Rich people are happy to pay for wire transfers to move their money.  People wanting to deposit $50 with an exchange or withdraw $100 from it don't want to pay $30 or more for an international wire transfer  - and I suspect that an awful lot of people are conducting those kind of small transactions based on what gets posted on the forum.  People want a cheap method of getting money in and out of their exchange accounts but they also want it to be rapid.  It's easy to provide one or the other but a little more challenging to come up with a method which combines both.
 
To some extent, I think there's a bit of a conflict in what users want from exchanges and wallet services.  On the one hand, they want them to be based in locations where they're transparent and accountable and on the other hand they want them to offer the benefits which operating offshore provide.

The whole point of establishing a presence in Europe was to offer SEPA to their European customers.  There are already plenty of ways to get money in and out of the exchanges by going through third party processors but people living in Europe wanted a quick and easy way to deposit and withdraw money from the exchanges.  SEPA offered that.  People don't want to have to fuck around with the whole bank account > payment processor > MtGox thing to deposit and they especially don't want to have to fuck around with the same process in reverse to withdraw.

The online gambling sites didn't just go offshore, they also routed their customers' funds through third party processors.  That was the point of vulnerability when the US Department of Justice went after the online gambling sites which had been allowing US customers to play - they went after the third party processors and large amounts of player funds which were in the accounts of the payment processors were frozen.

There are already offshore exchanges - TradeHill is one - the issue is being able to offer users quick and uncomplicated methods of depositing and withdrawing their funds without running into legal problems.  

Confidence in what though?  For an organisation like the one proposed to have any credibility, it has to be independent from for-profit Bitcoin services.  New users get spooked about price volatility and whether Bitcoin services are going to run off with their BTC/money - two things which the proposed organisation would have no influence over. 

At best, a foundation could issue a set of desirable guidelines for Bitcoin services and list the businesses which claim to comply with those guidelines, but such a list would be meaningless and inspire false confidence unless the foundation had the capacity and the resources to verify those claims.

When would you be looking at the foundation starting to pay salaries to the devs Gavin?  That's something I'd view as happening well into the future, but I understand the idea that the shepherds of the official client should be paid for the time and effort they put into the protocol.  I think implementing that could be a bit contentious though as decisions would need to be made about how many devs get paid, which specific devs get paid, and what they're expected to deliver in return for their salaries.

One thing which I think is extremely important is that the devs have no role in running the foundation if they're being paid a salary.

That's an issue which non-profits in general have to face as they still rely to a large extent on volunteers to do most of their work.

This is the case whether or not the devs who work on the official client do so under the auspices of a legal entity, though.  

Your comment raises another issue - legal entities have legal liability.  It's much easier to sue an organisation which has taken "ownership" of the official client and is formally responsible for distributing a product or service.

I've been involved with not for profits for the last 30 years and my first piece of advice is to keep it simple.  While there are lots of functions such a foundation could perform, both human and financial resources will be limited so you need to establish a clear vision of what you want the organisation to do and prioritise the order in which you take on various roles.  Trying to do everything at once and to be all things to all people will result in a total clusterfuck.

NFPs typically require some kind of governing body such as a board elected by the membership - the exact requirements will vary depending on where it's legally incorporated.  They're also generally required to have their accounts audited.

You will need to seek legal advice on whether the foundation would have any legal standing to seek trademark control without the express permission of Satoshi.  In countries which aren't "first to file", it may be difficult to obtain various types of IP protection both because Bitcoin is already in the public domain and also because those seeking IP protection would need to establish their "right" to the trademark.

Is any forum safe from the alt. currency wars?

I do, but only for the lulz.

I  largely agree with you on that.  I doubt that any of the exchanges which existed before the Bitcoin bubble had planned for such rapid growth.  They probably weren't capitalised for it and so are entirely dependent on revenues to fund it (they could raise outside capital, but that's another story).

There's no excuse for new exchanges to have the same issues though. It's ridiculous to start a new exchange now without enough starting capital to fund proper security, regulatory compliance, etc - such ventures deserve to fail.  I'm not suggesting that it would be cheap - on the contrary, I'd expect any new exchange to have a minimum of several hundred thousand dollars in start-up capital - but it's crazy to start an exchange on a wing and a prayer now and simply hope that revenues will cover both your initial investment plus your ongoing costs. 

Actually PayPal had its ass handed to it over not being compliant with financial services regulations many times in the early days.  Like the exchanges, they argued that they were a new and different type of services and that the usual regulations didn't apply to them because...PayPal.

The Bitcoin exchanges for some reason thought that their withdrawal limits would exempt them from AML compliance requirements.  They should probably sue any accountant or lawyer who gave them such advice because there were never any valid grounds to believe that.

Terms of Service and User Agreements don't trump the law.  If they're required by their banks to verify customer IDs, then they either comply with that or their accounts get frozen.  Allowing customers to withdraw anonymously isn't going to be an option in many cases.  It's certainly not criminal to require people to comply with the law before they can access their funds.  And "I lost money because MtGox complied with the law" isn't likely to fly in a civil suit either.


Privacy and anonymity are not the same thing. 

The real problem is that no Bitcoin exchange is going to have a moat.  Jessy Kang explained it well in regard to the adult services industry, but the same principles apply here.  Because there's nothing unique about Bitcoin exchanges, if Bitcoin ever became widely adopted and the masses were screaming to be able to use it in every day life, it would be a trivial matter for large financial service providers to open their own Bitcoin exchanges and integrate them with their existing services.  Adding Bitcoin to existing infrastructures would be a trivial expense for them whereas creating the same kind of infrastructure as modern banking uses is a huge financial challenge for Bitcoin exchanges.

While I don't really knock the exchanges for trying to avoid the costs associated with regulatory compliance as long as possible, they should always have had a contingency plan and been preparing for the day when they would have to become compliant.  If their businesses were only viable for as long as they weren't being forced to comply with general financial services regulations, then they were doomed to fail anyway.

Gotta agree here.  This has little to do with Bitcoin per se and everything to do with offering financial services without the appropriate licences.  You accept and hold user deposits or transmit funds between users and you're going to need a licence - even if you're accepting those funds so people can trade Beanie Babies.  People have been bringing this issue up for months and the response of the exchanges has tended to be that they don't need a licence because...Bitcoins.  

Once there was a ruling in respect of one exchange in Europe it was almost inevitable that other banks would make decisions about their exchange clients which are consistent with that ruling.  It's highly possible that they've been waiting for the battle to be fought in France so they didn't have to go through the process of seeking determinations themselves about the nature of the business their exchange clients are operating.  But even if they weren't especially waiting for this ruling, such determinations get quickly circulated within industries as a matter of routine and legal departments specifically look into whether those rulings are relevant to operations of their own employer.

I hope that before anyone opens any more exchanges they'll fully investigate the financial regulations they'll need to comply with and the cost of doing so.  Not all markets are going to prove viable for all players.  The cost of compliance with financial regulations may well mean that some markets aren't going to be viable for young exchanges (and all of the exchanges are young).  Exchanges need to determine that in advance instead of just opening in new markets and hoping for the best.

The technology is already mainstream.  Visa and Mastercard have been using it for quite a while and Visa in particular has been aggressive about getting their payWave system (Mastercard has PayPass) adopted - it's partnered with Samsung to provide NFC payments at the London Olympics and signed a global licensing deal last month to provide NFC technology for Google wallet.

I'm just glad that someone near my timezone is online.  It's too hot and humid for sleep here and I need entertainment.

Guess Atlas reported you for derailing his thread.  He's sure keeping the mods busy at the moment/

Australia.

My perception is that they were genuinely naive and thought that if they set a $1000 per day/$10,000 per month withdrawal limit then that would somehow exempt them from having to comply with AML/KYC and various other financial services laws in the countries in which they operate.  Quite a  few times people questioned that logic and got vague answers about how those rules couldn't be applied to their operations because...Bitcoins.

Although it was before my time on these boards, from what I've read about how Mt Gox operated prior to being taken over by Mark the withdrawal limits used to be lower and the time period to withdraw much longer - which probably reflected the relatively low volume and small cashflow which the exchanges had prior to the surge in Bitcoin prices.

In many jurisdictions it is going to be illegal for them to allow customers to remove their money anonymously.  Just because withdrawals are below the threshold amount which requires that the transaction must be reported to the financial tracking organisation in a particular country, doesn't mean that financial services providers aren't required to know the identities of customers making transactions below that threshold.

I do utterly agree that their customer service stinks.  They need to be proactive about getting information to their users rather than simply putting announcements about issues on their websites and relying on others to repost it in the forums - especially when those issues affect people being able to access their funds.  Far too often, they've even delayed putting announcements on their website for days after people have been complaining here about not being able to withdraw through dwolla/paxum/SEPA/whatever when they clearly knew that there was an issue.  And often when they've finally deigned to respond on the forums, their answers have been formulaic, robotic, and given no more information than was already on their website. 

I get that they're probably stretched to the limit in terms of staff resources right now, but being stonewalled isn't reassuring to their customers.  They're quick enough to come here and post when they want to announce something which they think will bring them more business, but pitifully slow at making an appearance when something goes wrong.

I browse it quite often but most of the "can someone post this for me" requests relate to stuff which can just as easily be posted after 4 hours/5 posts, so I see no particular reason for reposting or linking to it.

People keep complaining about MtGox's market dominance, but they keep using it because it has the volume - so it's the users themselves who are perpetuating that market dominance.

The exchanges failing would have a big impact on speculators and on those who use the exchanges as a kind of bank to hold their Bitcoins and their money, but it wouldn't affect the success or failure of Bitcoin as a peer to peer currency.  A lot of people would probably abandon Bitcoin if there was no longer a relatively easy way to speculate with it, but that wouldn't necessarily a bad thing - in some ways a lot of the problems it's experiencing now are the result of people wanting a maturity from it now which it was never designed to have at this point.

And the bigger it gets and the more markets it expands into, the more it's going to have to comply with all sorts of financial services regulations and AML/CTF/KYC laws.  This might piss people off, but they get more pissed off when they can't get their funds because Mt Gox accounts are frozen due to suspicious activity.  If the exchanges don't comply with AML requirements, everyone's money which is held in their accounts is at risk of being frozen.  

It's amazing that Mt Gox managed to operate for so long before this became an issue really.  I expect that all the exchanges hoped they'd be able to fly under the radar for quite a bit longer.  It takes considerable staff time and therefore costs money to verify accounts to comply with AML requirements and I'm sure the exchanges would rather not be bearing those costs during their start-up period.

The time has probably come where all of the exchanges need to have user agreements which clearly state that their customers may be required to verify their accounts and/or their identity at any time and that if they fail to do so their funds will not be released.  The problem is that people rarely read complex user agreements such as those of PayPal and Technocash until access to their funds has been blocked.  Even if the exchanges do have complex, multi-page user agreements I suspect that people are still going to bitch when the terms of those agreements are enforced.

I'm not sure about elsewhere in the world, but I know that here when a customer refuses to verify their account and/or identity to a business like PayPal or another financial service provider, the funds in their account must be transferred to one of the government unclaimed money funds after a certain period of time.  

Someone in the Newbie forum has a possible solution.

https://bitcointalk.org/index.php?topic=49502.0

For what it's worth, I think the way the members list here is set up is a good example of what to avoid.  It would be near useless without an over-arching search function.

https://bitcointalk.org/index.php?action=mlist