Question on starting a new crypto exchange

Mt. Gox

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I was always under the impression that an altcoin exchange which only deals with altcoins wouldn't fall under money transmitter laws but Amph's link shows that the situation is actually far from clear.

Interestingly, Poloniex is registered as a MSB despite not touching any fiat currencies (unless you count USDT as being a fiat currency):

Quote from: Shindo1988 on May 08, 2015, 12:25:17 PM

Quote from: TigerMart on May 08, 2015, 11:35:39 AM

Quote from: Shindo1988 on May 08, 2015, 11:19:51 AM

Quote from: nizamcc on May 08, 2015, 05:17:03 AM

Why not try out VPN and try to show that exchange is working from different country instead of US?
There might be no problems I guess if you do it like that.

I don't think it really matters where the hosting server is.
If you operate within the U.S. then it makes it their jurisdiction.

Besides remember Ross?
His server was in France and the feds still took an image of it.

Then what about direct trading exchanges like LocalBitcoins.com or www.100bit.co.in ? I dont think they need money transmitter license.

They are not exactly an exchange are they.
And to be honest, I do not know if they need a license and what kind of license.
That being said, I am not from the U.S. so I wouldn't know much about your laws there, but I see a lot of things.

Let's not forget than FinCEN asked Mircea Popescu to give them information about his exchange.
He has nothing to do with the U.S.

Conclusion, you never what to expect from the government(s). Wink

There are many similarities though. Both LocalBitcoins and traditional exchanges connect buyers with sellers. LocalBitcoins also has a built-in escrow system so they handle BTC deposits and withdrawals as well.

resources

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Activity: 123

Merit: 100

Quote from: NorrisK on May 28, 2015, 01:25:24 AM

At this point in time I would be bothered less with US regulation than with malicious persons hacking your exchange. I think the chance to get burned by insufficient security is greater than being legally pursued at the moment.

The biggest problem is with the owner himself running away with the exchange money #goxed

NorrisK

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At this point in time I would be bothered less with US regulation than with malicious persons hacking your exchange. I think the chance to get burned by insufficient security is greater than being legally pursued at the moment.

moni3z

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Activity: 899

Merit: 1002

You still may have to register with FinCen I believe it's free. Probably still have to respect daily limits too and have somebody designated as an 'anti money laundering' officer or some stupidity. Your best bet is to consult a business lawyer in the US to get a definitive answer because the complicated laws are designed so you hang yourself and they can fine you into oblivion.

Shindo1988

full member

Activity: 154

Merit: 100

Bitcoin Samurai

Quote from: TigerMart on May 08, 2015, 11:35:39 AM

Quote from: Shindo1988 on May 08, 2015, 11:19:51 AM

Quote from: nizamcc on May 08, 2015, 05:17:03 AM

Why not try out VPN and try to show that exchange is working from different country instead of US?
There might be no problems I guess if you do it like that.

I don't think it really matters where the hosting server is.
If you operate within the U.S. then it makes it their jurisdiction.

Besides remember Ross?
His server was in France and the feds still took an image of it.

Then what about direct trading exchanges like LocalBitcoins.com or www.100bit.co.in ? I dont think they need money transmitter license.

They are not exactly an exchange are they.
And to be honest, I do not know if they need a license and what kind of license.
That being said, I am not from the U.S. so I wouldn't know much about your laws there, but I see a lot of things.

Let's not forget than FinCEN asked Mircea Popescu to give them information about his exchange.
He has nothing to do with the U.S.

Conclusion, you never what to expect from the government(s). Wink

TigerMart

full member

Activity: 271

Merit: 117

Quote from: Shindo1988 on May 08, 2015, 11:19:51 AM

Quote from: nizamcc on May 08, 2015, 05:17:03 AM

Why not try out VPN and try to show that exchange is working from different country instead of US?
There might be no problems I guess if you do it like that.

I don't think it really matters where the hosting server is.
If you operate within the U.S. then it makes it their jurisdiction.

Besides remember Ross?
His server was in France and the feds still took an image of it.

Then what about direct trading exchanges like LocalBitcoins.com or www.100bit.co.in ? I dont think they need money transmitter license.

Shindo1988

full member

Activity: 154

Merit: 100

Bitcoin Samurai

Quote from: nizamcc on May 08, 2015, 05:17:03 AM

Why not try out VPN and try to show that exchange is working from different country instead of US?
There might be no problems I guess if you do it like that.

I don't think it really matters where the hosting server is.
If you operate within the U.S. then it makes it their jurisdiction.

Besides remember Ross?
His server was in France and the feds still took an image of it.

nizamcc

legendary

Activity: 1218

Merit: 1007

Why not try out VPN and try to show that exchange is working from different country instead of US?
There might be no problems I guess if you do it like that.

WhatTheGox

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Activity: 812

Merit: 1000

Quote from: achillez on May 07, 2015, 11:36:48 AM

Curious about the US rules for a new crypto exchange. If the platform only enables exchanging of altcoins for bitcoin or other coins (i.e. no real currency is involved), is it still labeled a money transmitter, and you need to register with FINCEN or no?

Dont touch the US is always a safe idea or maybe remain anon if you have to. If you look @ a site like primedice they've now pulled out the US that says it all really.

Whitehouse

sr. member

Activity: 448

Merit: 250

Quote from: achillez on May 07, 2015, 11:36:48 AM

Curious about the US rules for a new crypto exchange. If the platform only enables exchanging of altcoins for bitcoin or other coins (i.e. no real currency is involved), is it still labeled a money transmitter, and you need to register with FINCEN or no?

You'll probably be ok for now but I'm sure they'll change the law at some point, but if you were going to set one up I wouldn't host it in the US just to be safe. I'm not sure why you would want to create another altcoin exchange though as there are plenty of ones around and its hard to attract new customers who trust you when they can just use existing ones.

louise123

sr. member

Activity: 462

Merit: 250

Quote from: resources on May 07, 2015, 03:14:20 PM

Well that kind of website should be treated different from the ones that deal with real money. I don't think there is going to be any problem with such websites and government.
Also this thread needs to be moved to service discussion.

If your definition of real money is fiat, then you still have a lot to learn.
Actually here: https://www.youtube.com/watch?v=iFDe5kUUyT0
This should help educate you a bit Wink

oblivi

hero member

Activity: 700

Merit: 501

Quote from: resources on May 07, 2015, 03:14:20 PM

Well that kind of website should be treated different from the ones that deal with real money. I don't think there is going to be any problem with such websites and government.
Also this thread needs to be moved to service discussion.

The crypto world is a wild wild west literally speaking, no one has a say about it. As mentioned before, as long as you keep it away from fiats, the crypto world cannot be stopped.

resources

full member

Activity: 123

Merit: 100

Well that kind of website should be treated different from the ones that deal with real money. I don't think there is going to be any problem with such websites and government.
Also this thread needs to be moved to service discussion.

thejaytiesto

legendary

Activity: 1358

Merit: 1014

You can do anything you want as long as you keep it crypto only. When you bump into an endless sea of problems is when you are allowing people depositing national fiat currencies, that's where you better have a decent lawyer just in case anything wrong happens. You always want to study it before you add any fiat deposit/withdraw deposits.

Amph

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Merit: 1070

Quote from: achillez on May 07, 2015, 11:36:48 AM

Curious about the US rules for a new crypto exchange. If the platform only enables exchanging of altcoins for bitcoin or other coins (i.e. no real currency is involved), is it still labeled a money transmitter, and you need to register with FINCEN or no?

i don't think so because i remember that cryptsy was running without problem until they added the usd market, which was closed for a long time because their were waiting for approval

found this anyway http://bitcoin.stackexchange.com/questions/11339/does-an-exchange-of-only-virtual-currencies-fall-under-fincen-regulations

in this link they said basically, that it is treated as money trasmitter

trollbox on poloniex answered that they are abide the US law, then a mod tell me that it would be wise to have it, but it doesn't seems mandatory, something like if they can't get you you are free to operate at your own risk...

achillez

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Activity: 874

Merit: 1000

Curious about the US rules for a new crypto exchange. If the platform only enables exchanging of altcoins for bitcoin or other coins (i.e. no real currency is involved), is it still labeled a money transmitter, and you need to register with FINCEN or no?

Topic: Question on starting a new crypto exchange (Read 1905 times)