Virginia compliance issue leads FastCash4Bitcoins to suspend service

Tangible Cryptography says it is suspending  new purchases of bitcoins through its FastCash4Bitcoins service while it tries to resolve a compliance issue with the Commonwealth of Virginia.

Posts on both FastCash4Bitcoins and the Bitcoin Forum reported that a complaint had been filed alleging that Tangible Cryptography was operating as an unlicensed money transmitter. Following an initial investigation that determined the company’s activities might be considered “money transmission” under state law, the Virginia Corporation Commission asked for further information from Tangible Cryptography.

“The Commission’s initial assessment has factual errors which we intend to address,” Bitcoin Forum member Tangible Cryptography wrote. “The notice indicated that the determination is that our company is engaged in issuing Bitcoins through the use of the website https://fastcash4bitcoins.com, which may constitute ‘sale of issuance of stored value’ under Virginia law.”

Tangible Cryptography added, “As our clients are well aware this is simply an incorrect assessment of our business activity. The site is used to facilitate the purchase of Bitcoins from clients. Tangible Cryptography is acting as a buyers (sic) not issuer of virtual currency.”

The company has been given 30 days to explain in writing why it believes it is exempt from Virginia licensing requirements. During that time, it said it will suspend all new transactions.

“At this time there has been no freeze, hold, or closure of our payment accounts,” the forum post stated. “While we hope for a timely resolution we recommend our existing clients make alternative arrangements as it is difficult to provide an estimate on how long such a resolution may take.”

Other members of the Bitcoin Forum wrote they were sorry to hear of FastCash4Bitcoins’ suspension of services.

“If bitcoin is ‘stored value’ then the people who sold bitcoins to FC4B were all engaged in the business of money transmission, and the Virginia Corporation Commission should be investigating those thousands of people,” wrote forum member Bitco. “I’d love to see how they construe that as protecting residents of the Commonwealth.”