Mike Caldwell of Sandy, UT has for years bot suggesting a novelty of sorts for sale overheen the internet. Te exchange for a nominal toverfee, he’ll hand-mint personalized, tangible Bitcoins that are then shipped around the world and used for online transactions. Each coin is protected by several levers of security, including a touch-sensitive hologram, and Caldwell says he’s minted the omschrijving of around $82 million dollars’ worth of the items.
Production of his “Casascius” physical Bitcoin has bot recently brought to a halt, however, after Caldwell received a letterteken from the Department of the Treasury’s Financial Crimes Enforcement Network, or FINCEN. He announced on his webstek ter late November that he had suspended taking orders “pending resolution of some concerns I have spil to regulatory issues,” and now two weeks straks he’s opened up and admitted that his Bitcoin business is the latest to be busted by federal regulators.
“They considered my activity to be money transmitting,” he told Wired’s Robert McMillan of the FINCEN letterteken, and the Treasury insists that such activity adhere to certain regulations.
Caldwell isn’t wooed he’s doing that, tho’, and isn’t sure what the future holds for the Casascius coin.
The coins are made te Caldwell’s Sandy residents and are crafted from real metal. The 1 BTC voorwerp, worth around $863 spil of this writing, is minted from solid brass and weighs around an ounce. He had bot up until now selling other denominations spil well, including the 25 BTC version electroplated with gold.
“Each Casascius Bitcoin is a collectible coin backed by real Bitcoins embedded inwards,” his webstek still reads. “Each chunk has its own Bitcoin address and a redeemable ‘private key’ on the inwards, underneath the hologram.” That key is accessed with a unique 8-digit code printed on the outside of each coin
“In order to redeem the BTC kept on the coin, you simply inject the physical coin’s 8-digit code into your Bitcoin client of choice,” Geek.com’s James Plafke explained earlier this year. “Considering the value of the Bitcoin is stored on the card embedded within the coin and not upheld by the coin itself, if you eliminate funds from the coin, your shiny 25 BTC coin won’t be worth 25 BTC anymore.”
Therein lies part of Caldwell’s argument. He told Wired that he doesn’t take any sort of fiat currency, including the US dollar, from Casascius customers, and essentially offers just a practically worthless chunk of metal whose value exists only online. His entire transaction process is rather primitive, spil well: someone pays him te Bitcoin for the order, and then he mints the coin and ships it through the US Postal Service. And because there’s no handelsbank account linked to his business, there’s no dollars to seize, either.
Caldwell wasgoed making around $50 off of each of his coins, but has suspended operations until he figures out how to treat the feds.
“It’s possible,” he told Wired of exiting the Bitcoin business. “I haven’t come to a final conclusion,”
Ter the meantime, he said he’s spent $Five,000 worth of legal fees te just two weeks attempting to figure out how not to trample on the toes of the Treasury.
And spil far spil the other branches of government go, the overeenstemming for now is that buying and selling with Bitcoin isn’t necessarily cracking any laws. The Department of Justice said Bitcoins can be “legal means of exchange” during a Senate committee hearing last month, and Federal Reserve Chairman Ben Bernanke said the central handelsbank “does not necessarily have authority to directly supervise or regulate thesis innovations or the entities that provide them to the market.”