Re: [Taler] USA regulatory thread part 1

[Ryan Stewart]

On 12/04/2016 09:41 AM, Jeff Burdges wrote:
> It's likely a "Taler exchange in the USA should partner with an existing
> money transmitter".
yes.
> There are however several more limited approaches from which one could
> build up the business that allow starting out with less regulatory
> overhead, albeit with less functionality.
>
> (1) There are good odds these state licenses apply only to one side of
> the transaction, probably the customer[exchange] side since the state's has a
> strong interest in the solvency of the financial institutions its
> residents use.  A Taler exchange accepting CA customers might need to go
Yes, the legal requirements lie on the exchange operator's side only. To 
the wallet user
Taler is like Paypal or any other currently existing payment system- 
little to no obligation
on the "wallet user" other than you pay for what you purchase and do not 
wilfully commit
any fraud or illegal activity. I can't see any conceptual or legal 
issues on the "wallet user"
end of Taler, other than the eventual adoption of Taler by consumers 
over the other already
existing payment systems- aka PayPal or whatever. Eventual "wallet user" 
adoption will be
interesting to observe.

American consumer behavior can sometimes be baffling, especially around 
issues involving money.

> through all that, but a Taler exchange accepting only MO customers can
> likely still pay merchants in CA.
Legally gray.

It's not strictly illegal for a wallet user to use/purchase Talers on an 
exchange located in another State, but that exchange
is obliged under CA State law, to place itself on the proper legal, tax, 
and regulatory footing with the State of California via
the Dept of Business Oversight.

The fact that you are engaging in a transaction with a resident of 
California residing within California & the transaction occurs (half at 
least)
within California places this obligation on the exchange- regardless of 
whether this obligation feasible or legally enforceable. Also regardless
of where the exchange is located. Of course many places on the planet 
are likely beyond the reach of strict enforcement.

The only entities exempted from this in CA State law are the US Postal 
Service, State agencies (Federal, State & certain union
pension systems, etc.), and the State of California itself.

Now what happens if a resident of CA should purchase Talers on an 
exchange within the USA that was not properly licensed to
operate in CA, would be up to the chief of the Dept of Business 
Oversight & other agencies that mediate & enforce disputes
between States within the USA. Legally very gray, I think. As long as 
the parties involved kept the operation low key, and dollar
amounts below a certain threshold, this could work for a while , but I 
am reminded of a line from Simplicissimus- "Der Krug geht
so oft zum Brunnen bis er einmal zerbricht.."

Any enterprise operating this way might not stand long under ordinary 
regulatory scrutiny. Under regulatory neglect, certainly yes.

Consumers or "wallet users" also have some reporting obligations at tax time 
but these are widely ignored for the
most part, as they have been for decades. Those who absolutely must report 
their transactions (B2B), do so. The rest
of the common retail consumers in the population just conveniently omit 
reporting their online purchases at tax time,
as with any small, ordinary transaction made using cash down at the corner 
store. I expect little of that would
change using Taler.


In particular, a Taler exchange could perhaps partner with a different
bank, or credit union, in each state to operate nationally.  This is
actually our preferred model for Europe.

yes.
> (2) Operate a Taler exchange and its merchants as components of one
> business, effectively turning Taler into a gift card or in-store
> credit.
interesting. Amazon cash.
> (3) Operate a Taler exchange that handles "not real money" with BitCoin
> being the obvious choice, but video game currencies work too.  Second
> life had quite a serious economy.  Eve has an economy that cares about
> privacy.  Anyone remember what Mt. Gox originally stood for?
yes
> (4) Find an easy way for American customers to use a Taler exchange in
> Europe.  If they're buying digital goods, hosting, etc., then they'll
> find plenty of suppliers based in Europe.
possibly maybe :)

Mostly, in this thread I wanted to air out some of the larger issues for 
new/early adopters in the USA. At some
point, as with all good ideas, Taler is going to have it's "day in the 
sun" with a concurrent flurry of bubbling public
interest coming from Americans. Maybe this will save the list from an 
"Eternal September" situation from a flood
of .yahoo and .gmail addresses coming from servers in the USA.