Bitcoin Forum

I am thinking to make a site to exchange bitcoin and altcoins, is this legal?
1 do I need some license in USA or Canada
2 I need to request Id and address proof from the member who want to withdrew?
3 no Id required for exchange between bitcoin and altcoin? I noticed all the exchanger only request id when withdrawal
4 need to register with some bank? Or I can just let the members exchange and pay by themselves and I just be a bridge? Is this legal?
5 I can put a lot of altcoins there?

Thanks

I don't think it's illegal, even in the US, unless you want to trade with fiat too... For that you need a license, for the rest I don't think you do.

Yes

Only if fiat is involved

If it is a centralized exchange where people deposit money into your bank account, then it is only legal if you get a license. In the US, you would be considered a money transmitter business and you need a permit.

Whatever you want. It is your site.

Disclaimer: I am not a lawyer and this is by no means guaranteed to be accurate. If you intend on involving fiat, please look up the regulations with dealing with large amounts of fiat in the countries you wish to operate.

Regardless if you accept fiat or not, if you are serious about this it would be worth your while to get the advice of a lawyer in your locale, I assume Canada?

In the end you will be accepting deposits of something that has value, can be converted into fiat if not on your exchange certainly on others, and will be maintaining accounts on behalf of your customers. This could open you up to all sorts of legal reporting requirements as well as expose you to various liabilities.

It depends on where you are and who you serve.

To be legal in the U.S. or to serve U.S. customers, you must comply with U.S. federal regulations and typically the regulations of the states that you serve. You can read more about legal issues in the Legal forum: https://bitcointalk.org/index.php?board=74.0

Legal according to whom? Who cares if it's legal in country X and illegal in country Y. Bitcoin-altcoin exchanges run completely separated from the banking and fiat money system, so whatever the authorities think is irrelevant.

you can have your private server running the exchange on liberland, so no one will mess with you, no government can do anything about it

you should be pretty safe there even with fiat money

But how solid seems Liberland? I don't know, that thing still seems a bit dodgy to me. If anything, I would open my exchange in Swizertland which is a classic for people trying to bypass capital controls.
I don't think no one cares about crypto to crypto transactions (well in fact its getting regulated even at this level) but outside US it should be ok. Focus on the fiat transactions research.

Not bad idea but liberland doesn't have an army.. Merica will decimate anyone without an army.. they are tyrnats and pigs.. not the people the "leaders".

Thanks, by the way what is fiat?

also, if I get all the licenses for operating this in US, will it take a long time and cost a lot ?

Normal money. Stuff that governments issue e.g. USD, GBP, etc.

I think it will take a lot of time and cost at least 100 USD and the laws also vary state by state. I think you will need to get a license for all states that you want to operate in. If you offer your service to a particular state, then you must get the license for that state.

If you plan on doing this, I would advise you to get a lawyer who knows what he is doing.

Thanks, if I operate in one state but doing online work for a different state, still need license of that state?

If I only doing stuff convert from one cryptocurrency to another, such as from bitcoin to litecoin etc, in this way I do not need a license? I do not let people withdrawal by wire and by cash, only let people withdraw by Bitcoin

Thanks

they are pretty open minded, i think you can have a small garage there and build your own little server for a small exchange


you think that someone can declare a random war because a guy is running a tiny exchange on a neutral territory?  ;D

Yes. If someone from a state can go onto your website and exchange Bitcoin for fiat, then you are operating in that state. You will either need to get several licenses, or prevent users from states where you are not licensed from registering or doing anything.

I don't think you will need a license if no fiat at all is every involved. However, you should still consult a lawyer as the information that you get on this forum might not be correct.

I pmed him asking if I could make him the exchange, but its a bit early for him.
I am up for making an exchange for anyone, just PM me if you are interested. But I don't do fiat deposit/withdraw, obviously, as its illegal and you need a license for it.

Before you do anything else make sure your security arrangements are as bombproof as humanly possible. If there are any typical holes you'll have no exchange and some very unhappy customers before your opening day is over.

This is very hard if you have a large exchange with many pages. Of course make sure to protect against mysql injection, make sure to use PDO prepare statements for those to protect against that. Disable error showing publicly, make sure to not use default errors when there is an error from mysql or communicating with the bitcoin client (these errors can show your IP and password and username). Make sure to use long passwords, 2fa for any web wallets you are using, hash users passwords, and get ddos protections. Those tips are all very basic and easy to implement, there are many more but any decent programmer will know to do.

in my country,there is no laws which controled the distribution of the bitcoin
but there is a big local exchanger here (there are 65k members has registered)
i think its legal to making a bitcoin  altcoin exchange site

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