How I Learned to Stop Worrying and Love Bitcoin

Building a blog about a single topic, even a fast-evolving one like bitcoin, is daunting. It’s a commitment of time and resources, and it also presumes an appetite for content by the presumed legions of readers. However, there may not be a topic moving faster, or more in need of regular coverage than bitcoin. Since Nakamoto’s seminal white paper was published in 2008, early money punk, fintech and e-gold advocates have marveled over the elegance and relative simplicity of the platform. The miracle of the market (as I call it) where bitcoin obtained significant realizable market value occurred in 2012 and led to a huge market valuation. After an 83% drop in value, bitcoin found a period of relative value stability (and potentially increasing financial utility) and in late 2016 and early 2017 are threatening to overtop its historic highs.

Amazing things have happened for bitcoin in 2016. Long past the drugs and guns of Silk Road, the value spike of 2013, and the hype that followed, Wall Street, big banks, and venture capital woke up to the promise of blockchain technology, and bitcoin hit the headlines. And law enforcement, regulators, and politicians took notice. But, as my friend @Junseth likes to remind me, no matter what the law says, you can’t actually regulate bitcoin. No proclamation from Capital Hill or policy statement by the Chief Executive will change the way that bitcoin functions. As bitcoin’s market value peaks, venture capital flows and mainstream media regularly covers bitcoin and blockchain, it may be tempting to expect that a golden age may be afoot.

However, the law remains a place of discord and frustration. Since 2013’s FinCen guidance related to Money Transmitter Licenses (MTLs) and IRS taxation guidance, bitcoin -related business operations have struggled to understand the continual evolution of what the law requires. The 18 month saga leading to the NYDFS BitLicense, the Espinoza trial, and abortive state efforts to create new regulation (I’m looking at you California, and New Jersey) have further complicated understanding of the legal status of bitcoin, and the obligations imposed on its users. The Coinbase John Doe subpoena, Espinoza appeal and other ongoing legal battles underscore the continuing development of the legal landscape.

This blog exists for a simple reason. The law is changing quickly. Regulators including the IRSCFTC, FinCEN, SEC, the US DOJ, and various state agencies continue to take action against bitcoin companies, and other companies, like Ripple, dealing in blockchain-related technology. The law continues to change, sometimes suddenly, and chaotically. In the face of an absence of law, and then a flurry of contradictory case decisions and emergent regulation, the ethos of bitcoin developers has been – “if we can do it, we should and we will, law be damned- let the law catch up with us.” Well, the law is (somewhat spastically) doing just that- and hopefully those who are developing the bitcoin-based fintech products and services of the future can look here to find the latest developments in the legal world.

Got a question? Email me at: ahinkes@bergersingerman.com.

-Drew

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