Coin Laundromat - thoughts?

[cxzsaq]

Hi All.

I'm thinking of starting a 'laundry' type service whereby my company would only buy bitcoins at slightly lower price than the selling GOX price (GOX used as example only), and immediately initiate either a wire, dwolla or paypal USD transfer. We would have to run a KYC during initial verification, but otherwise, I think this would relieve a HUGE backlog of withdraw requests from GOX and BTC-e, as well as many other exchanges.

Security will be simple because the actual 'buying' of coins would be a simple send from whatever user client to a randomly generated wallet - which, after 3 transactions would be transferred to another wallet stored on another server - an offline server going on only to sync.

All withdraws (payouts) would be done manually, but since its the core of the business, staffing will be ample. I dont expect to start out with huge amount of orders, so even a single person can run this.

Main issue is trust.

I'm located in the continental US.

Would love to hear your thoughts.

[cp1]

Doesn't it cost like $10 million or something to get started and you have to register in every state?

[cxzsaq]

Doesn't it cost like $10 million or something to get started and you have to register in every state?

Well that's what I've been researching, and the fees and state-by-state registration is for actual exchanges. Since I will not be selling or exchanging coins, Im not sure this would apply.

You are ABSOLUTELY correct that this can totally be seen as a true exchange - but operations like LocalBitcoins seems to be doing just fine.

[cp1]

Localbitcoins has individual people buying and selling.  You're talking about a company that buys btc from people.  That's an exchange.

[cxzsaq]

Localbitcoins has individual people buying and selling.  You're talking about a company that buys btc from people.  That's an exchange.

Good point. Any angles you see to circumnavigate away from an 'exchange' while still providing my type of services?

What if i operate as an individual, rather an a company?

[cp1]

You could use localbitcoins.com

[cxzsaq]

You could use localbitcoins.com

Right - the issue is that most folks have 'usd limits' of around $1k. at today's prices, thats 1 btc. I have a strong feeling that many people have more btc that they would like to cash in.