Topic: Localbitcoins.com trading legality (Read 1192 times)

Know Your Customer (KYC) is key here.

Research your local (state) laws first, money transmitters are regulated so look into that license requiremen!

Educate yourself and talk to a lawyer, you need to protect yourself at all cost first!
http://www.coindesk.com/bitcoin-law-money-transmission-state-level-us/

You absolutely do not want to be taking advice on how to run your business legally from a bunch of random people on an internet forum. You are going to be much better off consulting with a local attorney who is familiar with the local, state and federal laws of your jurisdiction.

It is my understanding that the laws/rules regarding being a money transmitter (if that is in fact what you would be under the eyes of the law) are very complex, and anyone other then an expert in the field is almost certainly going to give you some kind of misinformation.

Yep, what he said is how the sting operations work: undercover cops will buy btc, and casually mention that they plan to buy drugs, a whore, aor anything else illegal.  You might naturally shrug it off and say that it is none of your damn business what they spend the money/btc on.  But as soon as they tall you, BAM you are now a party to criminal behavior.  To avoid this, if anyone even HINTS at illegal activity during a trade, jsut walk away from the trade.  You can politely say "sorry, but I can't trade with you now that you have told me that," or something similar.  But watch your ass, they are trying real hard to put btc on ice.

Would like to suggest reading up this http://bitcoin.stackexchange.com/questions/12559/legal-issues-banking-issues-selling-bitcoins-to-people-otc
for the legality issues of selling or trading bitcoin.

I think it is always better to avoid cash transaction, if you want to be legally safe. Make bank transfer and you'll have the cash trail. Authorities around the world dont like the anonymity that cash brings in.

Yep, get a money transfer license.  And previous posters are correct about the asset forfeiture laws, which are becoming more strict now where I am thanks to the loose canons siezing grandma's savings account because a nephew just happened to spend a few days there.  The nephew was a target in a sting op.  The burden of proof for criminal convictions is beyond a reasonable doubt; pretty high standard nonetheless.  Not so for asset forfeiture, which is beyond a preponderance of the evidence.  What this means is that there is a 51/49 standard in that if the majority sways to more than 50%, you lose, regardless if there were even criminal charges filed or not.  Yes, I'll repeat that: there do not have to be any criminal proceedings to implement an asset forfeiture of your property if the preponderance of the evidence (more than 50%) can persuade a civil judge that the property was acquired in a manner in violation of particular laws (not all qualify) or the property was proceeds from qualifying unlawful transactions.  This is all separate from any criminal proceedings and it's simply easy as hell to do.

Get that license and keep records of transactions.  Also do not deal with anyone that readily admits participation, past, present, or future in any criminal activity EVER.  (You go to the bank with 2K in your pocket and make a deposit.  In talking with the clerk you tell her it is the proceeds from your underground liquor store.  I promise you they have a duty to report that information and you as a money transferee will encumber those same responsibilities.)

My 2 cents!

I would start by reading the thread on BurtW (below), and carefully review the rules around running a 'money transfer business.' I'm assuming you are in the US ... if you are not, then it would be much easier I believe.

https://bitcointalksearch.org/topic/the-curious-case-of-burts-bitcoinand-how-it-may-apply-to-you-983611

Anyway, if you are in the US, you should avoid, or be very circumspect about running an unregistered 'money transfer business.' Even if you are only going to do this on the side, as a hobby for yourself, you should still thoroughly familiarize yourself with the requirements of a 'money transfer business,' esp. around KYC, structuring, money laundering and such.

**In the US, law enforcement is trolling the btc money transfer market, looking small businessmen or hobbyists like BurtW, so that law enforcement can swoop in and confiscate your children's lunch money, piggy back, etc. They don't even need to make charges against you stick, because they use asset forfeiture laws to just take your sh*t.

In a nutshell, research your sh*t, and try to meet some others who are actively doing this and ask them all you can. You might try the currency exchange sub-forum.

I am thinking about buying bitcoins via Western Union or Moneygram, and reselling them for a small profit using the same money transfer services.  I wish to only do this if i'm within the bounds of the US laws.  I only plan to send and receive using cash at an agent location.  I don't ever plan to exceed 1500 per trade.  I would like someone to point me in the right direction because, I want to turn this into a legit day job for my own profit without breaking any laws.