The concept of a Bitcoin faucet is quite appealing, as it would provide people with a platform to distribute bitcoins and earn some money through advertising networks such as Google AdSense. However, some countries may look upon this type of activity as money transmission, just because people are giving away money to others without going through established financial institutions. Luckily, states like New York – where Bitcoin regulation is in full effect – should not require people to obtain specific licenses.
Also read: Instacoin Plans To Support Ethereum On All of Their Lamassu Bitcoin ATMs
Some people may chuckle at the idea of figuring out whether or not it is legitimate to run a Bitcoin faucet as a US citizen, but it is a very interesting question to ask out loud. Even though one can remain completely anonymous when operating a Bitcoin faucet, government officials can easily find out who you are as site owners will try to generate revenue. Especially when that process is done through Google Adsense.
Moreover, there is also the question of Bitcoin regulation in certain US states. In New York, for example, there is a regulatory framework which forces Bitcoin business owners to obtain specific licenses when conducting
money transmission acts. However, it appears running a Bitcoin faucet does not make one a money transmitter at this time, making it completely legal to operate this business without specific requirements.While the Reddit community has some more
colourful and interesting opinions on the matter, it is quite interesting to see this topic being raised. There is still a ton of support for Bitcoin in the New York area, but the BitLicense regulation has made digital currency enthusiasts warier than ever before. Not that there is anything wrong with that, as it is often better to err on the side of caution.Although Wikipedia mentions how a money transmitter is anyone or any company providing payment instruments to others. Bitcoin faucet operators do not fall into that category. One could make the argument a Bitcoin faucet owner provides people with a payment instrument in the form of Bitcoin, but regulation does not label digital currency that way [yet].
It is not impossible to think government officials might change their stance on Bitcoin faucets at some point in the future, but for now, nothing is preventing digital currency enthusiasts from running such a service. There is some good money to be made from owning a Bitcoin faucet, assuming one is willing to put in a lot of work and offer innovative ways to keep people coming back.
Source: Reddit
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