week 11
Response 1 –
Bitcoin can be utilized anonymously to perform money transactions between one users to other user from anywhere all over the world. This have attracted many users including criminals and terror groups. They may misuse bitcoin to purchase illegal goods such as weapons, drugs. For this there were many doubts in many countries whether to legalize the bitcoin. Whereas some countries have taken decision to legalize with some clause. One of the main problem with selecting the legal status of the usage of bitcoin is based on the currency, safety, product or something special. While bitcoin is generally a currency as they have various fundamental qualities of one, the legal term needs a currency to be provided, used and approved by the countries, which is not a situation with bitcoin. The other problem is that not all countries have legalized the use of bitcoin. Some of the countries such as Australia, Canada, Finland and Germany, have legalized for the users and have assured to apply ordinary procured pay administers on bitcoin, whereas various other countries have not yet approved its legalization and its usage.
The US has taken a positive stand towards the use of bitcoin, though various governmental agencies work to mitigate or minimize the usage of bitcoin from illegal activities. The united states department of treasury’s financial crimes enforcements network has been approving hand book on bitcoin which explains bitcoin is not a matter of currency, but as a money service business. This keeps it under the bank secrecy act which needs exchange and payment process to adhere to specific responsibilities such as reporting, registration, and maintaining records of the transactions done by the users.
Even Canada took a friendly stand on bitcoin use by making sure the cryptocurrency is not used for money laundering.
Similarly even Australia treats bitcoin neither money not a foreign money, with the Australian taxation office governing its as a property for capital gains tax benefits Elli Ruslina. (2019).
What are the actions taken on bitcoin users where its usage is banned?
Response 2
Bitcoin is a type of cryptocurrency that entails digital currency created in January 2009 by the prominent, mysterious and pseudonymous Satoshi Nakamoto. The currency guarantees lower transaction rates with no middlemen during the transactions. It is operated by a decentralized authority (the blockchain) that trades, distributes and stores the currency in a decentralized ledger system. Bitcoin transactions pass through recognizable computing power and don’t depend on the government or banks, but owners are valued individually. Besides Bitcoin uncountable benefits, there is much skepticism from the public, especially concerning the legality and legal protection for the transactions (Gifari et al., 2017). This paper discusses the legal protections that exist for Bitcoin users in the United States and other countries. The United States regulates bitcoin in various ways to enhance digital money and users security during transactions as stipulated in the state or federal law. Bitcoin users enjoy legal protection through government attitude and definition, where the government passes favorable regulations exempting cryptocurrencies from state securities. The government enhances sales regulation if transactions constitute the sale of a security or money transmission is considered otherwise. Bitcoin users are covered by the securities laws that govern the resale and issuance, included in the U.S law. The U.S Supreme Court requires “an investment contract” obtained from other people’s organizational and entrepreneurial efforts. Money transmission laws and anti-money laundering requirements enhance bitcoin user protection by considering virtual currency exchange, issuance and redemption of virtual currency under the Bank Secrecy Act (the “BSA”) MSBs regulation by FinCEN (Sotiropoulou & Guégan, 2017). Countries such as Morocco, South Africa and Mexico apply a similar principle to those of the United States and protect the user because the virtual money portrays the countries’ future. Technological advancement and innovation places bitcoin usage in a better place and predicts a brighter future for the world.