies
A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may obtain by their own computing or manufacturing effort.
A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter. In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.
See full FinCEN regs: http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html
This section of the law, speaks to any case where a person or entity has custody (for any time period) of another persons digital currency.
The AppleByte Foundation is currently in the process of obtaining legal opinions on the following services, that may fall under this section:
Online wallet server
Twitter & Reddit tipping app servers
AppleByte Music site
AppleByte has decided to take a conservative approach and temporarily suspend these services during the process of determining and defining regulatory requirements.
We anticipate that this process will take 30 days. Once an understanding of any regulatory requirements is gained and processes are in place to meet the requirements, AppleByte will re-open these services.
During this service suspension:
Miners can move to another pool server operated by a 3rd party.
Users can use the AppleByte core wallets for MAC, Windows, or Android.
Users can give tips to artists directly from their personal wallets to the artist's AppleByte address.
We thank our users in advance for their patience during this temporary suspension of these services. The AppleByte community of artists and art lovers continues to grow at a rate of over 1000 social media followers a week. We currently have a total social media following of over 68,000.
We believe that proactively meeting US regulatory requirements is positive for AppleByte and is another step in separating us from the hundreds of altcoins who either can not or will not meet the current regulations.
We are contacting all users of these services and will allow 15 days for users to transfer their AppleBytes to their personal core wallets.