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Title: Question on starting a new crypto exchange Post by: achillez on May 07, 2015, 04:36:48 PM 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?
Title: Re: Question on starting a new crypto exchange Post by: Amph on May 07, 2015, 04:51:27 PM 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... Title: Re: Question on starting a new crypto exchange Post by: thejaytiesto on May 07, 2015, 05:26:08 PM 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.
Title: Re: Question on starting a new crypto exchange Post by: resources on May 07, 2015, 08:14:20 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. Title: Re: Question on starting a new crypto exchange Post by: oblivi on May 07, 2015, 11:53:19 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. 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.Also this thread needs to be moved to service discussion. Title: Re: Question on starting a new crypto exchange Post by: louise123 on May 08, 2015, 06:59:12 AM 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 (https://www.youtube.com/watch?v=iFDe5kUUyT0) This should help educate you a bit ;) Title: Re: Question on starting a new crypto exchange Post by: Whitehouse on May 08, 2015, 08:46:50 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. Title: Re: Question on starting a new crypto exchange Post by: WhatTheGox on May 08, 2015, 10:00:31 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. Title: Re: Question on starting a new crypto exchange Post by: nizamcc on May 08, 2015, 10:17:03 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. Title: Re: Question on starting a new crypto exchange Post by: Shindo1988 on May 08, 2015, 04:19:51 PM 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. Title: Re: Question on starting a new crypto exchange Post by: TigerMart on May 08, 2015, 04:35:39 PM 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. Title: Re: Question on starting a new crypto exchange Post by: Shindo1988 on May 08, 2015, 05:25:17 PM 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). ;) Title: Re: Question on starting a new crypto exchange Post by: moni3z on May 09, 2015, 01:51:33 AM 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.
Title: Re: Question on starting a new crypto exchange Post by: NorrisK on May 28, 2015, 06:25:24 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.
Title: Re: Question on starting a new crypto exchange Post by: resources on May 30, 2015, 04:54:55 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 Title: Re: Question on starting a new crypto exchange Post by: Mt. Gox on June 02, 2015, 02:14:46 AM 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 An Open Letter from Tristan D'Agosta Dear Poloniex Community, I wanted to take a moment to address some of the feedback we have received with regards to the recent changes at Poloniex. There are a fair number of rumors circulating around on social media, and I'd like to try and separate fact from fiction. We are a Money Services Business (MSB). Accordingly, we are bound by the rules and regulations defined by the Financial Crimes Enforcement Network (FinCEN), and regardless of how other businesses operate, we are legally obligated to follow the rules of FinCEN to the best of our ability. Starting on May 21, 2015, we will require your name and country for all withdrawals. To withdraw more than $2,000.00 USD equivalent within 24 hours, we will require your address and phone number. It is only if you need to withdraw more than $7,000.00 USD equivalent in a 24-hour period that we will require identity verification such as your social security number or photo ID. We are taking these measures to protect ourselves and you from potential criminal activity that could force a shutdown of our services. To be clear, any and all profile information we collect from you is collected in order to be compliant and to discourage people from using Poloniex unlawfully. None of the recent changes are to share or sell your data for marketing or advertisement purposes. While we are saddened by customers who have threatened to cease using Poloniex as a result of these changes, we have chosen the unpopular path of following the regulations that apply to us because we believe it is the right thing to do. We are grateful to our loyal customers who will continue to use Poloniex as we grow and innovate. It is unfortunate that the changes to our withdrawal policies have overshadowed the incredible work the Poloniex team has done to bring Margin Trading to the altcoin community. Nevertheless, we are encouraged by the amount of Margin Trading activity we have seen in such a short period of time, and are excited to be a part of this new era of alt trading. Tristan D'Agosta Founder of Poloniex 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). ;) 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. |