Bitcoin Forum

Hi,

I want to build a LEGAL virtual currency exchanger, which includes my own virtual currency as well like a token... i can easily create this but it has a bad rep in terms of legality (e-gold, Liberty Reserves)

I want the format to be like this...

BTC > Token > credit card or bank.

It will help easier to cash out your BTC to your card it's fraud proof but it screams money laundering.

so i don't know any suggestions? i like the idea of virtual currency exchanger big fan but it has such a bad rep honestly.

Thanks

Goldman

If you want to help us to exchange money easily or to help to make it easier to use. Then things you should do is a security and efficient in making what you want to create, if you provide such assistance but the security is so bad then it will not be useful to everyone

And make sure your website is support for android smartphone, and you must add another payment processor too ( are like skrill,paypal,okpay and another) of course with low fees.

IMO theres no problem using your own currency inside your exchange but i think you shouldnt force the customer to use it.

What are those illegal services and activities everybody is talking about by the way? Why did you said "legal" specifically? Are there any famous and illegal exchanges out there? If so, what makes them illegal?

If you want to use your own token as a auxiliary medium used only on your exchange - then it is very bad idea.
People won't like it because it has very bad connotations of being used as scam coin, and being totally useless.
If you want to build an exchange then avoid any additional tokens.

can you explain more, i am having a hard time undestanding what is the point of this "Token" in the middle.

right now we can easily omit the token from the process and do this:
BTC > > credit card or bank.

is this token something like what btc-e and some other exchanges have?
it is called btc-e code, cex.io vouchers and such things that you can buy and put in the textbox and receive the money equal to that
is this what you mean by token?

firstly..
the "dollar" balance on an exchange/orderbook is not actual dollars.. its just a database entry. a token
the "bitcoin" balance on an exchange/orderbook is not actual bitcoin.. its just a database entry. a token

the real dollars are in bank accounts... not on your server
the real bitcoins are (supposedly) in cold wallets.. not on your server

so the database entries on ALL exchanges are actually "own virtual currency.. like a token"
where the balance can be redeemed like for like for a real bank transfer or real bitcoin transaction when the customer requests a withdrawal (swap token for real asset)

the problem i see is not about creating the new currency, thats easy.. but its about having "balances" to:
ponzi: make someone filthy rich at the cost of others losing out by internally changing balances
counterfeiting: making NEW real dollars appear in real banks  (impossible to do from a third party service)

if you cant solve the ponzi or fractional reserve stuff, users wont trust ya.

so you dont have to worry about counterfeiting in regards to fiat., but you do have to worry about ponzi's, and theft
EG
day1, one token is worth $1. day100 one token is worth 10cents.
seems ok. but later investigations reveal you personally controlled the market price to decrease it to intentionally cause investors to lose out. while you kept and spent the real bitcoin/dollar deposits of your investors

as for regulations in regards to fiat (bank account funds)
if something is pegged like for like. EG 1 token = 1 dollar, even if you were to name your pegged token bitUSD, FIATCOIN, or DISNEYears(any random name) by obviously having a clear like for like value and offering a swap service. and the only purpose of the token is to represent fiat..you are a money service business

if the value is not pegged and fluctuates. has different real uses that means it doesnt representing fiat, then that token is an asset and changing other currencies for it is just an asset swap. which is not money service, but may meet securities regulations or asset regulations(stocks/shares) hurdles depending on country of operation and customer base

your answer was right above your question....

You are 100% correct .... these tokenized options are very controversial and authorities will look at this with serious concerns. Do you have to adhere to FinCEN requirements for these types of systems

in your country? The KYC/AML regulations will make it virtually impossible for these types of systems to succeed. Name one example of a system that has not come under fire for some type of

criminal activities in past history?  ::)

I secondly agree with you....security and efficiency has to be taken into consideration...