Unlicensed Exchangers

[Senor.Bla]

Yes, it is not go to deal with unlicensed exchangers. Bitfinex just did it as I warned a while. 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.

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)

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.

[The Sceptical Chymist]

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.

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.

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

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

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.

[bostiog1]

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/

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

[Doamader]

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.

[Xester]

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. . 

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.

[JeffBrad12]

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. . 

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.

[mayax]

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.

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.

[bostiog1]

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/

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

[davis196]

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/

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.

[mayax]

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/

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

[QuestionAuthority]

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.

[mayax]

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.

[Red-Apple]

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/

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

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.

[raphma]

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.

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

[HaXX0R1337]

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

[avikz]

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.

[mayax]

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.

[Senor.Bla]

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.

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. 

[beerlover]

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/

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

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.

[mayax]

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/

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

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.