Transparency Disclosure: I wrote this article for the @originalworks writing contest for SmartOne Legal (LGL) (599 words)
A Case Study of the Necessity for SmartOne Legal
Randall Lord is a U.S. citizen who attempted to provide a service to people by buying and selling bitcoin beginning in 2013. He made every attempt to conform to existing laws, including consulting an attorney.
Due to his purchasing volume, the cryptocurrency exchange he was purchasing from informed him that he needed to register his business with FinCEN (Financial Crimes Enforcement Network, U.S. Department of the Treasury), and also get state licensing as a Money Service Business if his state required it. To comply with the notice he received from his cryptocurrency exchange Randall did register with FinCEN , and he did receive a FinCEN registration number.
Because Bitcoin was not considered a currency under Louisiana state law he was not required to register by his state as a Money Service Business. What Randall Lord was doing by buying and selling Bitcoin was completely legal and did not require a license by the State of Louisiana. Bitcoin is not issued by a state or government of any type, and so it fails to meet the definition of a currency according to Louisiana state statute.
He was indicted by the Federal government in 2015, and at the advice of his attorney he entered a guilty plea of operating an unlicensed money service business because he did not have an operating license from the state of Louisiana.
But Louisiana did not require him to have a license.
And he was making every attempt to operate a legal business.
And he had hired legal counsel.
It just didn’t seem right to him, so he contacted the Office of Financial Institutions in Baton Rouge, Louisiana, the regulating agency for money service businesses in Louisiana, and explained what his business did, and asked them whether he needed a license to operate such a business in Louisiana. They confirmed that he was correct, and did not need a license because Bitcoin did not meet the legal requirements needed to qualify it as a currency. In Louisiana, Bitcoin is not regulated as a currency.
Randall Lord and his attorney attempted to withdraw his guilty plea, and after waiting quite a long time for an answer his withdraw was denied because it would be an inconvenience to the court to have to go to trial.
His judge appeared to be using his case to set an example and scare honest people out of using cryptocurrency, and gave him the harshest sentence possible. Randall Lord is now serving time in a Federal Penitentiary.
His crimes included no victims. All of his cryptocurrency customers were satisfied with his services. He did not defraud or steal from anyone, and did not participate in any illegal activities during his buying and selling of the Bitcoin.
Randall Lord may have saved himself a great deal of trouble if he had consulted the SmartOne team of legal professionals who are well versed in cryptocurrency laws and contracts BEFORE he started his business. His is the perfect example of what governments can do to any individual who wants to try to make a living with cryptocurrencies.
Having the backing of a team of legal experts at your disposal makes you less likely to be the target of a judicial or government agency that is looking for the weak and unprepared target during this suspicious and uncertain period of cryptocurrency development and adoption.
The wise person is the one who takes precautions early on, and invests in the groundwork of their business model by defining the scope and function of their business in legal terms, consulting SmartOne experts on the legality of their business plan.
Sources:
4/20/16 Press Release
Randall Lord Interview - YouTube
Disclaimer: This article is for informational and educational purposes only, and is not to be considered legal advice, investment advice or a solicitation to sell any product or services.
@originalworks writing contest
smartone2017
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STOPthat's a really good story and although you have thrown smartone a curveball, it's a perfect (if historical) example of how the legal uncertainties and contradictions that exist in the crypto-sphere require such an organisation. If you don't place and I do, I will make a (token) contribution, pardon the pun for your excellent attempt at this contest. 10/10 for entertainment !
Thanks, @outerground! I feel that is a gem of a compliment coming from someone like you. You have made my day! Cheers!
pleasure's all mine, you certainly have a way with the written word ! I like to encourage people with a flair for something because that's how talent flourishes.. it's noticed, it's remarked upon. the talent blossoms, and so on.. until you wake up one day and you can't quite believe the transformation that has occurred ;)
Thanks, @outerground! What you say is very true! I'm slowly finding my own groove here on Steemit. Based on some articles I read today I have started my own curation trail. Now that I think I am better understanding how upvoting and voting power works on Steemit I feel like I can actually move forward with a plan to get the most out of my effort and time on the platform. I really enjoy getting to know people, interacting and encouraging them. Now I think I will be able to do that better! Learning and growing every day! Cheers!
it's really complicate isn't it. ! it's not instagram.. but I think part of steemit's charm is the fact that people who stick it out have a certain character and that's probably what makes it so interesting as a community. I'm sure as time goes by, we'll be veterans by the time it hits the mainstream. part of me hopes that it kind of won't be like facebook. It still feels like you can own a part of Steemit, until the galloping hordes roll in and dilute the vibes... and the reward pool ! until then, we can make the best of it !
I love to solve a good puzzle, and that's what the Steemit newbie life feels like. It's probably part of what is motivating me to spend more time here trying to figure it out. Although Steemit will probably always have an edge that looks like Facebook, I don't think that Steemit will loose the great aspects that make it unique, and such a fun place to engage and interact because it has a different foundation, and enough people invested in ownership of the community to keep it a great place to be. (what a terrible run-on sentence, but that's what I get when I am on my phone sometimes. My apologies.) Cheers, @outerground!
Hello & Cheers!! I'm a content detection and information bot. You are receiving this reply because a short link or links have been detected in your post/comment. The purpose of this message is to inform your readers and yourself about the use of and dangers of short links.
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[steemit](https://steemit.com)Unlike short links this allows the reader to see where they are going by simply hovering over the link before they click on it.Thanks, @beerbot. I didn't know this. I will edit my article, and fix this. Cheers!
I have edited the link, and removed the tiny url .
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Hey! I found you in the contest comments :) Is this a true story?
Yes, @arbitrarykitten, it is a true story. You can check the two source links I provided at the end for verification. I encourage it because it will expose the government spin versus the testimony of the victim himself.
Error ! sorry.
ps you have now piqued my interest with your fluid style and I am following you :)
I'm honored, @outerground. Thanks!