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Comment by citricsquid | Hacker News Reader

This is incorrect. The CEO of PayPal David Marcus has already denied these claims:

    To clarify: we have no policies against using PayPal to sell Bitcoin mining rigs. 
    We don't support any currency txn whether fiat or BTC for a host of regulatory 
    issues. But we treat BTC and any FX txn the same way. We're believers in 
    BTC though.

There was a communication error in January but it was retracted within hours: http://i.imgur.com/GMC0fsd.png

https://twitter.com/davidmarcus/status/422632561882316800

https://twitter.com/davidmarcus/status/422632849670299648

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Paypal is banning any account which deals in currency exchange. They are still allowing hardware such as Bitcoin mining devices. The gray area are Casascius Coins which they are banning because it involves currency exchange even though it is sold with a physical item.

By the way, my post title was changed by someone else. Paypal is NOT banning anything Bitcoin related, they are only banning Bitcoin exchanges for fiat currencies.

> By the way, my post title was changed by someone else

Sadly, this is a well-known issue on HN:

https://news.ycombinator.com/item?id=6216685

Although that open letter received a lot of attention, nothing has changed since then: No transparency which admin "corrected" the title, not even an indication that this kind of manipulation happened at all. So you as the submitter receive all complaints about the crappy title.

@pg: Note that I fully understand that we HN submitters should not be encouraged to use link-baity names for our submissions. And that we should prefer the original title wherever feasible. But some articles' titles are crap. Some are uninformative, some are misleading, and some titles are even wrong. If it is recommened to remove link-baity numbers from titles ("10 Ways To Do X" -> "How To Do X"), why isn't it equally feasible to replace misleading/wrong titles with informative/correct titles?

The justification for the current behavior is that the mods don't have the time to read the articles and verify whether a custom title is better than the original.

I suggested via email that they could let veteran users flag inappropriate (link-baity/editorialized/inaccurate) titles and have moderators change them in that case, but I never received any answer.

I assure you, he has no idea what his underlings are doing.

They most certainly kill things dealing with crypto-currencies.

The questions is it overly-sensitive anti-fraud, or overly-sensitive anti-competition.

He's not denying that they don't allow trading of any currencies, including BTC. What he says they allow is selling BTC-related products (such as mining machines).

>This is incorrect. The CEO of PayPal David Marcus has already denied these claims

It might very well be incorrect, but "the CEO denied these claims" is very low proof in my book.

Is the Bitcointalk poster lying, then? One of these two stories can't be true, and the poster has no reason to lie... (Not that people on the internet need one.)

I doubt they're lying, what they are doing is mislabelling their experience as representative. Low level PayPal employees have previously made mistakes that has resulted in people who are selling mining equipment finding their accounts suspended, however these are misinterpretations of the rules by the lowest level of PayPal employees. The David Marcus statement was in response to a story (almost identical to the story of the bitcointalk poster) from a couple of weeks ago.

http://www.reddit.com/r/Bitcoin/comments/1v12p4/well_done_pa...

http://www.reddit.com/r/Bitcoin/comments/1v3qhw/update_well_...

Neither the bitcointalk poster nor Paypal's CEO were lying, although the poster's conclusion is now proven to be incorrect.

The OP was selling casascius coins, which contain bitcoin private keys (digital currency) and are therefore against the terms of service. The CS rep the OP talked to incorrectly communicated that ALL bitcoin related items were banned. Later Paypal and their CEO issued a statement clarifying that only digital currencies themselves were banned.

You really think somebody would do that? Go on the Internet and tell lies?

Seriously, it's an anonymous Internet forum. Anything without proof should be assumed as false.

I guess David Marcus didn't (nor anyone else at Paypal) read the FinCEN regs because Bitcoin exchange is not considered "currency exchange" for regulatory purposes because FinCEN says it's not a "currency."

Sigh.

They likely did, you clearly did not: "... 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"[emphasis mine]

from http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001....

That particular section may or may not cover Paypal, but certainly you don't get out of the money transmitting rules by not dealing with "money."

I didn't say you get out of money transmitter rules. Just that Paypal's "currency exchange" reading and analogy is wrong - see: "...a person who accepts real currency in exchange for virtual currency, or vice versa, is not a dealer in foreign exchange under FinCEN's regulations."

You're still not getting it. Paypal isn't subject to the foreign currency rules of the FinCEN regulations because virtual currencies aren't foreign currencies. Paypal is still subject to the other rules that apply to money transmitters.

Ha, come on! That's what I said, we agree! David Marcus is the one saying that it's like Foreign Exchange, which is weird because we both agree it's not under FinCEN rules.

I never said that Paypal isn't a money transmitter, nor that there are not any other FinCEN rules both PayPal and others have to follow.

Sigh.

As the other responder pointed out, Paypal would be a money transmitter under FinCEN regulations. What FinCen was saying is that Bitcoin and other digital currencies aren't "currencies" in the legal sense because they have no government backing. However, they are "virtual currencies" in the sense that they otherwise function and behave as true currencies. Consequently, the FinCEN regulations apply to Bitcoin and other digital currencies.

FinCEN further stated that miners and persons who are using Bitcoin in non-currency transactions(i.e., paying for services, physical goods, or non-digital-currency intangible goods) are not subject to the FinCEN regulations because they aren't exchanging one currency for another, directly or indirectly, and they aren't functioning as commercial money transmitters.

So are all those posters on bitcoin trying to scam David Marcus? Supposing they are, what would be their motivation to do so?

To deface paypal? Seems unlikely

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