Bitcoin Forum

I've been following the development in the UK in line with cryptocurrency for a while now, and I must say that I'm not so happy about most of the things I read. The hypocrisy of that nation is much, they could have just announced to the whole world that they've banned crypto instead of making life difficult for crypto enthusiasts by introducing unfriendly rules and preventing businesses around it by blocking exchanges and other business initiatives with sanctions.

Of course, it's not all their financial institutions, but once the strongest are doing so, how long would it take for more issues to arise?

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Can you imagine? Banks claim to be blocking people and businesses because of the FTX collapse. How many banks have they stopped because of the ugly past of many UK banks that went insolvent?

The problem of one establishment out of many should never be a yardstick in judging others. For me, these banks are anti-crypto and their actions are high level of hypocrisy.

People should understand that the governments are not our friends. Why are you getting mad? Most of the time govs make our lives more difficult. This is just another example of that. The so called crypto-friendly govs like El Salvador and St. Kitts are crypto friendly only because they are using this to attract crypto investors and there is nothing wrong with that... However, these investors don't really prefer countries like El Salvador to make investments, they prefer countries such as France, USA, Germany, UK etc... Let's be honest El Salvador is not a country most of us would dream of living in. In this big picture, as far as I understood it, the UK simply don't give a damn about crypto investors. :/ I guess they don't need our money.

Bitcoin and other coins, and tokens were created without the help of the banks. People can buy coins and tokens without the need of the banks. You have your coins in bank, you do not have the keys yourself.

What I am looking forward to is for SEC in United States to approve bitcoin spot ETF which will make more people to trade bitcoin in the stock market.

What I do not like about the UK banks is that they blocked crypto exchanges to have access to sterling. But life with people exchanging crypto with other people, is that not better than relying on organizations.

I have lived my crypto life without the banks and the government.

I wouldn’t say I am surprised because we all know that both banks and government no matter how they twist it would not fam bitcoin or cryptocurrency at large because they feel it is a strong threat to there existence even if we are of the opinion it is just an alternative to them. The collapse of these entities would be used to spread misinformation or rather stereotypes about bitcoin just to make people think twice about them.

Just like what _act_ said there are many that even use bitcoin or cryptocurrency outside banks. Personally I even feel it is more convenient because having it associated with the banks only compromises one’s privacy and as such leads the government back to you when they want

A friend of mine some months ago called me, asked me questions about how to buy bitcoin. He wanted to use an exchange before, but later decided to use a bank in the UK. We did everything together though communication. What I noticed was that the money deducted as fee was very high, just like if you want to withdraw bitcoin from exchanges. The banks are even using the means to earn.

Most of these UK banks has political affiliation or connection. They will always do the bidding of the political class. The political class wants to control everything about the citizens including how they keep or save their own money. Banks like Nationwide are placing some restrictions like not allowing customers to buy cryptocurrency with debit or credit cards. They have also restricted the amount that can be transacted using cryptos. Their common excuse will be that they are protecting citizens from scams or loss of funds caused by the fall of exchanges.

If the government really wants to protect its citizens from fraudulent exchanges, it should promote awareness programs that encourage citizens to use decentralized platforms to engage in bitcoin transactions. FTX will always be the defense of the government in its selfish quest to silence crypto.

They may be of threat to other cryptocurrencies because of their centralization but there's nothing they can change or influence about bitcoin, despite they were the ones making all these regulations, we still have some part of them who have already invested in bitcoin or other cryptocurrencies in their closet but they won't comes out to declare such, that's why you could discover contrary opinions on this subject matter whenever it was been raised.


The only regulations they could effect is to avoid the banks from performing anything that has to do with cryptocurrency transactions in which i think most of the countries have achieved while some don't make such ban, but they can influence the bitcoin adoption through this because it's decentralized.

Isn't this one of the examples of why Satoshi Nakamoto began to develop a decentralized financial system? Yes, banks decide for you how you can manage your own money, we already know this, which is why we are here.

And, frankly, the mentioned Binance and Coinbase, as for me, do not look any better than banks, these are the same centralized organizations that decide for you how you can manage your money.

The real bitcoin is only on the bitcoin blockchain. All these centralized intermediaries, who in reality control all your money by 100%, will behave as they want, because they can.

If you want to retain the right to manage your money, try to deal with such centralized intermediaries as little as possible.

I'm sorry that banks are blocking payments that are related to major exchanges, but I guess if they are private businesses, they are allowed to do that, and it's natural for banks to see crypto exchanges and cryptos in general as their rivals.
But the official crypto regulations in the UK are nice, I think, especially with the tax-free annual allowance covering crypto profits. It's not like they have a consistently crypto-friendly policy in the UK, but it's not too restrictive either.

My view is quite agreeable on this issue, the common interests and individual interests of each subject in each situation are different, maybe at that time they have objections and consider it quite negative, but Over time it is clear that we are seeing them open up to this field more and more. I don't mind and judge their behavior, as long as they are bringing it to the attention of many people even though sometimes associated with negative news for crypto, really an ordinary citizen I don't have much to worry about as their government makes people's lives better, we will still believe and support them.

I wouldn't see UK as being hypocrite as regards the regulation of cryptocurrency which is allowed and has been approved. They are trying to make the profits that banks would have lost due to DEX emergence. Perhaps, if they notice the correspondence of citizens using more of cryptocurrencies, the taxes would be increased, stricter rules would be set.

It should be considered more or less a test to see usage and acceptance from the citizens. It is to also keep an eye on possible criminal minds and transactions too.
What US is doing, is more hypocritical because their motive is skewed even as we know that there are more crypto users there.

They want control and adoption preventive measures without bringing down the ban hammer. The more people flee their grip by dumping centralized fiat and buy bitcoin, the more they are going to push back and add more restrictions. Specially with the worsening economy, the fear will continue to grow about more people finding the "exit" called bitcoin...

You mean their regulations against Bitcoin and cryptocurrencies, not their development.

If governments want to launch their CBDCs and want their citizens to use CBDCs, they must force their citizens to stop using Bitcoin and cryptocurrencies as least as possible. If you are governments, you will do the same.

They only reduce usage from their citizens because there are non KYC exchanges serve their citizens.

Indeed, that's the reality, they governments and banking institutions don't really like crypto basically and that's not really a surprising thing because it has happened so often, but yes it's not feasible if it's because of the FTX case that everyone is affected, but you don't need to worry if you can't exchange your bitcoins and or your bitcoin trading results from the exchange, then you exchange them for fiat and you want to withdraw them to your account, I think you should choose the P2P transaction option, and it is the best option for such a situation. IMO

You are expressing the widespread dissatisfaction felt by many crypto fans, including myself. British banks and their peers are acting recklessly, like a bull in a china shop. They have chosen to use the kind of alarmist language we usually hear from established financial institutions rather than take the time to learn and adapt to this new technology. That's like a candle maker complaining about the introduction of electric lighting.

Banks who needed bailing out during the 2008 financial crisis are the ones that are refusing to adopt a new technology due to a few isolated incidences. Wouldn't all these banks have to be shut down because of their past insolvencies and reckless bets if each organisation was evaluated based on the performance of its weakest link?

It's disgusting to see how backwards they've become, but we've come this far before and won. A movement for a concept whose time has come cannot be stopped.

Pardon me but I don't know why this is surprising to you or even making you scared, just like UK other government of lots of countries are doing same thing, they are trying to frustrate crypto-currency enthusiast by making Transaction hard in terms of bank and exchange connection.

My country too has such regulations and restrictions but we crypto-currency enthusiast has still always survive infact many more people has got into crypto in my countries.

There are lot of ways to still carry out your crypto activities without any restrictions, you just have to avoid centralized exchange and avoid crypto platform in link with the government.

Why would they be any different? I mean they have been favoring the rich and disliking the poor since their creation to be fair, literally since the times of royal lords and regular plebs, we have seen UK be a bit more heavy on the rich and the powerful, so they are not acting any different in this case neither.

UK has been filled with people who have stolen from others and they have never cared about that even once, so it is not going to really change much in the future neither. I am guessing that the best thing to do in this case would be making sure that they are aware of the mistake they have done and take all the crypto companies and money people have in the UK outside, they will see how much tax they would lose that way and would reverse their action.

It's surprising for someone who expects something good that will come up with MICA, it's a regulation that people are waiting for.  It's disappointing if you think it's over and that SEC's crackdown is over after ETF approval and BTC and ETH are considered commodities yet transactions you are to do will be blocked.

It may also crush your heart when you learn all these. And while you have some BTC to sell, means you can't cash out also.
It will turn out to be a punishment when banks are the next in line that will try to regulate transactions. I bet they are the next to spread fud to bring prices down.

I don't expect the government to be favorable towards crypto, so I don't get surprised by news like these.
It's very hypocritical to punish a whole industry because of the failures of some people while helping out another industry when they crumble. If the FTX saga was a bank the government would have stepped in to really help and make sure it doesn't go bankrupt.


However we look at it, it's very difficult to live life without fiat and those fiat are kept in the bank. So we always have business with the banks, especially in some countries. Most people buy their bitcoins with fiat and how do you want to buy without transferring from a bank?

Traditionally, banks have operated as centralized organizations, adhering to the regulations and instructions set forth by central banks or governments. Consequently, it is uncommon for them to endorse decentralized cryptocurrencies like Bitcoin. It is unrealistic to expect widespread support for Bitcoin from banks and governments since they are uncomfortable with its inherent lack of control. Bitcoin's decentralized nature makes it impossible for them to exercise authority over it, which goes against their preferred system of control. As a result, they are likely to continue finding excuses to hinder Bitcoin's progress and undermine its viability, despite their inability to fully ban it.

This one, just like in the US wherein Biden and his political cohorts are in power, and so their hard line stance against bitcoin, just like what we are seeing in Gary Gensler of SEC. So there is politics behind all of this, and maybe UK is not immune to this.


They are just hiding their real intentions with this excuses. There are a lot of politicians who benefited from SBF that's why it takes time for the US government to hand him down the verdict.

There is also another related thread: UK Crypto, Stablecoin Rules Receive Royal Assent, Passing Into Law. (https://bitcointalk.org/index.php?topic=5458075.0)

I think, all the banks are like that too, because Bitcoin really bothered them. the bitcoin system is so mismatched with what they did. They changed the gold system from fiat so they can easily control money. Now, a new product appears to replace in what they have to destroyed long time ago (gold). I think, that the big problem of crypto is still bank where the government still have control of it. they try to erode it by creating CDBC, a camouflage product to make crypto more centralization so easy to control people around the world.

The banks nowadays are fighting against something that, day after day, is becoming bigger and bigger and they don't know how to stop it. The smart banks will embrace cryptos and make a profit out of it; other banks, like those that are blockings transfers for stupid reasons like "your own security" will just end up like the dinosaurs did. Maybe not in 1 year, maybe not in 5 and not even in 10, but eventually they will.

The UK is hypocritical on financial issues in general. The City of London has long been a global money laundering centre:

Londongrad: how the City became a money-laundering haven (https://www.icaew.com/insights/viewpoints-on-the-news/2022/jun-2022/ec-londongrad-how-the-city-became-a-moneylaundering-haven)

Why is London money laundering capital of the world? (https://www.helsinkitimes.fi/world-int/21280-why-is-london-money-laundering-capital-of-the-world.html)

How London became the dirty money capital of the world | FT Film (https://www.youtube.com/watch?v=gyk12Wf_TeQ)

This is for large-scale laundering. For individuals you have companies like Transferwise (now Wise) that are used to hide funds from their countries' treasuries as well.

If they have this policy regarding cryptocurrencies, it is not as they say to protect consumers, it is because they do not control them.

Why are they hypocrite when there's something they are responding to? It's not like they're openly supporting or promoting crypto and then they are also blocking the transactions to and from centralized exchanges. They're responding to something big. The fall of FTX wasn't small. It made into the headlines. It caused a huge ripple effect across the crypto industry. If these banks weren't responding, then I guess they're being negligent. We don't like it of course, but are these banks in violation of the law in any way? Anybody can file a complaint against them or even bring them to court.

It’s not only on the UK it’s everywhere like that. After FTX many lost their savings and governments ended up taking action. They don’t want to deal with the public complaining about being scammed by FTX so they would rather just outlaw it completely.

Hence why many banks cut ties with Binance. Because they don’t want to be liable in the offchance that they are another FTX. They basically want people to buy Bitcoin on the stock exchange which they know is regulated. Hence why there is a good chance that Blackrock etf is approved.

Btw, In general, if we look at banks as one of the traditional financial institutions, there are times when we see cryptocurrencies as one of the formidable opponents of their business model. they see this from a competitive business standpoint. I'm sure they will maintain their dominance in the financial sector. Yes. We are the roosters, not the others. Apart from that, if we role go back to the past, Bank itself has also faced a collapse with various financial scandals. So, from your question above Why are UK banks blocking transfers to and from crypto exchanges In 2023?

One of the common classic reasons is the application of risk management and customer protection that they have provided for their customers. That means, indirectly they have a responsibility to manage risk and protect the assets of their customers. This became a strong additional reason as justification for their actions from the collapse of FTX exchange as a crypto exchange at that time.

Politicians thrive on hypocrisy, they claim they will do one thing and then they do the opposite, and when confronted about that fact they look at you as if you were crazy and they never said such a thing, that is the kind of person you are talking about, we have known that politicians are against bitcoin and this market for a long time, however they cannot ban it openly on places like the UK because then people will begin to ask questions about the reason behind banning an asset which does not damage to anyone, so they shadow ban it with all kind of regulations which discourage and punish anyone that wants to deal with it.

The link OP has added in the thread, is news for May 2023. I think the UK has now gone the extra mile to introduce a crypto-friendly regulation. I want to share a couple of news links that are more recent,

https://www.coindesk.com/policy/2023/06/19/uk-crypto-stablecoin-laws-approved-by-parliaments-upper-house/

https://www.gadgets360.com/cryptocurrency/news/crypto-regulated-financial-sector-uk-4168432

UK very well understands that if they don't create new job opportunities for their population, that will be disastrous in the future. So things have changed for good.

Personally, it is not strange to me that such news comes to us from the UK, since for years the official position of their central bank has been very negative when it comes to Bitcoin and generally all other "cryptocurrencies".

Also, I would not call it hypocrisy, but a combination of several factors such as incompetence, ignorance and of course an attempt to preserve the national currency as the basic mechanism of financial security. It doesn't hurt to mention that the UK has been part of the EU for decades, but it has never been part of the eurozone, which speaks for itself.

Furthermore, it should be known that banks protect themselves and their interests, but in a way also the interests of clients from various scams, more and more of which are related to cryptocurrencies. People who are scammed mostly turn to banks for help, and why should banks even deal with such things when it is much easier for them to put a ban on such transactions and protect themselves and their customers.

They actually say "if you really want to invest in crypto find another way, don't do it directly from the bank account".

I'm not mad but just been curious about why the government can't allow Equity and Fairness for every sector, especially crypto-related deals.

Of course, they have objectives but why are they considering it negative since it's business just like others that could go insolvent? If they are truly protecting the interests of the citizens as they have claimed, why are they allowing businesses around gambling and online trading? Because many of such had also liquidated in the past without them blowing the trumpet. This is hypocrisy my friend.

They are actually hypocrites, see my reply to @bussybuddy above. This is not about regulation, are they not regulating other sectors? Why is it that they are so anti-crypto in their resolves?

This is too obvious.

Can you show me more references especially other than sites that mainly spread referrals/affiliates?

AFAIK, it quite surprises me since the last time I seek around the matter, the UK are thriving to become a crypto hub, I also found out that they have been long-standing to work toward cryptocurrency regulations(https://www.gov.uk/search/all?keywords=crypto&order=relevance). Recently, Andreessen Horowitz also believes in the UK's future concerning about this spaces. So they commit to making a new office over there.

What is important is we should not expect a loose cryptocurrency regulation. It is in the business of the government to set strict and set control on cryptocurrency in general.

I've been in the industry for 6 years now, the UK/FCA has been nothing but a nightmare to work with on crypto front.

I think there is more ignorance than malice, they simply have ruined UK businesses to date and favouring only the larger banks.

Anecdotally, I know a couple companies who moved all operations and market focus outside of UK yet their entire dev teams still reside in the UK and won't service UK customers.

To say UK is crypto friendly is simply untrue unfortunately.

From UK banks I still hear the 'yay blockchain, yay cbdc, yay NFTs' because they have very poor advisors (managment consultants I think is the polite term) who blagged a senior position and talk with such confidence yet have no idea about the real economics or technical merits of the technologies.

Santander and one other that I can't name are somewhat ahead of these others though and now progressing on the lightning band wagon.

Those banks that come up with the "your own security" excuse and lazy. They can't even come up with a better excuse. They can't even guarantee their own security so why should I trust them?
Smart banks would know by now that they can't win against Bitcoin. Maybe they can win against other centralized altcoins, but when it comes to Bitcoin, all they can do is fight, they can't win. And the longer they fight, the longer they miss out.
Bitcoin stands against every fraudulent wall they build.
They should be lucky there are still people who don't trust Bitcoin but trust fiat.
Banks mismanage customers funds all the time but they're here acting like our personal lord and savior, it's so bad people are still falling for that crap.

Governments and financial institutions around the world are taking different approaches to cryptocurrencies, and these approaches can vary widely. Some countries have adopted a more restrictive stance, while others are looking for ways to regulate and harness the potential of cryptocurrencies… The introduction of stricter regulations may affect cryptocurrency enthusiasts and related businesses. Governments most often seek to balance innovation and consumer protection, which can lead to the implementation of stricter regulatory measures.


I also found some information on the subject: https://freemanlaw.com/cryptocurrency/united-kingdom/

The only thing I can say is that it is difficult to predict how policies and regulations will evolve in the future… there may be changes in the position of governments and new initiatives that could have an impact on the  Bitcoin ecosystem.

Isn't Rishi someone that's a proponent of the cryptocurrency movement? Why is it that it's still something that's being talked about up till now?

Is the monarchy actively opposing them? What gives?

So you mean to say that even with all this shenanigans of "UK going against the concept of crypto" going on, the whole country is pretty much cool with it? well that's good enough and I expect of that cause UK's outright one of the biggest cryptocurrency movers in the whole planet, and all this time I thought everything was going fine and dandy there cause Rishi's a cryptocurrency proponent and I had hoped his sentiments trickled down to the rest of the country but as it sounds today it feels like everyone in the upper echelons of the UK government is dogging on it.

I do not see anything strange in this behavior of UK banks. Banks are an economic and at the same time a political instrument of any state, regardless of their form of ownership. Even in minor matters, they must act strictly according to the instructions of the higher authorities. And almost all states are not very friendly towards cryptocurrency. Therefore, it would be foolish to assume that their governments will stand by as the cryptocurrency grows and gains strength and influence among the population. At the same time, it must listen to the opinion of its future constituents. Therefore, this process is ambiguous. This explains why governments cannot decide on their attitude towards cryptocurrency, although they are trying to tighten its regulation in some places. The degree of freedom of speech and the rights of the population is also of great importance here.

Trust them and sacrifice your privacy while security is unknown. Who will make this bet?

Central banks and commercial banks know that Bitcoin is a big risk for them. When more people know about strength of Bitcoin network and Bitcoin transactions like its strong decentralization, capacity to proceed transactions safely and irreversibly, no censorship, more people will use Bitcoin network more than bank wires to transfer their funds.

There will be people who trust Bitcoin, trust banks only and there will be people who trust both, use both. Central banks, commercial banks, Bitcoin will continue to serve human societies and none of them will disappear or die.

I think the UK government strengthened the rules because of the FTX incident; this is a lesson learned. We should select some secure exchanges like Coinbase and Bitget.

Indeed their policies have been brutally harsh toward the whole tech sector, definitely backfiring on them with any innovation being pushed elsewhere. Literally just seen the news today that even Apple and Meta will be pulling their services out from UK users (Imessage and Whatsapp) potentially. Hopefully we don't see the same with whatever crypto companies are left, really only Binance and Bitget left that I know still accept direct deposit from my banks here. Maybe crypto.com but not hundred percent sure about that one. Hopefully were moving in the right direction with the new stable coin regulations receiving Royal Assent.

The FTX incident likely raised concerns about security and regulation. It’s crucial for users to prioritize safety and use reputable exchanges like Bitget.

Safety should always be a priority when dealing with cryptocurrencies. By choosing secure exchanges, we can protect our assets and contribute to the overall stability of the crypto market.

Banks will always used any opportunities they have to discourage people's from investing in cryptocurency because when people invest in cryptocurrency it takes money from their hands. People no longer trust banks because they're no longer leaving their money in banks.

People are now investing in cryptocurrency and the banks sees this as a threat to their business so they'll use every opportunity to attack those people doing this which is why they're closing their banks accounts. Both the banks and the government don't like cryptocurrency.

They'll protect their fellow banks when they have financial problem and look for ways to make people to keep trusting banks because it benefits their businesses but when it's cryptocurency they act like all cryptocurency are bad like the ones that collapse, it's just the nature.

In the future, I think the UK gov should be cautious. We should be embracing Web3, like Hong Kong did, licensing the CEX, and updating the regulations. Change is inevitable.

This action by the UK government just proves this saying right " you can't approve that which you can't control". It shouldn't surprise you that such an act is from them because they'd be the losers if such happens and bitcoin can't thrive there due to regulation, fear and greed . Imagine that with a population of over 67.62m individuals in the UK, just 5% own crypto but imagine if that percentage goes higher, it would become a threat to them hence the brutal, strident rules placed on them.

What amuses me though is the sorry excuse given for their actions and that being the FTX saga but to think that people are willing to turn a blind eye to the faults of traditional financial institutions and point accusing fingers at Bitcoin and crytocurrencies just goes to prove how ignorant they are.

Yes, Bitget also disclosed their protection funds just like Binance.

Banks have been both openly and subversively attacking Bitcoin since Bitcoin waged a war against them at the time of its inception. Banks have tried to call it a scam, a pyramid, a vehicle for criminals, a ponzi and much more. Now words are not enough, so they are using their power to try and limit its usage by the people. This is nothing new and as always, it won't stop Bitcoin. If one can think outside of the box and is not already too restricted, one can bypass unfair regulations imposed on the ability to own Bitcoin.


This is plain criminal if this is true. The only rationale behind it would be their own liquidity issues which they now have to make up for. This is the same as a casino using KYC and terms/conditions to take balances from players when they are facing liquidity issues.

Actions like this is exactly why we need Bitcoin. One day people will get the message with harsh banking regulations, they will stop trusting banks and start finding their way to Bitcoin.

UK government is pathetic and their own people know this frankly speaking op. I wasn't aware of these developments, but I am not really surprised to hear about them. They are complete trash who don't really care about commoners.

Countries like El Salvador are way better in comparison even though their criminal rate is pretty high and it's a small economic nation in comparison.

You are right, why should we trust banks? Banks have opposed the growth of the crypto industry for years because they want to control money in every country.

The untrustworthiness of banks has caused the crypto industry to grow faster. There are many reasons for this, but this is one of the main reasons why banks see crypto as a competitor. People don't trust the bank. That's why banks don't like crypto. We can say this with a simple thought.

How many banks have ever gone bankrupt and victimized people. Which government tried to prevent that? They are ruthless against the crypto industry but they don't see the mistakes of the banks. And as you said, they treat all cryptos the same, citing an example of an event that was bad.

It's unfortunate that such incidents can impact the industry's reputation. Choosing trustworthy exchanges is a responsible decision that can protect users from potential risks.

Can't you see? They know what's best for you and where you should be sending your money, or not.
What you should be asking yourself (and them) is: whose money is it? Is it mine, or is it the banks? Because when I have a house and I decide to paint it blue, I can do it without asking anyone. If I have a car and I want to drive it until the engine blows, I can do it. I own this money, but I can't spend it on the things I want?

Absolutely! Embracing Web3 and updating regulations would be a smart move for the UK to stay competitive in the global crypto landscape. Hong Kong's approach could serve as a valuable example

If you understand what cryptocurrency is (in decentralised manner) then its very easy to understand why government and Banks are not in favour of this new financial system. There is not much resistance for centralised system since they can easily manipulated and controlled. The government opposition to cryptocurrency wont be reduced in near future rather it will be more intense in coming days. Move your crypto assets to wallet if you don't want any government censorship.

To be told, there's no way the issue like FTX, Terra, etc will happen that won't do some damage to cryptocurrency's reputation because it will always open doors for anti-crypto people to somehow force some government organizations into creating some rules and regulations that will make things hard for genuine cryptocurrency investors and this exact what happened here.

Hong Kong's licensing of CEX and embracing Web3 has shown positive outcomes. It's time for the UK to take a similar path and create a supportive environment for crypto businesses.

Well, whether we like it or not, I think Web3 and DeFi technologies are either THE future of finance or part of it, for sure. So not only UK, but the rest of the countries should take proactive steps to prep and embrace it. This could attract blockchain startups to its shores and build the local economy.

If they haven't blocked that exchange yet, it doesn't mean it's because of its reputation, but because it's too small for them to worry about.

I see only 3 ways for smaller exchanges under this jurisdiction.

1. They keep being small and working under the radar
2. They agree to surveillance, KYC, everything and apply for paid licenses basically letting the government track every transaction that goes through.
3. They keep growing and once they become big enough, get ready to pack their bags and flee before the agencies can raid them and shut them down.