Why doesnt someone make a cash only exchange?

User705

legendary

Activity: 896

Merit: 1006

First 100% Liquid Stablecoin Backed by Gold

Quote from: t1000 on December 21, 2013, 09:58:02 AM

Quote from: exapted on December 21, 2013, 06:49:33 AM

Quote from: empoweoqwj on December 20, 2013, 02:05:52 AM

Quote from: exapted on December 20, 2013, 12:45:01 AM

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

A money changer deals with currencies. Bitcoin is not a currency in virtually every country on the planet at the moment. That's why money changers can't "do the same" with bitcoin.

I was not assuming that Bitcoin is a currency. I ask, where is the precedent for requiring ID checking of customers for cash-only small-quantity Bitcoin exchanges, when the same requirement does not apply to cash-only currency exchange below some value per transaction?

Secondly, I have a question for anyone here: Iff Bitcoin is not a currency, then how and when should KYC regulations apply to deposits/withdrawals to/from Bitcoin exchanges?

I would imagine a crypto only exchange would not necessarily need to comply with AML/KYC at this point. Bitcoin is either a currency or it is not. Applying currency rules to it in some places and not other is double standard.

All businesses that are open to the public and deal with cash must have aml/kyc policies in place. That doesn't mean they will check everyone's ID it means that there must exist policies and procedures to deal with it. Just like a gold coin shop doesn't check ID for small deals the same would apply to a cash for bitcoins business. Crypto to crypto exchanges will likely not need aml/kyc unless governments accept cryptos are real currency. Some have, some haven't.

t1000

full member

Activity: 182

Merit: 100

Quote from: empoweoqwj on December 21, 2013, 10:52:49 AM

Quote from: t1000 on December 21, 2013, 09:58:02 AM

Quote from: exapted on December 21, 2013, 06:49:33 AM

Quote from: empoweoqwj on December 20, 2013, 02:05:52 AM

Quote from: exapted on December 20, 2013, 12:45:01 AM

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

A money changer deals with currencies. Bitcoin is not a currency in virtually every country on the planet at the moment. That's why money changers can't "do the same" with bitcoin.

I was not assuming that Bitcoin is a currency. I ask, where is the precedent for requiring ID checking of customers for cash-only small-quantity Bitcoin exchanges, when the same requirement does not apply to cash-only currency exchange below some value per transaction?

Secondly, I have a question for anyone here: Iff Bitcoin is not a currency, then how and when should KYC regulations apply to deposits/withdrawals to/from Bitcoin exchanges?

I would imagine a crypto only exchange would not necessarily need to comply with AML/KYC at this point. Bitcoin is either a currency or it is not. Applying currency rules to it in some places and not other is double standard.

You cannot say "bitcoin is either a currency or not" unfortunately. Each country has a right to decide on that question, and it will take years for some to answer it. Very few have to date.

Ok. In a given country that is governed by law, bitcoin is either legally a currency or it is not legally a currency.

empoweoqwj

hero member

Activity: 518

Merit: 500

Quote from: t1000 on December 21, 2013, 09:58:02 AM

Quote from: exapted on December 21, 2013, 06:49:33 AM

Quote from: empoweoqwj on December 20, 2013, 02:05:52 AM

Quote from: exapted on December 20, 2013, 12:45:01 AM

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

A money changer deals with currencies. Bitcoin is not a currency in virtually every country on the planet at the moment. That's why money changers can't "do the same" with bitcoin.

I was not assuming that Bitcoin is a currency. I ask, where is the precedent for requiring ID checking of customers for cash-only small-quantity Bitcoin exchanges, when the same requirement does not apply to cash-only currency exchange below some value per transaction?

Secondly, I have a question for anyone here: Iff Bitcoin is not a currency, then how and when should KYC regulations apply to deposits/withdrawals to/from Bitcoin exchanges?

I would imagine a crypto only exchange would not necessarily need to comply with AML/KYC at this point. Bitcoin is either a currency or it is not. Applying currency rules to it in some places and not other is double standard.

You cannot say "bitcoin is either a currency or not" unfortunately. Each country has a right to decide on that question, and it will take years for some to answer it. Very few have to date.

t1000

full member

Activity: 182

Merit: 100

Quote from: exapted on December 21, 2013, 06:49:33 AM

Quote from: empoweoqwj on December 20, 2013, 02:05:52 AM

Quote from: exapted on December 20, 2013, 12:45:01 AM

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

A money changer deals with currencies. Bitcoin is not a currency in virtually every country on the planet at the moment. That's why money changers can't "do the same" with bitcoin.

I was not assuming that Bitcoin is a currency. I ask, where is the precedent for requiring ID checking of customers for cash-only small-quantity Bitcoin exchanges, when the same requirement does not apply to cash-only currency exchange below some value per transaction?

Secondly, I have a question for anyone here: Iff Bitcoin is not a currency, then how and when should KYC regulations apply to deposits/withdrawals to/from Bitcoin exchanges?

I would imagine a crypto only exchange would not necessarily need to comply with AML/KYC at this point. Bitcoin is either a currency or it is not. Applying currency rules to it in some places and not other is double standard.

empoweoqwj

hero member

Activity: 518

Merit: 500

Quote from: exapted on December 21, 2013, 06:49:33 AM

Quote from: empoweoqwj on December 20, 2013, 02:05:52 AM

Quote from: exapted on December 20, 2013, 12:45:01 AM

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

A money changer deals with currencies. Bitcoin is not a currency in virtually every country on the planet at the moment. That's why money changers can't "do the same" with bitcoin.

Secondly, I have a question for anyone here: Iff Bitcoin is not a currency, then how and when should KYC regulations apply to deposits/withdrawals to/from Bitcoin exchanges?

Because people withdraw fiat from bitcoin exchanges.

exapted

newbie

Activity: 51

Merit: 0

Quote from: empoweoqwj on December 20, 2013, 02:05:52 AM

Quote from: exapted on December 20, 2013, 12:45:01 AM

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

A money changer deals with currencies. Bitcoin is not a currency in virtually every country on the planet at the moment. That's why money changers can't "do the same" with bitcoin.

I was not assuming that Bitcoin is a currency. I ask, where is the precedent for requiring ID checking of customers for cash-only small-quantity Bitcoin exchanges, when the same requirement does not apply to cash-only currency exchange below some value per transaction?

Secondly, I have a question for anyone here: Iff Bitcoin is not a currency, then how and when should KYC regulations apply to deposits/withdrawals to/from Bitcoin exchanges?

empoweoqwj

hero member

Activity: 518

Merit: 500

Quote from: jojo69 on December 21, 2013, 04:17:22 AM

who says the website needs to be based in the US?

and we have taken the "cash" out of the equation

It would be great if someone could write down a half-page summary of current idea, so I can try and wrap my head around it.

User705

legendary

Activity: 896

Merit: 1006

First 100% Liquid Stablecoin Backed by Gold

AML & KYC are actually designed to combat cash transactions. The reasons governments are applying such to exchanges is that bitcoin is more analogous to cash then bank accounts/checks.

jojo69

legendary

Activity: 3164

Merit: 4345

diamond-handed zealot

who says the website needs to be based in the US?

and we have taken the "cash" out of the equation

empoweoqwj

hero member

Activity: 518

Merit: 500

Quote from: jojo69 on December 21, 2013, 03:53:39 AM

because it would be tied to an online exchange

an online exchange you could move value to anonymously

last time I tried localbitcoins I had to show my ID to deposit in the guy's account

An online exchange based in the US, where people have used "cash" to fund their accounts, by going to a shop anonymously. Yeah, good luck with that taking off

jojo69

legendary

Activity: 3164

Merit: 4345

diamond-handed zealot

because it would be tied to an online exchange

an online exchange you could move value to anonymously

last time I tried localbitcoins I had to show my ID to deposit in the guy's account

empoweoqwj

hero member

Activity: 518

Merit: 500

Quote from: jojo69 on December 21, 2013, 03:48:05 AM

I think so, at least as far as this thread goes...we have gone from "no wai, state will raep u" to having to drop by the coin store before going to the exchange

But its still a physical shop, and all the costs that incur. Which you would have to pass onto customers. Still not sure why that is better than localbitcoins or similar?

jojo69

legendary

Activity: 3164

Merit: 4345

diamond-handed zealot

I think so, at least as far as this thread goes...we have gone from "no wai, state will raep u" to having to drop by the coin store before going to the exchange

empoweoqwj

hero member

Activity: 518

Merit: 500

Quote from: jojo69 on December 20, 2013, 11:38:04 PM

Quote from: QuestionAuthority on December 20, 2013, 03:14:32 PM

Quote from: jojo69 on December 20, 2013, 03:02:41 PM

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

That could work. Certain forms of gold which trade as commodity contracts fall under the Broker Reporting Act of 1982. Specifically named are South African Krugerrands, Canadian Maple Leafs, and Mexican gold Onzas in quantities of 25 ounces (one 'contract') or more. Sales of these in contract quantities require a 1099B IRS information form, reporting the sale of a regulated commodity contract. There is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S. Mint strikes the gold Eagle bullion coins so I wouldn't trust selling their coins but everything else should be fair game.

Well, I think we can easily limit those specie to transactions of 24OzT or less

sounds like progress

So we've gone from a cash-only exchange to a gold and silver for bitcoins exchange. Progress? Maybe ....

jojo69

legendary

Activity: 3164

Merit: 4345

diamond-handed zealot

Quote from: QuestionAuthority on December 20, 2013, 03:14:32 PM

Quote from: jojo69 on December 20, 2013, 03:02:41 PM

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

That could work. Certain forms of gold which trade as commodity contracts fall under the Broker Reporting Act of 1982. Specifically named are South African Krugerrands, Canadian Maple Leafs, and Mexican gold Onzas in quantities of 25 ounces (one 'contract') or more. Sales of these in contract quantities require a 1099B IRS information form, reporting the sale of a regulated commodity contract. There is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S. Mint strikes the gold Eagle bullion coins so I wouldn't trust selling their coins but everything else should be fair game.

Well, I think we can easily limit those specie to transactions of 24OzT or less

sounds like progress

empoweoqwj

hero member

Activity: 518

Merit: 500

Quote from: Walter Rothbard on December 20, 2013, 10:57:12 AM

All the posts about Bitcoin ATMs and localbitcoins.com are missing the point - an exchange. The problem being considered is not "how to purchase Bitcoin with fiat." The problem is "how to facilitate cash deposit and withdrawal on an exchange." These are two different problems.

The cash only Bitcoin exchange idea makes my heart leap for joy, but I don't think it could work with current laws.

You've hit the nail on the head. And nobody is going to change the laws. Hence the idea doesn't work.

If you make it "cash only" you are attempting to bypass all the AML and KNC stuff. This just ain't gonna fly folks. The government spents a lot of money attempting to know who is sending money to who.

Anon136

legendary

Activity: 1722

Merit: 1217

Quote from: Walter Rothbard on December 20, 2013, 10:29:04 AM

Quote from: Anon136 on December 19, 2013, 03:55:24 AM

Its a simple idea, leverage the advantages of the devision of labor in order to overcome government meddling.

The exchange would open up shop probably in either los-angales or new york and would only accept deposits in the form of cash at the front counter. The exchange would be safe from a myriad of legal trappings which would allow them to focus 100% on the service they are intended to provide and the market could innovate highly decentralized mechanisms of getting cash from one side of the country and into the front door of the building. Decentralized community of peers working within the framework of a reputations systems could provide the money transmission instead of some big payment processing company. As an example, suppose we have two brothers, one lives next to the exchange and another 1000 miles away. The one brother could take payments and the other would make deposits and when ever they visited each other periodically they would clear out the debt between each other, always operating within the black or gray market.

There may be a really good reason why this doesn't exist and i just havn't thought about it yet.

It sounds like a dream come true. I know the government would make it impossible because they feel the urge to look into all financial transactions. In real life we call this busybodyness and let our neighbors know that they aren't welcome to pry that closely, but when people win popularity contests they feel it gives them the right to do this kind of thing and to even prevent some transactions - and to punish you if you don't comply. Sad

Another thing I would like to see is a precious metals exchange. This could operate a little bit like those "cash for gold" places that sprung up the last five years. You send in your gold and silver jewelry or junk or whatever and receive credit on the exchange (minus an appraisal fee and other fees, most likely). The exchange facilitates trading between grams of gold, grams of silver, and units of cryptocurrency. When you want to withdraw gold or silver the exchange would probably permit doing so in defined units such as nationally minted bullion coins or silver rounds. Again, likely minus a fee for shipping, insurance, security, etc.

Somebody please make this happen!

Sometimes I want to cry thinking of how great the world would be if all of this could be done and how it isn't likely to happen anytime soon and I may not live to see it.

it would be neat. im sure you couldnt escape every regulation, obviously. but perhaps it would atleast make fewer of them apply to you.

QuestionAuthority

legendary

Activity: 2156

Merit: 1393

You lead and I'll watch you walk away.

Quote from: jojo69 on December 20, 2013, 03:02:41 PM

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

That could work. Certain forms of gold which trade as commodity contracts fall under the Broker Reporting Act of 1982. Specifically named are South African Krugerrands, Canadian Maple Leafs, and Mexican gold Onzas in quantities of 25 ounces (one 'contract') or more. Sales of these in contract quantities require a 1099B IRS information form, reporting the sale of a regulated commodity contract. There is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S. Mint strikes the gold Eagle bullion coins so I wouldn't trust selling their coins but everything else should be fair game.

jojo69

legendary

Activity: 3164

Merit: 4345

diamond-handed zealot

How about this?

The shop only accepts gold and silver bullion, no FRNs allowed.

Granted, it ads another annoying step for depositors, but then we are never touching their fiat so those rules no longer apply.

QuestionAuthority

legendary

Activity: 2156

Merit: 1393

You lead and I'll watch you walk away.

Quote from: cspeter8 on December 20, 2013, 12:13:54 PM

Perhaps this might be a good idea to pass on to entreprenerial shops on indian reservations that sell cigarettes without the usual tax. They can also buy and sell bitcoin for USD maybe?

Indian reservations are just likes states and have no autonomy from federal laws. They are treated like states when running a business. Indian "Smoke Shops" only sell cigarettes without the state tax but you still pay federal excise taxes which are included in the sale price. It would be the same as driving to Nevada to buy cheap cigarettes and taking them back to California. Avoiding the state tax is still quite a bonus and can be very high depending on which state the reservation is located. It's federal law that requires Bitcoin businesses be licensed and comply with AML/KYC so that would still apply on an Indian reservation.

Topic: Why doesnt someone make a cash only exchange? (Read 4724 times)