Topic: Jurisdiction for an exchange (Read 2426 times)
I would run to Monaco or Switzerland, a country that charge low taxes and less likely to pass anti-capitalist laws. It's clear that those who make money off real currencies (US & other merchants) will do anything they can to make sure that virtual currencies do not interfere with their gains.
europe has sepa, so a huge base of potential customers who can wire fast and cheap (from february 2014). but regulations are hard to meet. imho you would need to register as kind of a banking service, which demands i.e. some 100k-€ as business funds, as any businesses that hold fiat for customers (trading acount) are strictly regulated. regulations are harmonized across europe, so standards are pretty much the same, maybe some "new" members of the EU have less stricter regulations, such as rumania, croatia etc.
holding fiat from customers without appropriate license is a big no go in europe, that is one cause bitcoin24 has troubles, and why the other bitcoin exchange in germany doesnt provide an online market but acts just as a board of offline bids and asks.
see brokerage service provider and see which regulation they meet:
"§ 1 Abs. 1a Satz 2 Nr.1, 1a sowie 1c KWG (Anlagevermittlung, Anlageberatung sowie Platzierungsgeschäft) und Nr.2 (Abschlussvermittlung) zugelassen (BaFin Nr. 127518)";
http://www.flatex.de/impressum.html
http://www.europeanpaymentscouncil.eu/content.cfm?page=sepa_legal_and_regulatory_framework
http://ec.europa.eu/internal_market/payments/framework/
holding fiat from customers without appropriate license is a big no go in europe, that is one cause bitcoin24 has troubles, and why the other bitcoin exchange in germany doesnt provide an online market but acts just as a board of offline bids and asks.
see brokerage service provider and see which regulation they meet:
"§ 1 Abs. 1a Satz 2 Nr.1, 1a sowie 1c KWG (Anlagevermittlung, Anlageberatung sowie Platzierungsgeschäft) und Nr.2 (Abschlussvermittlung) zugelassen (BaFin Nr. 127518)";
http://www.flatex.de/impressum.html
http://www.europeanpaymentscouncil.eu/content.cfm?page=sepa_legal_and_regulatory_framework
http://ec.europa.eu/internal_market/payments/framework/
Bahamas, Caymans?
they have strong financial regulatory regime on paper, but for getting odd things (that might conflict with existing whims of the legislature) set up and going they have a pretty well structured kickback regime too that would be much cheaper than G8 countries
they have strong financial regulatory regime on paper, but for getting odd things (that might conflict with existing whims of the legislature) set up and going they have a pretty well structured kickback regime too that would be much cheaper than G8 countries
sealand is an urban myth, just a guy and a platform
Which is not any different than any other government leaders around the world. They aren't actually special either, and are not ontologically different from you and me. Just a guy, and a bunch of weapons to make his word "law."
hmmm. it takes some more elements to constitute a state/country. sealand is not a state/country. british police has force over sealand, whereas british police has no force over ie chile. if i am remembering right, sealand was in a bankrupcy proceeding, so no talking of a state for sealand - it´s a marketing gag of a guy owning a plattform. btw think of falkland islands - would you risk fighting the british empire stating "huhu, you cant invade, i am a state"
Until 1987, it was a nation
Germany does nto really acknowledge that. The problem is here that we are talking the 12 mile radius.
And yeah, Teh british navy invading sealand?
I suggest a new server system: A server system using encrypted data that is decntralisied over servers all over the world, which are then decrypted through a DNS System. Basically, Namecoin with decentralized storage.
sealand is an urban myth, just a guy and a platform
Which is not any different than any other government leaders around the world. They aren't actually special either, and are not ontologically different from you and me. Just a guy, and a bunch of weapons to make his word "law."
hmmm. it takes some more elements to constitute a state/country. sealand is not a state/country. british police has force over sealand, whereas british police has no force over ie chile. if i am remembering right, sealand was in a bankrupcy proceeding, so no talking of a state for sealand - it´s a marketing gag of a guy owning a plattform. btw think of falkland islands - would you risk fighting the british empire stating "huhu, you cant invade, i am a state"
I'm going to second Iceland. Here's why: they have a reputation for jailing the bankers for the economic crisis. Thus, if any country is likely to be favorable to an alternate currency, it's Iceland. They may even go to bat for you if the US authorities, though obviously, no guarantees of that.
I'm not so worried about taxes, rather about confiscation and more. Risks are potentially similar to running a Piratebay in the long term. Hausdorff is in serious trouble for running B24 in Germany. So not only does he have the Bitcoin mob after him (if the laws don't apply people get nasty quickly), the bank accounts were frozen in an instant, and he is charged with money laundering, financial terrorism, etc.
Singapore is one of the most strict regimes. If you look at organizations which are not liked, most countries obey to the US pretty quickly. Megaupload had some special forces come in, on behalf of Hollywood. So I think you need some serious cash for lawyers, and then a very smart strategy. A EU country is definitely not a good option.
Singapore is one of the most strict regimes. If you look at organizations which are not liked, most countries obey to the US pretty quickly. Megaupload had some special forces come in, on behalf of Hollywood. So I think you need some serious cash for lawyers, and then a very smart strategy. A EU country is definitely not a good option.
I was thinking that Singapore, while strict, might be one of those countries able to quickly respond with clear regulation for Bitcoin exchanges and trading while being legit enough to not be seen as a money-laundering haven within the international community.
If clear regulation is offered by any respectable country there is nothing stopping a bank from partnering with someone to open an exchange and help the exchange comply with the regulations.
The issue at the moment is that no country has issued any clear regulations at all. That's why banks are afraid, because they might be doing something illegal if they get mixed up with Bitcoin as there are no clear regulations in place.
Thanks for the input, but (1) that's market place such as BTCde. Which sucks. You want to handle volume, and that's not the way to go. I want to transact without having to judge the counterparty every time. (2). I don't quite get that. You still have bank transactions.
I'm very much wondering why no one is setting up this properly.
The Bitcoin law? It is unlikely that Bitcoin is even lawful if viewed in this way. If somebody accepts Bitcoin he does not know where the money is coming from!?
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But no, everyone sets up a BIG HONKING "MONEY EXCHANGE".
I'm very much wondering why no one is setting up this properly.
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The second is following AML law. Securing and identifying your customers is not optional. If you want to be a professional company, you need to follow the law.
The Bitcoin law? It is unlikely that Bitcoin is even lawful if viewed in this way. If somebody accepts Bitcoin he does not know where the money is coming from!?
Risks are potentially similar to running a Piratebay in the long term.
Think outside the box, Pirate Bay is a good example of decentralization.
(1) An exchange does not have to centralize or deal with Fiat = just be
an Order Book and Account System. Doesn't even need a bank account.
Have your Clients owe each other money and settle their debts to continue
trading. A private citizen sending money to another private citizen is under
the radar.
(2) Gambling sites are ubiquitous. An interesting gambling site with 97%
payout that just happens to accept BTC is a backdoor exchange.
But no, everyone sets up a BIG HONKING "MONEY EXCHANGE".
I'm not so worried about taxes, rather about confiscation and more. Risks are potentially similar to running a Piratebay in the long term. Hausdorff is in serious trouble for running B24 in Germany. So not only does he have the Bitcoin mob after him (if the laws don't apply people get nasty quickly), the bank accounts were frozen in an instant, and he is charged with money laundering, financial terrorism, etc.
Singapore is one of the most strict regimes. If you look at organizations which are not liked, most countries obey to the US pretty quickly. Megaupload had some special forces come in, on behalf of Hollywood. So I think you need some serious cash for lawyers, and then a very smart strategy. A EU country is definitely not a good option.
Singapore is one of the most strict regimes. If you look at organizations which are not liked, most countries obey to the US pretty quickly. Megaupload had some special forces come in, on behalf of Hollywood. So I think you need some serious cash for lawyers, and then a very smart strategy. A EU country is definitely not a good option.
Germany is a problem, considering that these are financial instruments with our law. It might be possible he needs a brokerage license to open the exchange and follow procedures after the german "Geldwäschegesetz" which is money laundering law. So it is technically absolutely legal to deal with this, however he did a few mistakes.
If he didn't follow the common ground rules, he is pretty fucked.
The first ground rule is not to withdraw company money in person. You wire it to yourself, to another account, that is designated personal. You keep money that is customer money ALWAYS in separate accounts and never withdraw cash from them (Red flag for banks).
The second is following AML law. Securing and identifying your customers is not optional. If you want to be a professional company, you need to follow the law.
As for megaupload: See what Schmitz did afterwards. I can't stand him, true. But he made the PRIME MINISTER of New Zealand apologize to him, he sued the FBI and got a court to show he actually cooperated and he is right now setting up new fibre cables for all of New Zealand just because he needs it for his service. THIS is how you deal with situations like these. But you need the money, that is true.
I'm not so worried about taxes, rather about confiscation and more. Risks are potentially similar to running a Piratebay in the long term. Hausdorff is in serious trouble for running B24 in Germany. So not only does he have the Bitcoin mob after him (if the laws don't apply people get nasty quickly), the bank accounts were frozen in an instant, and he is charged with money laundering, financial terrorism, etc.
Singapore is one of the most strict regimes. If you look at organizations which are not liked, most countries obey to the US pretty quickly. Megaupload had some special forces come in, on behalf of Hollywood. So I think you need some serious cash for lawyers, and then a very smart strategy. A EU country is definitely not a good option.
Singapore is one of the most strict regimes. If you look at organizations which are not liked, most countries obey to the US pretty quickly. Megaupload had some special forces come in, on behalf of Hollywood. So I think you need some serious cash for lawyers, and then a very smart strategy. A EU country is definitely not a good option.
What about Malta ?
Malta is a great place. It is quite easy to run a business there, however exchanging money for assets like BTC won't be easy there. Tons of regulations and hoops to run through. But GREAT tax schemes.
It depends on who you want to be able to move funds in and out of the exchange. If you choose a country which is on the FATF blacklist, then banks in other FATF member countries often refuse to deal with banks in those nations and any transactions to and from those nations are automatically reportable to financial intelligence services in your own country.
The problem isn't so much one of finding a way to trade your Bitcoins offshore. It's one of being able to repatriate those funds so you can spend them. You shouldn't be using any exchange as a bank/online wallet in the first place, so you always need somewhere to transfer your BTC/USD when you've finished trading.
The problem isn't so much one of finding a way to trade your Bitcoins offshore. It's one of being able to repatriate those funds so you can spend them. You shouldn't be using any exchange as a bank/online wallet in the first place, so you always need somewhere to transfer your BTC/USD when you've finished trading.
Great point.
Of the countries already mentioned Belize and Singapore look like good options. But I would add Hong Kong and Japan (they haven't done anything about Mt. Gox yet).
Personally I think Singapore is the best option as they are business friendly, wealth friendly, a financial trading centre and are a small hierarchical country that can adapt regulation quickly if needed.
It depends on who you want to be able to move funds in and out of the exchange. If you choose a country which is on the FATF blacklist, then banks in other FATF member countries often refuse to deal with banks in those nations and any transactions to and from those nations are automatically reportable to financial intelligence services in your own country.
The problem isn't so much one of finding a way to trade your Bitcoins offshore. It's one of being able to repatriate those funds so you can spend them. You shouldn't be using any exchange as a bank/online wallet in the first place, so you always need somewhere to transfer your BTC/USD when you've finished trading.
The problem isn't so much one of finding a way to trade your Bitcoins offshore. It's one of being able to repatriate those funds so you can spend them. You shouldn't be using any exchange as a bank/online wallet in the first place, so you always need somewhere to transfer your BTC/USD when you've finished trading.
Belize
Singapore
Indonesia
I'd stay away from Panama(used to be great), New Zealand and any European countries. To many laws like the USA, plus the US government has slowly been working their way into some of these countries with shared information and laws.
Singapore
Indonesia
I'd stay away from Panama(used to be great), New Zealand and any European countries. To many laws like the USA, plus the US government has slowly been working their way into some of these countries with shared information and laws.
sealand is an urban myth, just a guy and a platform
Which is not any different than any other government leaders around the world. They aren't actually special either, and are not ontologically different from you and me. Just a guy, and a bunch of weapons to make his word "law."
yeah, but as far as i know that sealand guy did follow the british insolvency proceedings when his "sealand" was off funds..
You want to look at "gambling friendly" jurisdictions...
Research where major poker and casino sites are located.
It's often a trade off between:
(a) dealing with a reasonable level of AML regulations.
(b) being at the mercy of a corrupt Third World Govt.
that is good advice, plus governments such countries easy in producing new regulations and can make BTC exchange business legalized or approved in some way.
Aruba and Isle of Man are some places to consider.
sealand is an urban myth, just a guy and a platform
Which is not any different than any other government leaders around the world. They aren't actually special either, and are not ontologically different from you and me. Just a guy, and a bunch of weapons to make his word "law."
sealand is an urban myth, just a guy and a platform
Amazingly enough, apparently there was an announcement in February 2013 that HavenCo will be offering services again:
http://en.wikipedia.org/wiki/HavenCo#Return
I didn't know this until just now.
Cool if true; I'll believe it when I see it.
Sealand also claimed they were preparing to operate an online casino, to be ready in late 2012: http://en.wikipedia.org/wiki/Principality_of_Sealand
You want to look at "gambling friendly" jurisdictions...
Research where major poker and casino sites are located.
It's often a trade off between:
(a) dealing with a reasonable level of AML regulations.
(b) being at the mercy of a corrupt Third World Govt.
Sealand?
I think not, see HavenCo. 
On a boat in the middle of the ocean.
Belize is the best for this sort of thing actually. Next choice would be Panama. Finally New Zealand.
Many, many countries really don't care what you do as long as you pay taxes and don't do whatever it is you're doing to their people.
Many, many countries really don't care what you do as long as you pay taxes and don't do whatever it is you're doing to their people.
Sealand?
What about Malta ?
Luxembourg? Antigua?
Iceland, Channel Islands, Gibraltar, Singapore...
Traditionally offshore places are also Cayman, Channel Islands, Macau, Switzerland. But if you operate there, users will rightfully not have so much trust. But what i mean is in terms of banking-infrastructure. I highly doubt Somalia and North Korea are good places. High-inflation countries could be very interesting, such as Argentina.
Traditionally offshore places are also Cayman, Channel Islands, Macau, Switzerland. But if you operate there, users will rightfully not have so much trust. But what i mean is in terms of banking-infrastructure. I highly doubt Somalia and North Korea are good places. High-inflation countries could be very interesting, such as Argentina.
Switzerland
Sweden
Somalia
North Korea
Sweden
Somalia
North Korea
What are potentially good places to run an exchange? If country A would ban Bitcoin and banks refuse to deal with BTC, but country B allows it, flows of money from A to B could circumvent the ban.
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