Bitcoin Forum

Why do the people still use unlicensed exchangers like Kraken, Xapo, BTC-e, Okcoin, BTC China, Bitfinex and many others? All of them are out law and they can be closed anytime and your money lost...

This is only the most recent example but there are so many like: http://www.coindesk.com/men-plead-guilty-running-unlicensed-bitcoin-exchange/

closed by who? if it's not by their local jurisdiction, they cannot be closed by america if you think so, they are out of the law of america

All the countries have laws regarding to financial transactions and they require a financial license for the Bitcoin exchangers. It doesn't matter if you are in USA or China.

If Bitcoin isn't defined as money in their country, exactly why would they need such a license? Bitcoin is still in the 'grey zone' for a lot of places.

how about coin?does the coin must have license too or it will be closed ,.lol

it's not about Bitcoin. It's about that an exchanger is doing financial transactions. They are receiving money from customers for doing a FINANCIAL service. You need license  for a such thing in all the countries. There is NO grey zone.

Example: you need a financial license to trade gold even it's virtual gold. Gold is not money... :)

"In their country" where? Kraken is based in USA and USA requests license. Okcoin, BTC China are based in Singapore and China which are requesting financial licenses for that, Bitfinex is based in Hong Kong and they claim to be registered in  British Virgin Islands which requires a financial license for these kind of services.... :)

First of all, the article is about two individuals who are light weights ($10k in undeclared cash over 3 years).

These two people most likely used something like Localbitcoins to facilitate their trades,
and if that is true, then this story is not comparable to the above listed "unlicensed exchangers"
who are doing $100k+ in transactions/profits/fees per day within their own dedicated site.

Second, the term "unlicensed exchange" only applies in jurisdictions in which there are regulations.
Those jurisdictions are actually very few and being licensed or not does not assure your bitcoins are safe.

Third, Mayax is a known supporter of world regulation over bitcoin and constantly argues for principals that are anti-bitcoin.

Let's see :

https://www.cryptocoinsnews.com/coin-mx-bitcoin-exchange-operators-arrested/
http://www.wired.com/2015/01/bitcoin-exchange-operator-sentenced-4-years-silk-road-transactions

These are not from Localbitcoins. :)

"unlicensed exchange" only applies in jurisdictions in which there are regulations. CORRECT. All the countries have regulations regarding to that. It doesn't have to be something special for Bitcoin. Bitcoin is considered a virtual currency/e-currency and there are strict laws toward to this. Why do you think Circle got license in EU after USA ? Do you think they don't care about the money they spent for that? I assure you it was 500-700K Euros. :)   Good pocket money, right? But they spent it for a...license. Why? :)

USA, UE(and not only), China/HK, Australia, Canada, etc. All have laws for e-currency exchangers (even BVI, Belize, Bahamas).

Both links you provided do not argue what was your original argument.
Both of those links include willful conspiracy to syndicate criminal activity or willful conspiracy toward drug/weapon sales.
This is like apples to oranges. Because an exchange is licensed or not, does not prevent this from happening.


Please provide links to all laws and regulations that you are relying upon for each country you have listed.

Are you aware that in the United States, it is each state's right to self define money transmission,
and as such, some of those States have determined that bitcoin is not money?

Each is facing up to ten years in prison if convicted, on a single charge of operating an unlicensed money transfer business and conspiracy thereof (two separate charges).

It's about drugs too BUT there were charged for  unlicensed money transfer business and conspiracy also.

Bitcoin is NOT money but it's e-currency and there is a law in USA regarding to that. I recommend you to read about that with patience :)

https://www.cryptocoinsnews.com/fincen-clarifies-virtual-currency-payment-systems-trading-platforms-money-transmitters/


https://www.fincen.gov/news_room/rp/rulings/pdf/FIN-2015-R001.pdf

http://www.dfi.wa.gov/bitcoin

sometimes i think lauda needs to step outside of the box and see the whole ecosystem.

if they are touching FIAT.. like doing bank deposits. then they need licences of the type of currency they are accepting.

EG
if it were the american dollar.. then they need american licence.
if its were a euro then they need a european licence

if however they are just swapping bitcoin for altcoins(no fiat at all). then and only then do they not need a licence.

The first link does not provide law or regulations. In fact, they are requesting
interpretation of laws. That doesn't mean anything until a finding and entering of law.

The second link does not provide laws or regulation to bitcoin. In fact,
it is about brokerages that sell precious metals for any funds.

The third link only applies to Washington state. As I said, each state may
define money transmission any way they wish. It is interesting to note that there
are no laws that actually define money to include bitcoin within these pages. The state
has rolled bitcoin into the current law, even though the definition is well defined and
only include government approved currency.
So simply, they got lazy and instead of adding to the law by ratification,
they re-interpreted the law to go around legislation.
This is not final law and can be overturned.

The links provided does not prove that bitcoin laws are fully defined world wide and
whether people or exchanges are in compliance or are not in compliance.

Hope you didn't get your $10k from "Further, the Lords allegedly failed to report cash receipts in excess of $10,000."
Over 10k simply means that they failed to report transactions over $10k, a failure to comply with AML reporting regulations. On top of running an exchange & pushing Xanax like a bunch of high school kids.

the guidance is for the LAW in cause to understand it better : https://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

If you accept cash in person, AML in does not apply. AML has to do with bank deposits with a single purchase.

its a little more complicated then that.

try having more then$10k in a suitcase when you go to an airport or at a border check.

but the whole bank deposit thing is mainly due to the ease of noticing and finding people doing it. not so much a difference of the law. just the survellance capabilities

in short if ur accepting and giving out large amounts of FIAT as part of a business that swaps fiat for other things. then expect to have to explain yourself
it does not matter if its for legit purposes or not. it does not matter if its a bankers cheque or a bank note or a wire transfer the law is the same.

the only difference is the level of surveillance needed to find out who moved what to where, and for what reason.

so if you dont want the headaches, dont touch fiat.

this may be not true for crypto currency and probably it's not true by an amount limit, maybe those exchange are moving a low amount of money and they are not require any licence?

also are you sure that in all countries you need a licence for money trasmitting?

Please see footnote 1 of the bottom of your link page:

And see:



So, currently, this is not laws. In fact, they say it is not law and is a reinterpretation of the known laws,
in order to place crypt-currencies within their governance (without legislative approval).

In theory, FinCENs "guidance" can not be used as anything official or definitive in a court of law or before congress.

I don't think these things work the way you think in a lot of places. For example, for withdrawing money in a country where Bitcoin is in the grey area I don't have to pay any kind of tax.

I need to have a license to trade my FarmVille coins?  ::)

good point and true.

if the exchangers will not touch fiat then they will have almost no business. :)   the point is that they do not want to play "fair" and to get the financial license required by the country where they are registered.

once licensed, they have to respect strict rules, they cannot disappear overnight. it's so funny. they want to be treated like serious businesses, like shit corporations but when it's about regulations, they run :)

regulation is bad, because it restrict too much the usage of the exchange, i can bet my ass that with restriction they would earn less on fee, and would have less user using their service

also it is guaranteed that regulation is done only so the government can have its cut from the revenue...the biggest scammer is always the government as usual

yes but all the States from America are following what FINCEN is saying(guidance). do a search for unlicensed Bitcoin money transmitter:

https://bitcoinmagazine.com/articles/mtgoxs-dwolla-account-seized-1368760437

https://coincenter.org/2015/04/what-is-money-transmission-and-why-does-it-matter/

The laws are very clear. You didn;t answer why Circle got a EU financial license after they financial licenses in all US? :)  They don't care about money, right?They wanted to throw them away for some useless
papers. :)

NO, they want to make serious business and they want to wake up on their pillow not in a jail :)

No, each State may, at their discretion, decide to go against FinCEN Guidance,
if they wish to or if their legislators say bitcoin isn't money.
It is up to each state. It is not a universal federal law, yet.

Your circle question is irrelevant. Do you have proof that Circle has licenses in each
of the states that they do business in, within the United States? There is no universal license.

Circle is a bad exchange to use as an example since they would sell out their
mother to the devil if they could get a single cent. They see bitcoin as a whore to slap around.
They are backed and financed by those who wish to regulate and destroy bitcoin.

did you think bitcoin have licensed?i'm sure we all here knowing about risk,about losing money,about hacked,we all understand about that,and why we still use that exchange?the answer is,because we love to take a risk,bitcoin is full of risk ;)

Lol, so that is how you got your "$10k in undeclared cash over 3 years'?
Let me help you out a bit with your interweb lawyerin'.
They pleaded guilty to running an unlicensed exchange. As an exchange, they're obligated to report such transactions. They didn't, so got nailed for that too. That's why the article says "Further, the Lords allegedly failed to report cash receipts in excess of $10,000."

"regulation" is under the pretense of consumer protection. yet 95% of the time its the business itself that has to investigate the customer and report to regulators, rather than the other way round, meaning the business only has the info the customer provides and requires the business to pay out to credit agencies and other reporting agencies to get a move better overview of the customers. (making regulators near useless 95% of the time)

there are 2 mindsets to have.
1 is that the large licence fee is a barrier to entry for new startup's.. the flipside is do you really want basement dwellers (boiler room corps) to be handling lots of customers FIAT funds without themselves having reserves/insurance to look after said customers funds.

Franky just so you know, according to the FinCEN docs that Mayax are providing, if you interpret them as he is,
then bitcoin for altcoin buy/sells or vice versa also requires a money transmission license.


So, if they wanted to argue it, they could interpret it to say things like Poloniex or Shapeshift are also money transmitters.

shapeshift does not touch the dollar.. nor is it even based in USA. this american law does not apply to shapeshift.

though poloniex does not touch fiat, it however does 'reside' in USA so they would need some legal clarification.
however. "virtual currencies" as noted in your documents are electronic forms of fiat. the laws around blockchain currencies are still not defined.
these virtual currencies are what paypal, western union use(USD) and so defining if blockchain currencies are in that remit, still is a grey area.

but overall i can easily see poloniex being on a possible US hitlist.  

but if you were to try to think that a MSB was just someone that transmitted any type of currency of value (bitcoin included) then every bitcoin user would need a licence.

im sorry but in prison the inmates do not need a MSB licence for trading cigarettes (their currency of value)
im sorry but in a relationship, women do not need a MSB licence for trading sexual favours (their currency) for getting their spouses to do things around the house.
im sorry but businesses do not need a MSB licence for trading fiat for their staffs labour. as time is a thing of value too.

a good lawyer could rip apart the argument of what is a virtual currency, what is a money substitute etc.

remember.. a paypal USD is not the same as a bank note or a dollar metal coin (you cannot pay a court fine using paypal)

1BTC does not act as a substitute for dollar. there is nothing to prove that 1btc is 1 dollar or that bitcoin should be treated as only being used as a substitute for a dollar. (think of it as if bitcoin was a starbucks coffee.. changing value every year and measured in different vale and different international currencies).
bitcoin is a currency, but not money. its an asset currency basically



so its still not clear. however its best to be cautious

Ya brah, if the government can only articulate that they didn't declare cash in excess of $10k, then they are light weights.
Normally the government will provide an estimate of how much in cash they brought in for 3 years.
It is possible, that in the filed complaint, there are actual cash estimated for the 3 years.
The fact that the article doesn't say what those numbers are, make me think the government doesn't know,
so they through that count in for good measure. Bro-tator.

Yes I mostly agree with you. I'm just pointing out that the interpretation of guidance or certain regulations
still contain gray areas that we assume or believe incorrectly to be true or false, and ultimately one
day need specific laws on the books so that people can clearly understand where they officially stand.

You should'a sold your pro lawyerin' to that pair of financial moguls, maybe they wouldn't "have plead guilty to running an unlicensed bitcoin exchange"  & pushin' Xanax :)

what is many others?is coinbase include on your list?honestly i dont use all that exchange mentioned by you,i just use my trusted exchange and wallet,coinbase.

Why not? It depends on the country where your at if it is legal or not. Just do not hold your money there.

I think it's just those ones, Coinbase seems to be aiming to be the most "legitimate" exchange in the eyes of the law.

If they were legitimately selling prescription drugs while selling btc, then they are probably morons.
It may even be possible they they were actually drug dealers, who were just using bitcoin for payments,
and thus the government tacked on "unlicensed exchange" as well. I would need to see the complaint to
know what the case is actually about.

But ultimately, they are guilty of being an unlicensed money transmitter if their state defines them as that.

My only argument throughout this thread is that not all jurisdictions are the same. Unlike some people think.
In theory, if these two people sold btc within a friendly state, they would be free men right now.

Yes, are under this law. They are saying:  "We are a US-based cryptocurrency exchange". More than that, USA reserves the right to go after any company who is doing businesses with US citizens if they don't have financial license in US. See the  example with Mtgox and Dwolla. US gov seized the Mt gox funds from Dwolla even MT Gox was registered in Japan because MtGox was doing exchanges with US citizens.
 Yes, this is the law :)

Paypal is a payment service provider based on real currency while the exchangers are virtual currency exchanges. Both of these businesses follow to the same MSB law. Virtual money is a commodity(like gold) and you need a financial license to make transactions between fiat and ANY e-currency (like Bitcoin).

Where these just folks on LocalBitcoin trading BTC peer to peer?!

That'd be fucking nuts if you need some lic bullshit just to do peer to peer trades on LocalBitcoin... the USA is going bat shit crazy.

How could anyone support that? (OP)

A Louisiana man and his son have plead guilty to running an unlicensed bitcoin exchange. So, Louisiana requires a financial license for Bitcoin

Please read these :  

http://www.nola.com/politics/index.ssf/2014/01/louisiana_bitcoin.html

https://bitcoinmagazine.com/articles/mtgoxs-dwolla-account-seized-1368760437  :)

Also, please name one State that doesn't require a license for bitcoin(e-currency) exchanges.

Sure. If you're a Somali exchange, you don't have to follow US law. But you do have to be licensed in US to do business with US nationals.
No different from being a licensed Somali doctor. You can write Addy scripts to your Somali patients, but not in US. Gotta be US-licensed to write for US nationals on US soil.
TL;DR: being legal somewhere != being legal in US :)

This is exactly my point ! :) It's so true!  You do have to be MSB licensed in US to do exchanges with US nationals.

Just got off the phone with Jay from Arkansas Securities Department in regards to selling my personal Bitcoins peer to peer using LocalBitcoins or friend to friend.

The guy I spoke to said it would be totally fine to sell my Bitcoins to individuals as long as:

1.  I wasn't brokering deals between individuals.  AKA Party A uses me to link up with Party B.  This can be using a site or doing it manually.

2.  I wasn't selling Bitcoins marketed as an investment tool.

That's what I expected and it makes sense.

Each state is currently working on, has finished, or has not even started to address
the issues discussed in this thread. If they have not addressed it yet, it is considered "OK".

To answer your question, according to my understanding from last year,
Texas does not consider bitcoin to be money, so thus it can not be money transmission.

I do not know if that still stands though.

Now, ask yourself if, for example , Kraken follows under point 1 or point 2. They accept clients from Arkansas  :)

That's what an exchange does. If you're not doing that, you're not running an exchange :)

because of DOLLAR deposits..

no.. now your trying to redefine virtual currency..
gold is not a virtual currency. its a commodity. and has separate laws.
pawn brokers for instance follow 13 different federal laws. rather then being MSB

gold is not a direct substitute for dollars.
apples and pears are not a direct substitute for dollars.
cars are not a direct substitute for dollars.
jewelry and antiques are not a direct substitute for dollars
a euro is actually not a direct substitute for dollars. thats why american MSB does not apply to foreign currency that never touches the dollar

but a paypal "dollar" is not a real FIAT dollar. its just a mysql database balance to substitute a real dollar held in a real bank account in another location.
credit cards are not real dollars either.. they are credit. that is then separately settled with real dollars in a bank account..

as i said you cannot use paypal to pay court fines or other 'legal tender' tasks. even though its a direct substitute. but not the exact same thing.

even stuff like IRS and courts dont like you using credit cards to pay off fines. it normally has to be a debit card or physical cash.

but with all that said it just reveals how lacking the terminology is that it can be left open to many interpretations. and any good lawyer can rip apart the fallacy that bitcoin is 'money'.. because its not.. 'money' is the fiat world stuff.. currency can be anything. and bitcoin is an asset currency.

right but if you do that, you have to respect the rules. how many exchangers are respecting them? :)

Bitcoin is not regulated by any country, so I think those exchangers won't be close by any government on any country. Maybe they can ban the site from their country, but they can't stop it to be used on every country around the world.

what does have Bitcoin with the exchangers? Bitcoin cannot be regulated but the exchangers can be. The exchangers are doing financial transactions and they are under the financial laws. That means they MUST have license. once an exchanger is financial licensed, it can perform many other kind of transactions not only those involving BTC.

BTC is an e-currency and nothing more. The exchangers are companies and the companies can be and are regulated by the countries where they are registered. Example : Bitfinex is registered in BVI and BVI requires a such license in order to make FX trades and financial transaction in and out an e-currency. Bitfinex is outlaw as most of other exchangers are(see: BTC China, Huobi, LakeBTC, BTC-e, Bitstamp, Kraken, etc)

This license is not only for them is for their clients too. Once you are regulated, you cannot disappear overnight like MANY exchanger did. The funds are audited, it's hard to make tricks.

I am going to make a bank. I put a website with everything(internet banking, etc) but I am not getting any banking license. It's just an website and maybe I am registering a company in Europe or BVI.

Would you use "my" bank? :). I guess not.   It's the same thing with the exchangers.

Bitcoin is still not regulated as a currency so anyone could open a Bitcoin exchange if they wish and they can't be closed because they aren't doing anything illegal. If Bitcoin is to be regulated then all the exchanges that want to operate in a given country would need to obtain a license from the government.

I see the problem here, and I think you're right about this. The license is important for the customer to make sure that the site is can be trusted, right?

it suppose to be. but these days the conditions of a licence is less about consumer protection and more about barrier to entry.
positives(1):
you need a team of people to ensure compliance
negatives(1):
they are not cheap to employ these specialists
positive(1):
they are specialists
negative(1):
these specialists went to college and have a certificate, but can still be corrupt a-holes

positives(2):
you need to report everything to regulators
negatives(2):
you pay them, while you are the one doing all the hard work
positives(2):
they ensure losses if your hard work results in a genuine loss
negatives(2):
they do all they can to find holes in your paperwork to not pay out

positives(3):
customers have someone to complain to if things go wrong
positives/negatives(3):
customers still have someone to complain to if things go wrong even more so when they dont have a licence. as the regulators can slam the company even harder
negatives(3):
competitors use their relationship with regulators to slam the competition, monopolizing the market.

no matter if its a licenced or unlicenced exchange.. the customer itself can still go through many avenues to attempt to get recompense.
even licenced exchanges can just disapear (check out cryptsy) without having to make their customers whole

summary:
the whole purpose of licencing needs to change it needs to be 95% consumer protection 5%barrier to entry(prevent scammers starting up boiler rooms)
rather than the current feel of a licence, which is 95% barrier to entry and 5% consumer protection.

Most people that are in the know don't care about that, because most people in crypto that know what they are doing buy whatever coin a they want to buy and instantly send the coins to their local wallets. No one should store their coins in exchanges licensed or not.

don't you want new people to use Bitcoin? how can you convince a normal person to use it? in order to use Bitcoin, you need an exchanger. What do you recommend him/her? BTC-e? BTC China?, OKcoin? The normal people wants to be sure that they sent the money to a real company. I give this example because BTC-e is one of the "biggest", they claimed to be registered in Cyprus(an EU country) which requires a financial license for their activity. BTC-e doesn't have one.  Strage, right? :)

BTC cannot go mainstream if the rules are not respected. BTC is assimilated with black market, hackers, drugs, etc just because the exchangers allow these categories to use their services.
Once you are licensed, it's much harder. You, as company have responsibilities. You have make a proper due diligence, you have to be sure that the money you receive are clean and so on. Look to Coinbase or Circle or Itbit who are licensed. It's not easy when you are licensed. You have to comply with a lot of things and to pay MANY others....that's why they want to change the Bitcoin... because they will go bankrupt if new people will not start using BTC.

Also, if you want to be taken as a serious company, to talk with banks(you need them and it's impossible to run an exchanger without them), you have to be licensed. Otherwise, you will change the bank account very often and you cannot develop your biz properly.

that's good,anyone can build exchange,and nothing illegal or legal exchange,just like kraken or others,they invest in big investement,and its long term.
lets wait until bitcoin regulated by goverment,so legal exchange will appear.

For me the main reason of using "Unlicensed Exchangers" because of they are unlicensed therefore on some level free from banksters and govt thieves. OK, normal thieves are also annoying but at least they aren't paid from my tax for stealing my money :).

you must use the banks in the most important steps : funding and withdrawals :)

Only a statist could care about that stuff.

I got confirmation that the "exchange" from the OP was actually a LocalBitcoin trader...

https://localbitcoins.com/accounts/profile/Internet151/

I guess they were brokering deals... or maybe the FEDS can just charge any Bitcoiner they want who sells coins peer to peer at a flick of the switch.

Why do you trust stinky government and their license?
Some exchanges have been around for a long time and they may go down some day, but this has been okay for a long time. They probably will not open office is USA, hence they will never need a license.

a financial license is required anywhere, in any country. ALL the countries have laws for what the exchangers are doing. it doesn't matter if it's USA, Europe, Australia or China... All of them require financial license. :)

Bitcoin cannot be regulated because there is no central power or it's not revealed at least and that's why only the exchange business IS regulated. The question is: why the exchangers do not respect the law and why do people use these services knowing there is a huge risk?

Irrelevant for people who are smart enough to keep bitcoins in their own wallet, preferably offline like on a memory card. I only use an exchange when I want to sell BTC for currency. I do not regard them as a bank nor should anyone else. I don't even regard banks as banks.

It's up to the individual to make smart decisions about where to store their bitcoins...but in reality, you are not safer with your money in a bank account for the simple reason that all legitimate banks must and will comply with government/law enforcement...so things like asset seizure abuse are rampant all over America and even moreso in other countries.

i don't live in USA :)

BTC won't have any success because the normal people are not and won't be tech savvy to use a memory card in order to keep the money on it...

Yes, if you think BTC is a very small niche which it is, then it's alright. It will be only used by computer geeks :)

If the exchangers won't be licensed, they will be closed and the owners will go to jail and the trust in BTC wil go away day by day.
The regulation as it is(good or bad) it brings trust. That's it.

Why do you assume that all laws, especially those that deal with money, are fair and just? Are the laws passed for the public benefit, as they should be, or are they merely bits of cronyism that enable those who are wealthy to hold onto their wealth while those who are less fortunate have to slog through a jungle of red tape to elevate themselves financially?

The SEC, finra, central bank in the USA mainly exist to ensure that the financial sector exists, remains "too big to fail" and keeps capital out of the hands of most people. The passage of dodd-frank underscored how corrupt the entire financial system really is.

That law, in combination with the 3 rounds of QE and a ZIRP have inflated equities sky-high creating the false sense of economic progress where there has only been stagnation. Add to that the shady process of corporate stock buybacks and the table is set for something very unpleasant to happen in the near future.

Bitcoins are not a huge risk; you sell them when you need cash and that's it. Nobody can touch them as long as you keep them offline.

yes, bitcoin is a risk for the average people who can be hacked very, very easily. Even you are not a computer noob, you can be hacked. See 1000's exchangers who were hacked. Almost all of them :)

so, BTC is a risk as any other anonymous e-currency.

A lot of things come and go. Right now there is a situation where you obtain BTC in some way and sell it for USD or another currency. It doesn't need to last forever, or even for a few decades. You have opportunities coming and going all the time.

Regulation does not bring trust; regulation creates barriers and impedes natural improvement, stifles competition and does not help anything. You place "trust" in regulations created at the behest of politicians that lied, cheated and stole to get elected...you haven't given this much thought, have you?

Show me one example where a previously unregulated opportunity got better after government regulation was introduced.

an unregulated financial industry will bring chaos but for you it's OK because you are a...libertarian? :)

ok, you don't like the rules, the laws and so on...it's alright. go and live on your own without phone, bank account, TV, internet because the "govs" are everywhere. :)

you were born in a world with rules, a doctor help you to come in this world and that doctor was paid with legal tender(money) not with ..BTC.

it's a useless discussion. the point is that all the unlicensed exchangers must be avoided if you care about your money.

And how will "regulation" change this? Credit cards are heavily regulated; credit card fraud never happen, right? Oh, wait, it happens all the time.

There are stiff penalties for committing identity theft. Good thing those laws and regulations exist to prevent it...oh...wait...there is a thriving black market where stolen identities are bought and sold daily, and it's growing not shrinking.

What's you're point? If you are not careful, someone can steal your bitcoins just like the same thing could happen with anything else. You're trying to suggest that bitcoins should be regulated, as if doing so would have any effect? It wouldn't.

Yes, credit card/debit cards frauds are often BUT you get the funds back. ALL of them! Get the funds back after your BTC account is hacked. Tell that to all the people who lost fortunes because they didn't "take care".
You can be hacked with all the anti malware, antivirus from this planet.

I suggest that all the exchangers MUST get a financial license because these are the laws and because it's for the clients protection to use a regulated financial company.  If you run a forex company, you are forced to pay a lot of money, to pay taxes, salaries, etc. If you run a normal financial company, you have to do the same.  Other are "stupids" because they comply, the BTC exchangers are smart guys, right? :)

A lot of exchangers ran overnight. You cannot do that if you are regulated or you can but MUCH, MUCH harder and you can easily go to jail....because the everybody knows who you are.

Without regulation there won't be a "financial industry" and that is precisely the idea. The existence of a financial industry is a parasite to all the people from whom it leeches from to sustain itself.

Sure, governments are "everywhere" which is exactly why big, bloated government bureaucracies are the problem not the solution.

Give us some specific examples of this "chaos". Go ahead and explain why we need more regulations on top of common-sense laws that make fraud and theft crimes. Why should there be a regulation that says if I want to sell notes, I can only sell them to "accredited investors" (according to SEC regulation) or else I would need to register the notes with the SEC and spend $20K or more on legal fees to be "compliant".

Those regulations are not helping anyone other than the financial industry, which shouldn't even exist in the first place.

ok. you are a "dreamer". I won't argue with you anymore. The people are using BTC for PURE profit, to take advantage, to speculate and not for dreaming :)

you are talking about other "World"... :)

Not true. Victims of identity theft and even some credit card fraud do lose the money, and if their accounts are emptied out via wire transfers or something of that sort, you'll probably have to involve a lawyer to assist you in dealing with the bank if you hope to recover any of it...but the legal fees will often be more than what was lost when all was said and done.

It's not that hard to keep a bitcoin wallet on a memory card...and no, we are not introducing regulations as a "nanny" to those who are too ignorant or careless to protect themselves. It's not OUR responsibility to protect YOUR BTC wallet, comrade. Go back to the polit bureau and tell them nyet.

This doesn't even make any sense. Speculating and profiting are not crimes or forms of fraud. They are legitimate activities, and even though I personally dislike speculators, I would not advocate for any law or regulation to make what they do illegal so long as the playing field is level.

In the US stock market, "professional" speculators have an unfair advantage over retail speculators due to execution time and discrepancies in market maker prices. This is how HFT traders rip off the market...but what they're doing isn't speculation so much as it is sniping transactions in a way that not all traders can do.

OP here is using the term unlicensed liberally. The article describes a very small scale operation that was completely unregistered while most exchanges in mentioned in the OP are registered as companies.

I am talking about financial license which is mandatory for each BTC exchanger. It doesn't matter where their company is registered/located.  All the countries have laws who require a "supervision" of this activity when it's about of receiving funds from sending funds to clients.

 A company is relative simple to register. It's not about that :)

and just bitstamp who has licensed in luxombourg. but i think people dont care with unlicensed exchange,they just use exchange for trade,and not keep their asset on there.

Bitstamp took the cheapest license and this allows them only to deal in....Luxombourg. This license cannot be passported to other EU states. :). It's a dust in the eyes for people BUT Bistamp is regulated now. They will pay taxes, they will report the transactions, they will comply with many other rules(at least on paper) :)

According to the share market, BTC-e is much bigger than Bitstamp but not nobody knows who they really are. :)

https://bitcoinity.org/markets/list

http://bitcoincharts.com/charts/volumepie/

Mate when I read the news yesterday it was said that this license from Luxembourg will include all the member states of the European Union so that makes it eligible in 28 countries. Here is a link to a Forbes article that confirms it again: http://www.forbes.com/sites/laurashin/2016/04/25/7886/#2a2f7776518d
Why do you think Bitstamp license can't be 'passported' to other countries? Are you from Europe mayax?

XAPO also in the list  ??? ??? ??? ::) ::) ::)

I thought XAPO was trusted wallet ?
Please advice

there are only 4 licensed exchangers in USA. USA is well known as a country who enforce the financial laws pretty well.

Licensed exchangers in USA : Coinbase, Circle, Itbit(for New York only) and Gemini(NY only) . The rest of the US exchangers are OUTLAW (XAPO  is one of them) and they can be shut down anytime as it already happened to many...

Xapo is not only a...wallet. You can buy BTC from them, they have debit cards as well. That means it is required a money transmitter license.

Example: http://www.coindesk.com/bitcoin-firm-xapo-cuts-north-carolina-access

Also, Xapo is lying like a shit "Xapo has officially relocated its corporate headquarters to Zurich, Switzerland," (May 2015)  while on their website is saying:

"HEADQUARTERS: Xapo is incorporated in Hong Kong , has an office in Palo Alto, California and operates Worldwide" and MORE in their TERMS "https://xapo.com/terms/" :

"If you are using our Services in the United States, you are engaging not with Xapo Limited but with Xapo, Inc., a Delaware corporation"   :)

However, they are not licensed ANYWHERE.

Oh my god..Thanks for informing that XAPO is not trusted.

i will remove my funds now from there

Because Freedom.

Remain anomymous, anything goes, pump as you please and none shall interfere.

I personally prefer the unregulated exchanges to the regulated ones....but the compliant exchanges have all the volume now because pussies like you are too scared to live in the 2012 world of Bitcoin, which was an Anarcho-Capitalist paradise

believe me, in the end, there is no difference between them, the only one difference is that "word", regulated, the rest is the same, they will scam you if needed, but with only one difference, the regulated one, will scam you using the law, so if people feel more comfortable with it... :P
this is another good example about why decentralized exchanges should be used...

Really? most people here on the forum use and share that Xapo is one of the best of the best ?

By the way when they will scam ?
they havent scam till now ?

You never know when they can do fraud.. ???

From my experiences with Poloniex....I RELATIVELY but ultimately concur good sir

then go and use an unlicensed bank too. you can find many websites stating that they are a bank even they are not. deposit your money with them because i saw many positive review about some unlicensed banks...:)

this is for all the "anarchist" lovers. Go and use an unlicensed bank or banks from Somalia, Tanzania, Gabon, Sudan to keep your privacy...Why do you keep your money in local LICENSED in Insured banks?  :)

The important question to ask is "licence for what type of activity should the exchanges be getting ?"

Bitstamp is in the news today for getting a payment institution licence in Luxembourg.
Is Bitstamp a payment institution ?
Isn't it rather like somebody saying they can fly the plane, because they have a driving licence ?

I prefer the GOX days to now to be perfectly honest

thats a pretty interesting point of view to be honest, as that exchange turned to a huge scam that has stolen a lot of people money that were never returned, im wondering why do you prefer it

i dont see anything fwrong with the unlicensed exchanges because in my opinion everyone has the right to buy and sell their bitcoins without any limitations or licences

While it's true that there's a lot of uncertanty regarding the unregulated exchanges, i still dont think that a licenced one is any safer.
Due to nature of bitcoin, i dont see how licenced exchange would be any safer than unlicenced one. Once the funds are moved/stolen/watever - there's
no law or regulation that are going to bring them back to users.

correct but without using fiat or banks because fiat is regulated and the banks as well. once you want to deal with them, you have to respect the existing laws. right? :)

Yes, thats exactly what i want to say, btw, unlicensed exchanges are changing his minds (in last days)  so maybe our best choise, as i already say, is to move to decentralized one, which fits perfectly with bitcoin soul ;)



and they are not the only want who will do it...

I use exchanges that don't require me to be verified. But then I don't usually trade more than 10k USD at a time.

Same as me. I don't like KYC policy and ID collecting by companies when it is perfectly fine to transfer BTC without any of my personal info given.
I feel uneasy when I am asked to release my personal information to some unknown service which can be selling my info tomorrow.

Ok coin has over 90% exchange distribution, while CNY is the main currency on china. Youalso cannot accpet china exchanges

you can do that but do not complain on forums if an exchanger will steal your funds :)

...

Some of the brightest people on the planet are computer scientists or programmers.  (I am not.)

At some point a team of these very bright people may come up with a way to stay hidden (or beyond the touch of the LAW), set up an exchange with good service and not rip-off people.  I do not know how that will be done, but my guess is that it will.

An example (though not attracting as much attention as an exchange would) is bitmixer.  They have been a reputable service for years yet they keep on serving their customers excellently.

They don't require me to be verified, but they are licensed by the financial thingy in their country. So, they probably verify me through my deposit method or something. Doesn't matter. The coins disappear once I've bought them.

Well, why do you trust theymos? He's unlicensed. What about all the sellers on localbitcoins? They're unlicensed too.

Having a license doesn't mean you're trustworthy. Look at how many banks go insolvent each year. It's about reputation and trust.

Yeah mate it doesn't matter if the exchange that I am using is licensed or not at all. The most important thing is to handle my orders on time and to have low fees and of course to be honest towards their customers. Everything else is just bureaucracy which doesn't make an entity more trustful just because they have a bunch of documents issued by the government.

especially if those exchange go bankrupt like mtgox shit, and your real info is leaked and probably stolen by someone whose intention are not really legal

This is one case that should make us learn to not saving the money in exchanger even they've licensed because if a company declared bankrupt we can't ask for replacement of the money has lost because of a case.

but you can get some money back if the company is licensed because they put an amount as guarantee when they asked for license. same with the banks. a bank can go bankrupt but you can get back up to 100,000 EURO in Europe. I don't know how much in USA.

also, a licensed exchanger will not have problems with the banks it's using. most of the exchangers are changing the bank accounts often due to this thing. the banks are blocking their accounts because they are not respecting the KYC/ AML. in short, they are outlaws.

also, why don't you use an unlicensed bank and you do prefer to use a licensed local one(preferably near to your house)? :)

bitcoins does not need any licenses.

I think bitcoins need licensed if they are willing to start a business exchanger site so that they can accept banks to use their services or to buy bitcoin using banks..

yes, the exchangers(the companies) need license. it does not matter where they are incorporated.

Regulatory requirements differs from country to country. Saying that exchangers need a license, regardless of their home country is simply not true. Kraken, BTC-e and Bitfinex all operate lawfully within their jurisdiction.

Bitcoin has evolved to a degree where the state is well aware of its existence. If the named high-volume exchanges would be operating illegally (based on current laws), they would have been closed already. Of course, new laws might change the situation.

That said, I want to add that I do not endorse "licensing" Bitcoin at all. In my eyes it's plain old school repression.

ya.ya.yo!

 Kraken is registered in California, USA and they have no license. Do you think they are legal? :) Many unlicensed exchangers from USA are in jail for this thing. Kraken operates in almost all the US without ANY license. Example: they accept clients from Florida and Florida requires a MSB license :)

BTC-e = registered in Cyprus. According to EU, they need a financial license.

Bitfinex= registered in BVI. BVI requires a financial license for their activity. Bitfinex says that they operate from Hong Kong; same as in BVI, HK requires a financial license for Bitcoin exchangers.

Bitcoin cannot be regulated because there is no central power

Is BTC-e really registered in Cyprus? I know the exchange is owned and operated by Russians but if you do a Google search it says that it's a cryptocurrency exchange based in Bulgaria. Where did you find it's registered in Cyprus? Maybe they opted to register in Cyprus because Cyprus has the most lenient trade laws in the EU or something.

According to this old Coindesk article:


http://www.coindesk.com/russian-prosecutors-office-btc-e-investigation-hoax/

BTC-e terms & conditions:

it was never about BTC regulation but about the ones who are the "middle" man(exchangers) between you, as user and BTC as e-currency.

The company is registered in Cyprus but the owners are from Russian and Bulgaria.

I do use some of these :o :o
i'm kinda new in bitcoin world, so where can i see if a exchange is licensed or not? is poloniex trustable?

NO, poloniex is not a financial licesed exchangers and they are based in USA. A country where many exchangers are in jail because of this. :)

Unfortunately, there are not so many regulated exchangers and all of them are USA. It's not good but..that's it. You may use Coinbase, Itbit, Circle, Gemini.

OP.. do you really think the people of this forum view the gov and law in a positive light? We see their oppression.

Good. then why do you go to a gov authority to complain if someone scam you(even with BTC) ? :)

I understand your point and you are right. You choose to be like that BUT be "like that" till the end.

gov and law= bad
BTC = good

Is that correct? If so, why there are so many people complaining about "scams" and some of these want the gov and laws to make justice for them? :)

You can't do anything about it yourself.  

Laws are not bad, our govs are corrupt as all hell though thus corrupt laws.  



What does a license prove?

a license means you respect the law and for that you need to comply with MANY financial procedures. it helps the customers to be protected.
what bank are you using? I bet it's a local licensed bank. :)    why don't you work with an unlicensed bank? there are some on internet.

the answer is simple. because you are afraid that you will lose the money with them. same with the exchangers. you will hardly lose the money with a licensed exchanger. :)

That does not offer me any protect.  What it offers me is a 100% promise my name is now in the exchange and I am at risk.

Nothing..

But it bring a lil bit more trust... a license shows the goverment know about the exchange and if the exchange doesnt follow the rules it will be closed.
I dont think poloniex, for example, isnt reliable just because it doesnt have a license. but would be better if it have.

Unless you are HSBC, UBS, and so on... in that case, you can launder money for US citizens and get away with a fine.

it's not about better or not. it's about legality. Poloniex is from USA and according to US laws, they must have a license in order to operate as exchanger. I repeat, there are many EX exchangers in jail because of that, unlicensed money transmitting . What does mean? That the feds can shut down Poloniex and others like them anytime beacuse they are outlaw.

Result : their clients will lose the funds.

This thing has happened and it will happen shortly. it's just a matter of time.

Kraken is an unlicenced exchange??? I don't think so... They have been trying to legalize their activities for quite some time now. I think that they are already licenced in Europe and Japan.

no, they are not.

also, they are based in USA and they are dealing with US citizens. that means, they MUST have a financial license in each state from USA. they will be shutdown soon. I know it appears almost unbelievable but it will happen if they will not apply for a such license.

Not sure, but if exchange want to trade Cryptocurrencies must have license in accordance with the law of the country in which operate. I don't think that every exchange must have lincese from every country in the world individually.

If Kraken is based in US must have licence from US and that is all. If other exchange is based in Germany licence only from Germany should be enough.

kik1977

You raise an infuriating subject: how the well-connected can get away with massive crimes, even when publicized.  Impunity is becoming an issue here in the USA.  Impunity is an issue that everyone understands: justice for the many, "just us" for the few...

If Trump is elected, it may be more the "Crooked Hillary" matters that do it rather than "The Wall" to keep out illegals.

The degree of corruption in the upper echelons of American society are staggering and mind-boggling.  At some point it will end, but it might get very messy.

Kraken now already have licensed?that's good news,and i think they are the first exchange that have licensed from Europe and Japan,and i wish many other exchange like coinbase,BTCchina and other will do same way.

Drugs?
What are you talking! Kraken from Europe? It is San Francisco-based exchange! (friendly reminder - San Francisco is in USA - it is not Europe, it is North America)

Coinbase is based in US and as i know they have all licences. In US probably only Gemini have also all licences.

That's everywhere I am afraid! Look at those banks, they are not even US based, and some of their employees (and some of the management) were happy to launder money. They had to pay a huge fine, which for them was like peanuts. A simple citizen would have stayed a long time in jail for laundering a few thousand dollars. As you said, unjustice.

Kraken is not licensed anywhere. They are outlaw in USA or other states where they operate.
Kranken is based in California, USA and they are doing financial transactions worldwide. As a reminder, a money transmitter(exchanger) MUST have licenses in all the United States and not only in one .

Example: if you are licensed in New York, you cannot make a financial  business in Florida or Texas without having licenses in Florida and Texas as well.

Only Coinbase and Circle are licensed in all USA. Circle is licensed in EU(European Union) too. Gemini is in New York, ItBit the same. The rest of the exchangers are outlaw.
YES, it's unbelievable but it is true.

You keep flip flopping between protecting the people and following the law because it is the law...  You're a cop eh? They usually don't get the difference.

is btc-e unlicenced really? Maybe in the United States. I don't think they are illegal in Russia. They were there for a long time and i don't think they will ge gone in the next 10 years at least.

yes, they are not licensed anywhere. they claim to be incorporated in Cyprus and according to the Cyprus laws(EU laws), BTC-e must have a financial license. It doesn't matter since they are online.

https://www.reddit.com/r/Bitcoin/comments/4jxddg/erik_voorhees_complying_with_bitlicense_would/

O
W
N
E
D

with some bbq sauce

Actually, if you're utilizing a ".com" domain, you're under the jurisdiction of the United States. No matter where you're based.

Just ask Kim DotCom who woke up one morning only to find dozens of US FBI personnel descending from helicopters onto his front lawn (IN NEW ZEALAND) kicking in his doors, seizing his property, businesses and bank accounts... due to internet piracy.

All of this just because his website MegaUpload had a .com at the end of it. Hence why his new website Mega.nz utilizes the .nz extension, thus removing it from the Jurisdiction of the united states.

So yes, each and every one of the aforementioned exchanges are under the jurisdiction of the united states - and if it ever becomes necessary, the owners of these platforms might wake up one day to find their wives and kids hogtied in the living room at the hands of the FBI

very good point and true !

yes, you need a license to trade FarmVille coins to cash and cash to FarmVille coins :)

if you do not use them, willing to use exchange what? because the average exchange not licensed. if you have a licensed exchanger then let me know. Thank you

coinbase is a licensed exchanger I guess! they have also an american USA headquarter.

They do probably have a license, or as close as you can get to one if they don't directly have one, since they ask for so many identification pieces and various forms of confirmation.

if you look around enough though there are a fair number of licensed exchanges, you just have to go and find them because most of them won't be advertising themselves.

Unfortunately, there are still a lot of unlicensed exchangers in the world of cryptocurrency. It is still pretty risky dealing with such kind of exchanges, but many people do't have any other options, and as so their forced to use these sites.

i think its not good to do dealing with unlicenced exchange. there is always a chance that they will take your money . so they are difficult to believe on them . i think we should avoid to do business with them. or to do any exchange through them .

Yes, it's not good to deal with unlicensed exchangers but many people are choosing without thinking.

 Bitfinex just "borrowed some cash"(over 30 MIL USD) from its clients as I warned a while ago. I am sorry that i had right :)

i think licensing would not have saved bitfinex. most would even say that bitfinex system that was hacked was a result of some changes made because of some kind of licensing. so as a result an unlicensed exchange might be safer.

Hundreds of licensed banks failed in the crisis. Licenses did not prevent that.

That bit is not true, though. They made these changes before the CFTC probed and fined them. And it's not clear whether they were even in compliance with the CFTC at the time of the hack -- they don't tell you when you are "in compliance." They only fine you (or worse) when you aren't.

The whole "segregated wallet" BS was just some marketing gimmick for customers IMO. "You can see your coins on the blockchain!" (But per their terms, you can't control them, since even if you have a key and initiate a tx, BitGo can't sign unless compelled by law)

They obviously dont have choice.Unless governments regulated bitcoin and accept it as currency,they will not give license to bitcoin exchanges

Yes you are right, unlicensed exchanges can run away with our coins and can't be booked in case they scam.But unfortunately many countries would not give license to bitcoin related exchanges.
The best option for these exchanges is to register their firm under some kind of digital business

There is always a big risk when we use those unlicensed exchangers, but sometimes people just don't have another choice and need to exchange their money fast, that's why this exchangers keep running till now

wrong. BTC is like a commodity.

 Any broker/forex/exchanger must get a financial license according to the local/international laws(if they want to operate internationally). More, if they want to operate in USA, the exchanger must get a license from each state(50 licenses in total). If the exchanger wants to deal in European Union, it must get a license in any state from EU and this license will be passported to other EU countries. If the exchanger want to deal in Australia, it must get an license from there too.If it wants to deal in China, it's the same...and so on.

This is the way an exchanger is fully in compliance with the law. Be sure that a such exchanger will run over night and it won't make haircuts like Bitfinex did and then to offer you shit tokens. :)

None of them are in America or places that don't allow unlicensed money exchangers.

any exchanger who is dealing with US clients, it is considered as making business on US soil ,so they must get a financial license(MSB). This is a FINCEN rule.

I will only say:  XAPO, KRAKEN, POLONIEX. All of them are based in USA and they have NO financial license. Conclusion : they can be shutted down overnight

Yes, this is true. However, I think there is some discrepancy in opinion about this:


I don't know about Xapo and Kraken. I would have thought Kraken would be licensed since they do fiat/crypto exchange and fiat deposit/withdrawals. I thought Xapo is just a wallet.

Poloniex doesn't take fiat deposit/withdrawal, nor do they allow trading of fiat monies directly. They do allow trading against Tether USD, which is a digital asset backed by USD. That is legally murky and true, it may not cover them. However, I don't think we have precedent to draw on here.

 Xapo is offering debit cards for BTC withdrawals which is  means of payment and bank wire for buying Bitcoin. So, Xapo is an exchanger based in USA without a financial license.

Kraken is not licensed and it's registered in USA. Even it's so vocal in the BTC media, with a lot of bla bla, they have NO license.

Any exchanger who is financial licensed will not keep hidden this thing . It will put in a visible place because :

1. it's requested by law
2. it's a very good marketing tool. it brings a lot of trust.

Don't trust my words. Please do your researches.

good link about cryptocoinsnews..patiently feeding all..

as i understood it bitfinex made the changes in order to be in compliance. but to be honest i maybe was poorly informed since i did not do a profound research on this, because i did not lose anything.

That may be true. That still just makes it a judgment call on Bitfinex's part -- obviously a bad call since it drastically compromised security and they still weren't in compliance as of a couple months ago.

Compliance should never mean sacrificing cold storage security. Any other bitcoin firms doing that? If so, I am sure they are rethinking it. I hope businesses are leaving BitGo also.

i just really really hope that any other bitcoin business doing this or something similar is taking this as a warning and is rethinking. but knowing the bitcoin world and people in general i do have my doubts. let bitfinex be at least a lesson learned for all of us.

As idiotic as it might sound, I think if the IRS discovered me trading an in-game currency, they'd want a piece of it.  Whether they'd throw me in the clinker for not reporting it...probably not, but I think legally you have to report any gains or losses, sales, all of that.  But I'm not a tax lawyer.  Bitcoin is an asset, and there's capital gain/loss considerations that have to be kept track of if you don't want to run afoul of the tax collectors.

These exchanges, except for the US ones where I know they're regulated, are all shady to me.  It never surprises me when one turns scam, like bitfinex.

They use it because it is faster and they payed everyone untill now. If people will still use it it will not be closed , because the owners earn comissions from the transactions

I never used bitfinex and i didnt know those exchange were running without any license, how does that happen, how to trust at such exchanges running outside the law? Even bitcoin not being legal at the moment, i believe kraken and poloniex and maybe some more pay their taxes accordingly the service they do.

I do not know that those sites were illegal or unlicensed.  I am planning to signup on coinbase and xapo as I would like to explore other coin wallet.  It is easy to transfer bitcoins with those sites when it came from gambling sites. ;D. 

I have not heard of any issues regarding those sites as many of my friends uses them.  Anyways, I have an account on a legit coin wallet.

That's right, i think the exchanger is included in the personal business like another online shop maybe like the hosting site is not having a licensed.
but i never heard the exchange site is having problems with licensed until now.

it is not about taxes only. it's about the right to run a financial business without being licensed to do that. The license include a bond like insurance and many other regulations. A licensed exchanger will not run overnight like many did in the past.

you are not running a convenience store where the people are buying ham and gum. even so, you need a license run it.

FINCEN regulation:

" person is an exchanger and a money transmitter if the person accepts convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency. The method of funding the transactions is not relevant to the definition of money transmitter."

and... if you are a money transmitter business( MSB), you MUST get a license from each state from USA(that means 50 licenses).

as for those who are saying "never heard the exchange site is having problems with licensed until now", I recommend them to read:


http://blog.identitymindglobal.com/bitcoin-crime-punishment

http://www.coindesk.com/men-plead-guilty-running-unlicensed-bitcoin-exchange/

https://bitcoinmagazine.com/articles/fbi-arrests-coin-mx-founders-money-laundering-violations-1437697361


https://www.wired.com/2014/01/bitcoin-exchangers-arrested/

http://bitcoinx.io/news/articles/homeland-security-reveals-task-force-to-identify-unlicensed-bitcoin-exchangers/


it seems unreal until it happens to "you". it's just a matter of them until the unlicensed exchangers (at least from USA) will be shutted down.

they use it because its free and they paid every member untill now, and also exchangers make profit from that. why would someone close that exchangers

Because they don`t have choice.Bitcoin is still illegal in some countries.

I don`t know is it possible for a cryptocurrency exchange platform to get a license.

see Coinbase, Gemini, ItBit, Circle. all these got licenses, so it's possible if you really want to run a legit business :)

Why would anybody use a licensed exchange? If you were going to do that just use your bank account. Obviously, you don't care about the exchange reporting on you.

the traders(they are the majority of clients for an exchanger) are using the bank accounts very often. they want/need cash.

also, if you live in EU, USA or other countries where the tax authority is not a joke, you do care about reporting.

that's right.
and also add to that being in US, following the US laws such as keeping logs, paying taxes, asking for all kinds of documents for verification purposes, and many more.

the problem isn't that, but the fact that bitcoin is illegal in a few places or the taxes are abusive.

This is probably because they want to stay anonymous.
There are not so much exchanges, where you can deposit and withdraw without giving them info about you (ID

Is there any licensed exchange available to trade bitcoin? I really don't know. If anyone know about it, then please let us know so that we can start using that exchange.

I am using c-cex since the beginning of my trading so is it also an unlicensed exchange? Just trying to know the truth.

according to their Facebook, they are from Germany but it can be a misleading info. it seems they are from Russia. they have no information about company(very shady website) so they surely have no license. stay away !

Coinbase, Gemini, ItBit, Circle and Bitstamp are the only exchangers (for now) who have financial licenses.

just a few post over you:
https://bitcointalk.org/index.php?topic=1445685.msg15920306#msg15920306

to my knowledge c-cex operates without a license, but you should double check this. also i do not seed why we should all just use the licenced ones. 

Depends on the country where the exchanger is running it's operation.
See those exchangers that you have listed all run in the US, where bitcoin is officially considered a legal currency and laws apply to it which is why they are required to have license.

BTC is not considered a legal currency in any country. It is considered a commodity or asset. Also, the same laws operate in almost all the countries. Once you are running an exchange/broker/forex business (accepting fiat or sending fiat) you must be licensed.  

USA is enforcing the laws much better than other countries, that's why some exchangers registered in US have applied for financial licenses. The rest of them are operating illegally.

Most unlicensed exchanges, if not all, are just giving bitcoin a bad name. They practice shady schemes which makes the price vulnerable for investors.

Yes but some people don't want to upload official documents to places like Coinbase because they lose anonymity. It's sad what happened at bfx but I understand why people use(d) them.

Bitcoin seems to be the worst magnetic attractant for criminals since the prohibition era liquor business or the 40s-50s Vegas gambling business. Too bad Bitcoin didn't exist in the mid 20th century. The Chicago, New York and Vegas La Cosa Nostra would have loved it. LOL

Even if the exchanger got licensed and then they closed or ran away, how can we sue or chase them, our account all is anonymous and we dont have any identity to prove it

Internet, irreversible, quasi anonymous, moronic users. It's just about the single most perfect petri dish for dishonesty ever conceived.

a licensed exchanger is insured(a bond is requested by the authorities before the license is granted), it has bank accounts, it must have a real office, an accountant, an external auditor and many other things.

they are not and they cannot be anonymous.

now, try to visit Bitfinex office or BTC-e office :)

I know, right? It's pure perfection. Not to mention being the best source of comedy gold there is.

I just posted "LOL" in so many whining threads about "somebody stole my bitcoins, how do I get them back" that I almost got permabanned.

ROFL

you are right, such exchanges usually turn to a scam that steals a lot of money from people so i avoid it

Completely agree with that, once you start dabbling with actual currency, you'd need a license. But I don't think it's fair to assume that Lauda was ignorant about that.


If it's an unlicensed exchange that only deals with crypto-currency, there's no problem and there's nothing wrong with that.

even bitcoin is out of law in most of the area and if they closed using bitcoin in their state and take a serious action then what about your investment, so we can say that people are investing their money for making money.

There is no option to trade with FIAT without control. If is - just let me know where i can open anonymous account! Please!

There are zones where transfer over 50k euros are over control, but we - i mean casual users of Bitcontalk - can only dream about..

I just can't help but laugh at them either, although I feel bad about it but still.

Can't really blame them for not knowing enough about bitcoins though and ignorance is a bliss is not a good excuse.

you're right !
in my country our local exchanger has licensed same like broker or forex company, since bitcoin used as a commodity like gold or oil thus our government allow them, however using bitcoin as a currency in our country is breaking the law and could be prosecuted, but until now I did not see anyone convicted cause used bitcoin as currency

Nah, feel free to laugh at the idiots. I had a professor in college that responded this way to one of the more hippie liberal students. The student wanted everyone to share equally in the wealth of society. The professor said, "some people are just too stupid, poor or lazy to educate themselves. I'm not sharing what I have with those lazy fools. If you want to give them all of your money, go right ahead but I believe the world needs low paid ditch diggers too".

He was right. I'm not leaving my big house in San Francisco to drive over to Salinas and pick my own spinach. Let the idiots do that job. In the immortal words of the English poet Thomas Tusser, "A fool and his money are soon parted".

This seems to be the number one way people are abusing bitcoin. Slowly these people are going to jail which is great for the real bitcoin community. Eventually unlicensed exchangers will be gone and only legit sellers will exist. It’s just a matter of time in my opinion.