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Selling Bitcoin without ownership

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#1
Florida resident, but US question:

I've been told that selling Bitcoin without actually owning the asset is illegal in the US. This would be used as a type of escrow - where a client hands money to a broker, the broker then purchases the cryptocurrency on an Exchange, and then transmits the Bitcoin to the client's wallet after the transaction has confirmed. The broker would be registered with FinCEN, and a 100% legal MTB.

The point in question is whether the broker has illegally "sold" something the broker did not possess beforehand.

I can't find any caselaw regarding this, nor any type of US code or direction from the Treasury Department.

Comments? Suggestions? Ideas?

Thanks in advance.
 


#3
Florida resident, but US question:

I've been told that selling Bitcoin without actually owning the asset is illegal in the US.
There is no law that expressly states that selling Bitcoin (or cyptocurrency generally) without owning it is illegal. However, there are circumstances in which the sale of any asset without owning it is illegal. At the very least, it can amount to a fraud on the buyer. So the details of the transaction matter very much. You'd want to sit down with a lawyer familiar with laws on financial transactions and go over the details of what you plan to do to see if there would be any prohibition or regulation that would apply.
 
#5
However, there are circumstances in which the sale of any asset without owning it is illegal.
That's kind of what I was thinking; that as an asset it may border on a fraudulent sale.

If I sold a house I didn't own, it would be fraud - and illegal.
If I sold a service that hadn't yet been performed, it would be a retainer -and legal.
If I accepted money to find & deliver a '66 cherry red Mustang...? It would be in a sort of escrow...with untitled assets involved - yet legal.

I guess that's' why I'm here - to find out if there's any known precedent for the assertion I heard - and perhaps save someone from the Treasury agents rappelling out of Blackhawks over their house en masse on Christmas Eve...
 

quincy

Senior Member
#8
Thanks - but I went there first. I'm about ready to call bologna on the rumor I heard, but thought I should do some in-depth fact-checking before I unleash my wrath. :geek:
I know you visited the older thread first. I figured you checked out the links. The links were provided again in this thread for the benefit of others.

Coindesk updates their information with some frequency so it can be a good source for the laws in other countries.

Your edit to "bologna" is appreciated.
 
#9
Yeah, I've got quite a pottymouth. Some say it's my most endearing trait, others say it's my only endearing trait.

I'm covering the Bitcoin circuit this week, doing my good deed for that awesome merit badge they have... thanks for your time!
 
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