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Author Topic: How come Bitstamp are operating in the US without proper licenses?  (Read 2091 times)
JCdeuce
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March 08, 2016, 03:13:38 PM
 #1

Are they simply risking their asses or am i misunderstanding something? To date, they don't have any single money transmitter license and still they operate in all states.

Any idea how come?
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March 09, 2016, 07:51:44 AM
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because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different
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March 09, 2016, 11:52:25 AM
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Bitfinex is well and truly outside the US. They reject customers in NY. Plenty of Chinese exchanges reject US customers too. There's got to be a reason for that.

It's a good question. They have a US office listed now too. They declared on twitter that they were applying for a bitlicence. As for all the other states there's never been a mention of anything.

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March 09, 2016, 03:28:11 PM
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because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.
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March 09, 2016, 03:41:36 PM
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Bitfinex is well and truly outside the US. They reject customers in NY. Plenty of Chinese exchanges reject US customers too. There's got to be a reason for that.

It's a good question. They have a US office listed now too. They declared on twitter that they were applying for a bitlicence. As for all the other states there's never been a mention of anything.


As i mentioned above it doesn't seem to matter wether you have a US presence or bank in the US. What matters is if you serve US residents which they do. the fact that they also have a US presence does make it even more strange though.

So the question remains unanswered
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March 10, 2016, 08:35:41 AM
 #6

because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.

maybe they are not allowing some citizens from america, so they can go ahead and not acquire a license? or their jurisdiction is vastly different?

it's not like USA can impose a licence to an exchange that operate outside of their territory, at best they can not allow their customers to buy there
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March 12, 2016, 03:09:19 PM
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because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.

maybe they are not allowing some citizens from america, so they can go ahead and not acquire a license? or their jurisdiction is vastly different?

it's not like USA can impose a licence to an exchange that operate outside of their territory, at best they can not allow their customers to buy there


They are currently allowing customers from all US states.
The US law, federal and state, is imposing its regulations on whoever serves their residents meaning if you operate an exchange and have customers in the states you are obliged to obtain money transmitter licenses in most states. If you operate without proper license not only they can shut down your website/business but they can (and will eventually) also come after you even if you're outside the country and throw you in jail for running an unlicensed exchange.

I'm guessing they have some kind of a legal opinion which mandates them to operate somehow.
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March 13, 2016, 07:40:15 AM
 #8

because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.

maybe they are not allowing some citizens from america, so they can go ahead and not acquire a license? or their jurisdiction is vastly different?

it's not like USA can impose a licence to an exchange that operate outside of their territory, at best they can not allow their customers to buy there


They are currently allowing customers from all US states.
The US law, federal and state, is imposing its regulations on whoever serves their residents meaning if you operate an exchange and have customers in the states you are obliged to obtain money transmitter licenses in most states. If you operate without proper license not only they can shut down your website/business but they can (and will eventually) also come after you even if you're outside the country and throw you in jail for running an unlicensed exchange.

I'm guessing they have some kind of a legal opinion which mandates them to operate somehow.

i doubt small exchange are doing it, they can hide their location well, somethigng like yobit exchange is not running any licence, i can bet my ass on that, but perhaps is not needed if you deal in crypto only
JCdeuce
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March 13, 2016, 07:43:43 AM
 #9

because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.

maybe they are not allowing some citizens from america, so they can go ahead and not acquire a license? or their jurisdiction is vastly different?

it's not like USA can impose a licence to an exchange that operate outside of their territory, at best they can not allow their customers to buy there


They are currently allowing customers from all US states.
The US law, federal and state, is imposing its regulations on whoever serves their residents meaning if you operate an exchange and have customers in the states you are obliged to obtain money transmitter licenses in most states. If you operate without proper license not only they can shut down your website/business but they can (and will eventually) also come after you even if you're outside the country and throw you in jail for running an unlicensed exchange.

I'm guessing they have some kind of a legal opinion which mandates them to operate somehow.

i doubt small exchange are doing it, they can hide their location well, somethign like yobit exchange is not runnign any licence, i can bet my ass on that, but perhaps is not needed if you deal in crypto only


I agree that most small exchanges probably don't have any license but this is Bitstamp we're talking about here, they don't really fall under the definition of a small exchange.
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March 16, 2016, 06:55:49 AM
 #10

It is becoming increasingly difficult to see why anyone does bitcoin business in the USA, land of the fee.

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JCdeuce
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March 16, 2016, 07:55:23 AM
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It is becoming increasingly difficult to see why anyone does bitcoin business in the USA, land of the fee.

I agree. Kind of ridiculous but i encountered a message like "Currently not serving Iran, Syria North Korea and USA" more than once.

So how the hell Bitstamp is pulling this off after all?
BuySomeBitcoins
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March 26, 2018, 11:10:03 PM
 #12

Are they simply risking their asses or am i misunderstanding something? To date, they don't have any single money transmitter license and still they operate in all states.

Any idea how come?

They are not regulated in any state, therefore they are not compliant with state licensing requirements.

If you are a U.S person ; US citizen, resident, company, you should probably avoid using that exchange.

 
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March 27, 2018, 03:37:01 AM
 #13

because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.

This is the correct interpretation of the laws covering money transmitter business or that of an exchange though based abroad but accepting members and business transactions from USA citizens. The government of the USA will only act if there is an involvement with their citizens that is why many companies and programs are shutting their doors to citizens of this country otherwise it can be a big hassle and can lead to legal battles with the mightiest county (so far) on Earth.

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March 27, 2018, 03:45:22 PM
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because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.

This is the correct interpretation of the laws covering money transmitter business or that of an exchange though based abroad but accepting members and business transactions from USA citizens. The government of the USA will only act if there is an involvement with their citizens that is why many companies and programs are shutting their doors to citizens of this country otherwise it can be a big hassle and can lead to legal battles with the mightiest county (so far) on Earth.

It is precisely for this reason why some exchanges rather not deal with states or countries which have strict juristdiction because its simply a hassle and not worth the hassle. They would rather not deal with them because of having to deal with regulations, licenses and AML laws. It's discouraging and they may lose potential clients however there's the risk of having to deal with law suits or damages if they don't comply properly.

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March 27, 2018, 05:34:55 PM
 #15

because they bank is not in the usa, is this the same as kraken isn't it? i don't remember other exchange outside of the usa having any licence

rule abroad(when see from america) are different


The US AML law for this matter doesn't refer to wether your bank is outside the US or not and not even if you have a physical US presence. From what i know, as long as you serve US customers in any state you should be licensed in that state (that of course if your operations and business model requires a license and Bitstamp's does).

CEX for example is a non US based exchange and they do have money transmitter licenses in the US.

maybe they are not allowing some citizens from america, so they can go ahead and not acquire a license? or their jurisdiction is vastly different?

it's not like USA can impose a licence to an exchange that operate outside of their territory, at best they can not allow their customers to buy there

They are masters of this game and that's it. They have an army of lawyers thinking each day how to do that. They do it correctly as for today because they don't have any problems with USA regulators. I am sure if there is something wrong with their business authorities will not allow and stop this. Especially USA authorities and regulators with their hate to BTC and cryptocurrencies.

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March 27, 2018, 06:12:32 PM
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They are masters of this game and that's it. They have an army of lawyers thinking each day how to do that. They do it correctly as for today because they don't have any problems with USA regulators.

That makes sense, and would also explain why Bitstamp just sticks to the few main coins they already have, instead of having many listings like Bittrex for example. In certain states having ICO tokens listed means you need to apply for a license that can only be granted to you by the SEC, where if I'm not mistaken, this now applies to all states. In other words, exchanges having listed ICO tokens fitting in the securities category are obliged to get the approval of the SEC in order to operate. From what I know currently, Poloniex due to their takeover and SEC approval, is the only exchange that is legally allowed to operate within the USA as traditional/securities exchange, which is quite an achievement.
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March 27, 2018, 06:41:21 PM
 #17

They are masters of this game and that's it. They have an army of lawyers thinking each day how to do that. They do it correctly as for today because they don't have any problems with USA regulators. I am sure if there is something wrong with their business authorities will not allow and stop this. Especially USA authorities and regulators with their hate to BTC and cryptocurrencies.

Surely instead of spending a fortune with lawyers picking holes and dodging things they would have every publicly announced bit of regulation imaginable across every state just like Coinbase.

The OP's question is still valid.

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March 27, 2018, 09:24:56 PM
 #18

Are they simply risking their asses or am i misunderstanding something? To date, they don't have any single money transmitter license and still they operate in all states.

Any idea how come?

And what exactly is it about you with them? Bitstamp is one exchange that have proven to be legit and I believe they have explanation for this with the experts that would be advising them. If they are not on the right side of law, while they can get away with it in other third world countries, they surely can do that in the United States and they won't even need you to remind them the amount trouble they are in.

If you don't trust them enough to handle your funds just decide and move it out immediately pending when the 'authority' will be ready for them and seize all of their funds.
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