The gist I got from it is that the US government is aware of bitcoin, has some casual ruleset surrounding it and will not (for now) take action against anyone using it, or if they do, it'll only be the exchanges, not individuals. Looks like Bitcoin is safer than a Cyprian bank.
It would be safer than a Cyprian bank if BTC prices were as stable as the Euros. For all the criticisms it received, the EUR is more stable than most of the currencies it replaced, and it did not see a single crash in prices as bad as BTC has seen several times. So really, you shouldn't worry about the possibility of the government taking 7% of your money if the alternative is a virtual currency that seen losses of more than 75% in a single day.
Except for the fact that we don't yet know the full extent of the Cypriot haircut, but it looks that some will be paying way more than 7%. Closer to 15% for some [1]. They've now extended the "bank holiday" to "Thursday" [2]. And at least BTC is convertible in a crisis without a central authority. If you can't get your money from the bank at all (which is the case with Bank Holidays) then it's not much good to you.
In a systemic financial collapse, between having BTC on my local computer [3] and having numbers on a computer in a failed financial institution, I know which one I'd rather have. You may feel differently, and that's fine.
And it also appears users converting BTC to USD (etc) need to be MSBs. As a (non-MSB) miner, one can use their BTC to buy anything but dollars... What a strange regulatory limbo to be trapped in...
Can drive a big rig through that loophole though, if it's that simple. i.e. convert to Euros and convert that to dollars elsewhere - or buy something of value and then sell it on ebay etc etc.
The grey 'n baldy club at the Fed decided to shake their cane at Bitcoin and inadvertently made all the online gaming companies (EA, Valve, Ubisoft, Zynga) crap their pants in unison.
It only applies to gaming currencies if they can be readily converted back to dollars. For example, this doesn't affect the 'tokens' you buy to play skeeball at Chuck-E-Cheese's because you don't exchange those back to dollars.
Anyone acting as a BTC broker dealer, exchange, wallet, mining pool, speculator or miner that sells BTC has been put on notice that they're required to comply with a bunch of regulations including licensing, transaction reporting and suitable checks to ensure your counterparties aren't terrorists or people laundering money.
The way I understand it, you are required to comply with OFAC and other Treasury programs in any transaction you make.
Some transactions aren't that risky, because people with bigger pockets have validated it already (generally between US bank accounts). But once you get outside that (like, international, or bitcoin) the requirements to prove that you're paying attention get Hard.
If you're HSBC, that's not a problem. But for everyone else...
In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.
You can speculate in real currencies without adhering to any special regulations, so there is no reason to think they would try to twist the word 'exchange' here to mean that.
As I said, you can buy real currency as a speculator and you aren't required to follow any regulations. Forcing speculators in digital currencies to meet the same requirements as financial institutions would be absurd.
I realize one could make a case that that is what they mean here but common sense dictates that was not the intent, and it is extremely unlikely speculators have anything to be concerned about.
