my reply is from the mind of a Brit, just so your warned.
one thing the articles the OP linked totally misses out on
bitcoin as its own entity where for instance you mine coins. buy stuff online with only coins and never ever swap for fiat. most, probably all countries AML laws don't apply. as its not treated like a currency I know that is the case for UK.and we have E-Money legal definitions too which don't apply to bitcoin as a separate entity.
so if you have been scammed or use your mined coins on drugs/gambling sites illegally in the UK. The FSA cant touch you under AML. but that being said, be careful of the cyber crimes/Scotland yard as that's a different matter and they would be knocking at your door. if they find you that is.

But AML does become more relevant in relation to FIAT-> BTC exchanges. in the US for instance, I am learning they want to know both the comings and goings. the traceability of virtually every fiat transaction small or large. where as in the UK they only want to know about large payments, especially where the FIAT goes to. So BTC itself is not the problem. But large FIAT transactions at the gates of cryptocurrency are. So as long as you don't accept large FIAT payments or give out large FIAT payments you will be treated just like a retailer. with customers buying your product BTC.
Yes, you heard it right. its currently treated like a product or commodity. Not a currency, well at least in the UK this is the case.

in the UK FSA deal with the FIAT side of things stopping at the exchanges dealing with FIAT. and cyber crimes divisions of the police force deal with the internal workings of bitcoin EG silkroad, scams/thefts.. But i think in the US the financial and cyber crimes all come under the one hat of SEC. sorry I'm a brit, so forgive my lack of US knowledge.

and i totally don't know how the Australian system works. so those Australians just mining and guying gold, printed t-shirts etc, theres nothing to worry about. but for Australians setting up FIAT to BTC exchanges. it is a different ball game

the link in OP thread asks:
But why state that e-currencies must be backed by something?
the simple answer if a website takes in FIAT and credits a membership database of members in the same FIAT value then that fiat value is an e-money. EG paypal. But if for instance the website takes in FIAT but credits the member with 10 apple credits for a silly example. then that is not e-money as its numeric value differs and it no longer represents the FIAT symbol so its whole identy has changed..
 This is why facebook don't just deal with dollars on their payments database for games. credits become unbacked by fiat as soon as they remove the $£ symbols and replace it with a number that does not relates to the fiat value. So zynga poker wont be monitored by the authorities in relation to AML laws.. Also because facebook don't deal with large single transactions so they wont be constantly monitored at their FIAT payment processing side either.

Great idea. more positive media coverage of bitcoin, and my service.
now I have a few minutes to of thought about it. It may be something to do as part of my phase 2. As right now FIAT is not the problem, having enough BTC to feed incoming customers is. Hense the loan. So while I continue to alpha test everything I will research into whether any of the dragons even know about bitcoin. As you would imagine some of the criticisms some of the people on that show receive. imagine it when 'touting' for business talking about a currency they have never heard of.
Its bad enough criticisms from the peter griffin troll, where he DOES know about bitcoin.
About the legal side. the FSA stuff only will apply during the phase two stuff (withdrawals) and the basic unjargoned version is about traceability and high value transactions. Right now phase one, (purchasing BTC) doesn't fall under FSA, instead it falls under retail laws. If you want some legal UK jargon it's Sale of goods act and the distant selling act. Which all retail stores and market traders in the UK know off the top of their heads anyways, kind of standard practice for many of us.
The projected earnings stuff. I never projected anything close to what bitinstant processes in a week. my projections posted here. well lets call them estimates are based on the PM's i am getting from interested future users. hopefully people know that projections are not set in stones but are very good estimates with numbers to back them up. in laymans terms.
My BTCJam initially and quite rightly says that even with one transaction of 150BTC a fortnight would still be able to break even and repay the loan payments. but I have also out of the 300BTC total holding i will have (if i get the loan) have set aside 50BTC to cover worse case scenario 2 weeks of repayments while popularity increases or if trade takes a slump one month. and put a 250BTC cap on transactions before the hourly refill. so hopefully i have covered all my bases.
I appreciate your advice and questioning, I just wish everyone would stay as focused and on topic as you.
and franky1. although I appreciate your comments, don't hint that my idea should be stolen also not going near Bristol anytime soon, I am stuck in Cornwall for a while concentrating on this too much to go traveling. But anytime you are in Bude we may arrange something

Firstly I would like to note that I am not afraid to speak my mind, unlike scammers who run off and make a new identity and try again. I am not a scammer and I am not afraid of fighting my corner.
1) I respect the other posters, even if they have many questions, i welcome actual questions instead of snide comments. But that one single peter griffen troll, you seriously need to stop smoking the green plant, it’s affecting you.
2) my edits add more information to clarify facts. but it has been seen and proven that your edits remove statements.
3) I suffer from insomnia so I am not perfect either, but at least your mentality is in your ability to control, I work during the day sleep in the afternoon/evening and come on here when I can’t sleep during the earlier hours. And other UK forum members also seem to be on late too so throw us in the tower of London peter griffen. lol Maybe due to American dominance, making MTGOX trading more lively in the late hours that keeps us awake, trading for profit.
4) Your maths is stupid. 35 spare BTC being $1000!!? Get out from under your rock and put your brain to work. Or maybe I’ll do the maths for you.
I know that I have put in £1700 towards BTC community and ended up with 185BTC after deductions. But I do not have the exact exchange rates of the particular transactions so let’s make it simple and put it all into one lump and use the conversion rates and fees of when the majority of the trades occurred. So £1700 at BTC price of £8.75(roughly at the time, from memory. So don’t quote). Using moneygram £1700 converts to $2477. Then add bitinstant fee of 3.99% brings it down to $2378. I will just add this now that the GBP to USD exchange rate may be slightly different now but very close approximations. Definitely not $2700 the griffen troll quotes.
Ok divide the $2378 by 185BTC brings it to $12.85 each. Now to the other point the griffen troll makes about rates only moving a few cents over the last 3months. I guess he forgot about the $14 BTC so buying some coins at over $13 and some under $12 over the last couple months would give a average resembling something similar to the high $12 dollar range.
I will now state that for my personal use I did not keep logs, sorry for that I’m only human. But for my business everything would be logged so don’t hold my personal approximations against my future business. It will all be done right down to the satoshi.

critics i welcome. and i welcome your reply to. but that peter griffen guy had no valid questions., plus i only called him a troll due to his obsurd posts which i now see he edits away to hide his inability to hold a civilized conversation

a troll is someone that makes accusations or replies with posts unrelated to the topic.

i can provide the world of information to a troll and they will just say 'you googled that'. i have provided information to interested parties and to BTCJAM but i wont feed trolls. Good luck in your drug ventures. But a piece of advice when actually scam spotting. read the information given atleast twice and only reply with credible information. eg ur first post which i now see you editted out your accusation that i denied supplying information. nice edit by the way. and thanks for correcting yourself.

my facebook listed on BTCJAM is me, not one i produced since starting up a microcash/altcurrency as you said. continue the trolling. i just wish that some scam fighters were not paranoid drug users that could actually have a civilized conversation to gain information. I would gladly appreciate a proper scam fighter any day. After just one day i truly see what butterfly labs has to contend with from trolls. and they have had a year of it.

maybe peter griffen is not the best scam police officer, i think Bitcointalk should find more suitable, intellectual representative.

and ill just leave you with this
name: jack Davis, town: bude county: cornwall

you didnt even ask me for it. you just assumed i wouldnt give it. maybe next time its best to ask first accuse second.

and the UK pounds is what i paid over many months. but you are just using todays price of dollar.. well give or take a bit.. which just coincidentally seem similar guess tomorrow when the price changes the numbers wont add up and you will be shouting a new story. i invested what i paid for my BTC over the last few months. not what is todays value in dollar. but cheers for trying to make a spectacle of yourself. guess out of the box thinking isnt required.

i got 185 for my £1700 if you account for the moneygram fee's bitinstant fee's currency conversion and then the price of BTC when it was over $13(around £9) you'll see what i mean. i used a few for personal stuff and have set aside the 150BTC for this venture. my point is that i did not just come into this community empty handed it cost me £1700 to get into bitcoin when prices were around £9,

i appreciate your reply repentance, so let’s address the issues in more detailed. I tried to dumb my analogies down as the majority of posters seemed to be of basic legal understanding and I wanted to put it in terms they would understand.

Ok.
You seem to be American by your use of lawyers which in England we call them solicitors or financial advisers. So let’s get to the knitty gritty details.
I wanted to implement phase 2 (withdrawal) at the same time as phase 1 (buying bitcoin) but that takes time due to the facts that the FSA would THEN class me as providing a regulated activity which I am currently dealing with the phase 2 stuff. From current legal stand point in English financial law bitcoin is not recognized as 'money' but a product or service where by purchasing them is not regulated and does not come under FSA regulations. I know we personally consider it as ‘money’ but it has not yet been confirmed as ‘money’ in England.
Many analogies about facebook credits I have read about, poker chips oranges and pears. But my advisor basically says we are purchasing a database of data.
if i was to take UK £ in and have a database saying user Paul has £xx and he traded in pounds on my server this would be regulated activity as having the data in Pound form is ‘e-money’.  But because EG Paul is buying bitcoins, he is buying a product in todays legal terms.
Back to the phase 2 Side of the matter,  where things get trickier. In UK financial law/regulations the bitcoin itself is not the problem when it comes to FSA regulations. It is what I do with the UK Pound between the person paying in and the person cashing out.
American term KYC (know your customer) is indeed used by banks who have financial obligations under laws and regulations to monitor that stuff. But in England it’s not called KYC officially but instead it’s called Customer Due Diligence and as part of my alpha testing and consulting an advisor I have found out that using a prepaid debit card for deposits removes some of those hurdles and sets me up ready for phase 2 once I have all my eggs in one basket. So using your American term KYC is not used with prepaid debit cards.
Also bitinstant is as you said registered as a retailer. Not a financial institution/organisation. Which in England it does not require special licences for the UK equivalent under the sales of goods and services mumbo jumbo.
I do not mean my comments to sound negative or aggressive towards you repentance, as I truly welcome your line of questioning, far more then the peter griffin troll. Feel free to ask more if I missed anything. And sorry if I did, it’s just writing all the stuff and checking notes may make me miss one of the many questions asked.
I personally do not want to come across as a uptight know it all talking like a Harvard graduate using big long words. I am down to earth and try to speak to people in plain English. So forgive my lack of legal terminology

should i entertain this troll??

hmm.

1) yes i have read posts before but thought amungst the 50 pages of trolls for 1 page of useful information that having a login just to read posts was not required.
2) if i only validated my phone i would have a rep of 1 get out from under your rock and check again
3) i myself have invested over £1,700k in this. the loan is to expand capital and have assurances of growth.
4) i seem to think you have never run a business to know how they work and how loans can benefit businesses.
5) 80-90% of YOUR money has drugs residue on them. that is plainly obvious by your drugged paranoia and blatant ignorance of what is wrote. you obviously did not read the answer to the capitol question about MY 150BTC (£1700)...
6) you are not peter griffin.
7) wish there was an ignore button.
anyone with actual questions feel free to reply. im ending this troll reply by ignoring his posts. lets keep this professional
 

lets entertain the  troll accusing scams at every juncture. Especially with a lie in their statement. my username gives out my identity and my BTCJam has more. I am not hiding behind pseudonyms like nefario or pirate. and i have never refused anything. I was told only drug dealers need anonymity and anyone with a legal business plan should not hide behind pseudonyms and should not avoid using middlemen like btcjam to protect investors. read my posts.. I have been honest. I am not going to make up a dodgy pseudonym like pirate. Then prance about on forums for months trolling just to get 1000's of posts to seem legit then have a sudden eureka moment abut a business. nor am i gong to do penny loans to buy reputation. As that is all fake. I have a business plan and I want to get it started now not in 3 months of trolling to fake credibility. i am starting to see why BFLJOSH aka INABA gets frustrated at trolls when its obvious they are delivering products.

now the entertainment is over, onto the serious questions
The AML/KYC is half American legal terminology. But lets deal with it anyway. those other Bitcoin services that used these terms as excuses to shutdown, were just that, excuses. notes from what my advisor said was that unless my business sold illegal materials direct or advertised it would exchange tainted drug money for clean freshly mined coins for a profit cuts, i am fine.

basically unless i deal direct with illegal products or knowingly accept funds direct from illegal activities then i would be monitored. he also mentioned that for instance if a drug dealer on the street done a drug deal in FIAT, walked into a store and bought a pack of cigarettes and beer using the drug money. would the store owner be arrested for laundering drug funds.

If all these legal scare stories from other companies running off with your funds were actually true, then bitinstant would have been up shit creek without a paddled months ago. I want to be like bitinstant. sailing the sunny sea's of profit, not pretending to be up shit creek without a paddle while running to a deserted island with a treasure chest of gold (pirate analogy  )

bitcoins are not illegal, I was also informed that it is a known fact that 1 in 10 fiat notes in circulation (excluding direct from ATM's) may have drugs residue on them. airports have highlighted this when they do their drug testing on money.

I thank you for your replies and questions. I will ignore the trolls about scams, as I am not asking for a loan to feed 5 kids or for hospital bills or pretending to be a female asking for a boob job, offering the investor a view once healed. Lol I have plans on using this loan to make money and repay.

Have you even checked whether you'd need a licence from the FSA?
Yes I have checked out the legality of the matter.
If you are a UK resident you will know that people selling products and services do not need to become members of FSA to be regulated by them. For instance gambling websites that accept FIAT in exchange for poker chips do not need to be FSA regulated members, but they do need a gambling licence from another UK agency. My service does not gamble or trade in cigarettes, alcohol or firearms so requires no licences. Plus FSA use the term members not licences.

Have you obtained any legal advice regarding this idea?  
Yes, and on a separate note while talking to an advisor the myth that the GLBSE disappeared due to anything FSA related is a false statement made by someone that has no idea what FSA actually do. But concentrating on my business, as long as I do not sell illegal products direct, there are no issues. Bitcoin is not illegal, so no one should fear governments raiding your bitcoin client wallets dry.

How are you going to avoid the problems which other Bitcoin services have encountered with UK banks?
I have found a solution to this because, while alpha testing my service I found out that an actual UK bank account transfer is slow where some banks do not instantly deposit funds. I do have a more detailed explanation of how I got around this but I don’t want to make it public for others to compete. Any serious investor can PM me about the plan as long as it doesn’t show the entirety of the plan on public forums for people to steal my idea. Let’s just hint at the use of a prepaid card that customers top up my master account (shows instantly) from banks, post offices, shops anywhere that you see a 'paypoint' that people use to top up mobile phones and their electricity/gas budget keys.  I thank god for this as it solves your banking question and helps me get closer to my next phase I had planned in one swoop, Withdrawals via prepaid cards.

What on earth makes you think that launching a payment gateway with such a small amount of capital would be viable?
My customers, is my answer. At first I did envision I would require many thousands, but then I found out that my current list of interested customers only want to put in £100 - £250 at a time.  When the fee's decrease after the loan is paid off, they would pay in more regularly. (Basically small percentage of their wage cheque each week) so I found having thousands of coins sat there each day, with only 10-15BTC transferring between each customer was totalling about 150ish a day.  Thousands of coins would be a waste, as they would bump interest costs up. Where the majority of thousands of coins would just sit there not making money. My ethos is to never ask for more then you need or can repay.
I can use the FIAT funds obtained to get more coins within an hour so when business does pick up beyond a 250BTC an hour cap. Fresh coins would be available within the hour plus with each transaction I can get more coins then I sold using the first transactions funds. Thus rinse and repeating into profit. Yes 250 cap so that I have 50BTC sat to ready to repay the 20BTC weekly loan repayment. Which as profits increase would change the cap value.

What anti-fraud measures will you have in place?
No PayPal is taken so the chargeback kings of eBay can’t do their tricks. With regards to my service, NO Hot wallet just a database of non valuable information. No information in source code related to the location of the off server management system. But everything is handled off server, and the server/website is just a transaction/request display.
How much of your own money are you putting towards this venture?
I also have 150BTC (totalling 300BTC which explains the final paragraph in the small capital question) but anyone in business knows it’s best to have some assurances. EG UK retailers use creditors to pay the suppliers and the retailer pays them.

Initial estimates of income are 150BTC a day ( 1050 a week) which at 6% is over 63BTC a week, easily 3 times more than loan repayment requires. This is just based on the few interested customers I already have listed. Investors have their 20BTC a week I keep the 40BTC and increase my BTC funds until loan repaid and I am self sufficient. But as you can see by a 250BTC an hour possibility, my profits can be huge.
Feel free to post more questions

here is the link to the BTCJAM
https://btcjam.com/listings/166

I was told the best way to gain trust is to reveal your name and not hide behind pseudonyms. But I guess having a business mind and wanting to get a business up and running straight away requires hiding your real name and not getting a business up and running until you have trolled for 3 months to pretend you don't want to run a business. Then have a sudden eureka moment and ask for a loan then???

Dont get me wrong advice to weed out scammers is a good thing but my way of spotting scammers is this

1) to buy real world products - thats a red flag for me because if they can't get FIAT loan from a bank/friend or family then a stranger shouldn't trust them either.
2) their loan wont be used to make money, but to purchase objects - second red flag as you have to ask yourself if they cant buy it themselves how will they repay.
3) just like number 1, but for sob stories such as hospital bills, car maintenance
4) they hide their real life info and have dodgy pseudonyms like nefarious and pirate.
5) their use of bitcoins has nothing linked to the community to make it a better place. but request a personal loan as appose to a community growing business loan.
6) they don't seem interested in bitcoin's future growth. they just want money.
7) they don't want to use a middle man like a respected community member or a service like BTCJAM

i do agree about the trolls/scammers using female identities to tug on guys heart strings for funds being a red flag. women in reality don't ask for loans, they get a man to do it in his name, take his funds in the divorce and leave him with the debt. lol

I think the drug, arms dealers, hackers, etc should remain anonymous with pseudonyms but anyone asking for loans or starting up a business should be open and honest about their identity. I know i'll repay my loans so I have nothing to hide and don't fear knocks on my door in the middle of the night.

Ok so with the demand for a UK, easy to fund method of getting bitcoins increasing. Along with the headaches of using GBP -> USD -> BTC also increasing. I have come up with a solution. To make my own UK version of what bitinstant offers.

first step
having a business bank account in the UK that accepts payments. (which I have already)
second step
Having a large enough stash of BTC to cover request/payments from UK paying customers. (which I am currently seeking via https://btcjam.com/listings/166)
third step
Launch the site and start getting GBP in and then use that to obtain more BTC+6% and rince and repeat (I already have many UK customers waiting)
forth step
once the loan is paid off increase my own self sufficient stash of BTC and GBP to a reasonable level.
Fifth step
start offering GBP withdrawals via pre-paid Debit cards.

Now that you know my first five steps, I want your idea's for the next steps. What would you like to see in the future from a UK payment gateway, beyond just money in and out, BTC in and out. please reply with great idea's of features or items you would like to see, even obsurd idea's can be great.

Thank you. I will PM you when it goes live along with the other interested parties. I want to get this project started sooner not later so using a loan to buy ASICS which still do not have a confirmed delivery date, knowing that I have to repay it. Would cost me more money, then I would make. So I will just use the loan to get UK sterling to then buy more Bitcoins, rinse and repeat multiple times.
But once I get passed the loan, when its repaid in full and I am making my own profits. Basically, when ASICS finally reach peoples doorsteps with a reasonable order to delivery timeframe. I might just do that.
But for now, profiting and repaying a loan by direct transactions between people is where my mindset is currently.

This is great. great publicity. I am soon going to venture into the UK market with a bitinstant concept and I hope one day I will have a "meanwhile in UK" picture of the exact same thing. This is what bitcoin needs, some positive publicity that it is a meaningful currency without a single cannabis leaf insight.

I hope so, i have come across many people hating the dollars control over getting into bitcoin. Us English folk are finding it hard to spread the value of BTC to other english folk due to the dollars dominance. So that's one of the first triggers that gave me the idea.
First:
make it easier for UK to get into Bitcoin
Secondly:
Once the loan is paid off start holding a percentage of sterling (not converted back to bitcoin) to offer a pre-paid debit card for cashing out in UK Pound Sterling. Which will then give me a influx of bitcoins to set aside for UK Pound sterling. and also Pound sterling from customers 'getting in' to set aside for Bitcoin 'cashing out' users. lessening the reliance of third parties.
Thirdly:
Offer the same debit card to UK businesses so they can too accept bitcoin and have access to UK Pound Sterling for their wage, stock requirements.
Fourthly:
Seek out their suppliers to accept Bitcoins via me so that the requirement of the merchants to use only sterling becomes less, and gives me more business. loosening the control which FIAT has on businesses.

But for now step one is important to get set up, correctly and properly. 2,3,4 are further down the road.

Hi there, i am looking to start a UK based version of what bitinstant offers. Why? you might ask. Because I believe that there is a gap in the market. I have myself been frustrated by the loss of potential bitcoins due to the exchange rate from GBP to dollars. then the moneygram fee's then the other fees with sites like bitinstant.

i propose to make a site that accepts UK Pound sterling direct (sameday (same hour dependant on your bank) which purchases them at a flat 6% costs. This fee will reduce but is set at 6% to repay the loan interest. When the loan is paid off the transaction fee for customers will go down.

So what do I need a loan for? For the initial customers to receive BTC. I have been informed to use BTCJam.com as my middleman. So this is what i have done. Feel free to  view the proposal on their and fund my project as i already have a list of people waiting to 'get in' to bitcoin using UK Pound sterling, without the headaches.

https://btcjam.com/listings/166

I personally use BTCJam as my middle man as it seems to be well established. i would recommend only dealing with either established people or using established middlemen if your going to do trades or loans.

But dont trust me, use your own head and personal judgement.

People please be aware that the 4 hours limit is for active time not time since first sign up. I signed up late last night and then went to sleep, woke up and I am still not in the main area. So a few more hours of clicking through threads and posting messages every few minutes and I should be in.

you wont gain anything by just signing up and leaving it as a minimised tab. You need to be clicking and posting regularly.

I see this as a good anti-troll method but it does get boring trying to think of topics to write about just to keep the login session alive. Especially if you have already read the majority of the posts prior to signing up.

But still it should be worth the wait. Just dont want to fall asleep again

Hi there british people. I too found it hard to get bitcoin with our beloved sterling. which is why I am thinking of making a bitinstant like site for the UK population. At first taking in sterling in exchange for bitcoin, as the funds increase then offering a cashing out method using pre-paid visa debit cards that you see at Shell petrol stations. that can be topped up the same day. the better thing about using a UK to bitcoin service I release is that the sterling reaches my account same day, within the hour in some cases (depending on your UK bank). so it will be quicker then using those annoying American services with all their FIAT conversion prices and then fee's. So there would be less fee's eventually to make my service the best solution for us Brits.

It is still in the development stage. But it seems your problems are soon to be solved.

So i welcome your custom when the site goes live and feel free to PM me any idea's what little extra's you would like to see a UK version of bitinstant perform for its customers. No idea is too obsurd, so feel free to PM me with more idea's to make my future site a roaring success.

edit: posted in wrong thread. oops

reward halving and also difficulty increasing will make 40gh/s feel like 2gh/s but on the flip side BTC may reach $20 each