Elon Musk has taken aim at Bitcoin’s Lightning Network, echoing Bitcoin Cash supporters
Continuing the column following Elon Musk activity on Twitter and his influence, today we have another tweet that is full of support for Bitcoin Cash and somewhat aimed at Bitcoin’s Lightning Network.
Elon Musk echoes Bitcoin Cash supporters with the latest tweet
Recently, BlueWallet posted information, about the new Lightning implementation. Which is powered by Lightning Dev Kit (LDK), a flexible Lightning implementation written in Rust.
Any money transmitter or other licenses needed to use this in USA?
— Elon Musk (@elonmusk) July 13, 2021
This is clearly an update on new features, but Musk decided to turn it into another debate. Musk is asking whether BlueWallet’s Lightning implementation requires “a money transmitter or other licenses” in order to operate in the U.S.
Musk’s seemingly simple question turned out to be a spark that ignited another debate. Because, in the past, Bitcoin Cash advocates argued that Lightning nodes do not qualify as Money Service Businesses under FinCEN’s regulations. Hence, critics argue that such transactions could be ultimately illegal.
In 2019, the U.S. regulatory agency issued new guidance that addresses whether certain cryptocurrency-related businesses need to be regulated as money services businesses (MSB) and comply with the Bank Secrecy Act (BSA) and other relevant laws in the country.
When released, FinCEN’s guidance will also make it even more challenging for the Lightning Network on Bitcoin Core to grow. Because Lightning Network nodes are likely to fall within FinCEN’s broad interpretation of money transmitters, means they would be required to register as MSBs and comply with AML regulations.
And apparently, Musk’s question touches on this. However, according to Peter Van Valkenburgh, research director of nonprofit advocacy organization CoinCenter, a Lightning message is not a payment order. Furthermore, a Lightning node cannot steal a users’ money, there is no need for licensing.
Fortunately, the story didn’t go any further. Some users have reminded Musk that he is an influence in space. Therefore, his words carry a lot of weight. Therefore, Musk should be more careful in his statements, especially on social networks.
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