Erik Voorhees Explains Why Some Bitcoin Companies are Blocking American Users

Although Americans generally believe that they live in the home of free markets, the United States’ role as a leader of economic freedom has been declining for decades. The United States ranked 12th on the latest version of the Heritage Foundation’s economic freedom index and is now relegated to the designation of ‘mostly free.’ The myth of unbridled economic freedom in America is being exposed by Bitcoin, as revealed by the choice by several Bitcoin comapanies to bar American customers. The result is that US residents are being denied financial opportunities available elsewhere. Two examples are Xapo (a debit card funded by Bitcoin) and Coinapult (a wallet provider whose Locks service eliminates price volatility). So what exactly is keeping these companies out of the United States?
The Specific Issues with Offering Services to Americans
I recently asked Erik Voorhees about the specific laws and regulations that force foreign companies to avoid American customers. As an early Bitcoin adopter and one who has been fined roughly $50,000 by the US Securities and Exchange Commission for victimless transgressions, Erik hold a unique perspective on the regulatory environment for the Bitcoin industry in the United States. Erik stepped down from his position as CEO at Coinapult in January, although he is still a co-owner. Voorhees was quick to point out why the ‘antagonistic’ rules associated with becoming a money service business (MSB) and money transmitter business (MTB) cause the most problematic aspects of offering financial services to Americans. He noted, ‘Compliance with MSB statutes isn’t terribly onerous; however, it does require a business to generally invade privacy, spy on its users, and act as a law enforcement agent of the US government.’

This post was published at Lets Talk Bitcoin on October 14th, 2014.