No, this isn’t some story about how Bitcoin was used to launder marijuana.
This is a story about something different. A story of US-based small business owners yearning to make something of themselves, yearning to do what their immigrant forbearers did and dream big and then realize those dreams.
For small business owners in Colorado and Washington, as bitcoiners look on with jealousy, these dreams might be an inch closer to coming true.
US law enforcement agencies are discussing steps they could take to allow legal marijuana businesses to have access to bank accounts, a Justice Department official said on Tuesday.
The Justice Department is currently reviewing the issue with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which has as a main goal the targeting of money-laundering.
“It’s important to deal with that kind of issue, and we’re at the present time talking with FinCEN, and they’re talking with and bringing in bank regulators to discuss ways that this could be dealt with in accordance with the laws that we have on the books today,” Cole said.
In August the Justice Department gave the states a bit of breathing room when it comes to legalized marijuana, despite it is still illegal under federal law. Therefore, due to anti-money-laundering rules, banks are prohibited from handling proceeds from marijuana sales.
That means, like Bitcoiners, marijuana shops have a difficult time getting banking services, like checking and savings accounts.
It is unknown when when U.S. agencies would complete their review nor what they will do.
Officials in Colorado and Washington have pushed the federal government to give banks and credit unions the confidence to take marijuana businesses as clients.
“Cash-only businesses are very difficult to audit, leading to possible tax evasion, wage theft and the diversion of resources we need to protect public safety,” Sheriff John Urquhart of Washington’s King County testified at the Senate hearing.
Supporters of marijuana legalization are prepared to take the matter of banking services for marijuana shops to Congress and amend federal law.
Bitcoin businesses, too, are being driven to cash, and for no reason. Startups across the country have sought to incorporate transparently, but have not been able to do so.
For those who have operated for a time succesfully, as the lovely Kashmir Hill for Forbe’s wrote recently, things haven’t exactly been a breeze:
Things are getting serious for Bitcoin this month: a federal judge declared it real money, Bloomberg gave it an experimental ticker (XBT), and New York’s financial regulator announced an interest in regulating it. Declaring Bitcoin “a virtual Wild West for narcotraffickers and other criminals,” the New York State Department of Financial Services is stepping into the sheriff’s boots.
Hill then details the subpoena which 22 digital-currency companies and investors received. Of interest were the money laundering controls, consumer protection practices, source of funding, pitch books (for Bitcoin startups) and investment strategies (for Bitcoin investors).
List of companies subpoenaed by the New York State Department of Financial Services
TrustCash Holdings Inc.
Bitcoin Opportunity Fund
Boost VC Bitcoin Fund
Lightspeed Venture Partners
Tribeca Venture Partners
Union Square Ventures
Winklevoss Capital Management
Bitcoin businesses, no doubt, have had trouble getting bank accounts. I will be shortly detailing Gold Silver Bitcoin’s experience with this, so stay tuned.
In a way, Bitcoin and marijuana have some things in common. Great misconceptions turn what are typically hobbyists into dangerous elements of society. Both suspected of being hotbeds of fraud and money-laundering, neither are actually a good solution to launder a lot of money. And, clearly, businesses operating around both spaces are having trouble finding banks.