Virtual Currency Legal Analyst: Linden Lab Has to Comply With New US Treasury Guidelines or Face Criminal Penalties
Virtual currency legal analyst Alex Kadochnikov adds more context to Linden Lab's apparent move to comply with new US Treasury guidelines by forbidding the trading of Linden dollars (L$) on exchanges other than the official LindeX. As part of the guidelines, the company must register as a Money Services Business, and the penalties for not doing so are pretty steep:
Any company that issues or exchanges virtual currency must register with FinCEN, either by themselves or through their agent. Linden Lab will have to register. Linden Lab issues virtual currency. No surprises there... Once the statutory six month period for when virtual currency money transmitters must register, the government will be able to start prosecuting people who do not comply.
Here come the penalties, stated right in the regulations:
Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.
So yeah, it would make sense Linden Lab wants to be absolutely tight with its Linden Dollars. Though it's still strange the company hasn't specified this is the reason for its policy change.
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