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Author Topic: Bitcoin Exchange Legality  (Read 1054 times)
BigSponge
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March 18, 2017, 02:22:16 PM
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So lately I've been looking a lot into the legalities of bitcoin and bitcoin exchanging and I haven't been able to find exactly everything I'm looking for on the matter and hoping someone on here can provide some insight that I may be overlooking. Me and a good friend of mine have been trying to look into starting a website in which we would do exchanges of bitcoin and other cryto-currency stock that we already have for mostly PayPal. With that, we've also been considering registering as an official LLC (Limited Liability Company) with the reasons being so we can efficiently handle the tax implications that come with bitcoin and for other official reasons to establish ourselves as exchangers. My biggest question would be this; if we were to proceed with this and registered as an LLC, would we be required to obtain Money Transmitter Licenses in every state that our clientele came from? I've also found articles explaining how areas of the government, like the IRS, consider bitcoin to be property, and not considered a currency because it is not backed like the USD. I also know that very well known websites, such as CoinBase have these licenses in every state that requires them, however, others, such as CEX.io and Kraken do not. I'm at a halt in what I can find right now, so any information would be greatly appreciated. 
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sachinunchwal
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March 18, 2017, 04:46:11 PM
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yes bitcoin exchange legality
The legal status of bitcoin varies substantially from country to country and is still undefined or changing in many of them. While some countries have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.
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March 18, 2017, 07:23:05 PM
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The legality of Bitcoin exchanges is very hazy in a lot of countries, but generally they are legal and not too heavily regulated.

However, some exchanges (such as Coinbase) have introduced some pretty draconian measures for verifying your identity and this could be interpreted as the American government acting harshly as Coinbase mostly operates in America.

Most exchanges are OK when dealing with small amounts, especially the major normal exchanges (Coinbase is a tad unusual), like Bitstamp or Bitfinex.

You are right in saying that Bitcoin is seldom classed as a currency by governments.  Usually it is classed as an asset/property and due to that it is regulated less and arguably this makes it more convenient to do Bitcoin transactions.
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March 19, 2017, 03:24:35 AM
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indeed when talking about the legality of bitcoin seemed until now no country that gives legal certainty about bitcoin, even in some countries prohibit the use bitcoin, but along with the rapid development of bitcoin and the number of users in different countries is not impossible that one day bitcoin will become a second currency after a real currency.
during Bitcoin exchange transactions for altcoin no problem as well as to currency Bitcoin transactions are actually no trouble.
thus in bitcoin we can invest or trade and a lot of things we can do with the services of the existence of bitcoin
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March 27, 2017, 12:33:45 PM
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Anyway we come to the most critical point about the progress of bitcoin, in some countries decisions contrary to the government have increased use by bitcoin, but on the other hand has decreased membership for new companies.
No businessman will try to provide a service against the government, unless he wants to answer for various legal actions. Cases such as Coinbase clearly show how fragile bitcoin is as currency in regulatory issues.


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olubams
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March 27, 2017, 06:48:55 PM
 #6

So lately I've been looking a lot into the legalities of bitcoin and bitcoin exchanging and I haven't been able to find exactly everything I'm looking for on the matter and hoping someone on here can provide some insight that I may be overlooking. Me and a good friend of mine have been trying to look into starting a website in which we would do exchanges of bitcoin and other cryto-currency stock that we already have for mostly PayPal. With that, we've also been considering registering as an official LLC (Limited Liability Company) with the reasons being so we can efficiently handle the tax implications that come with bitcoin and for other official reasons to establish ourselves as exchangers. My biggest question would be this; if we were to proceed with this and registered as an LLC, would we be required to obtain Money Transmitter Licenses in every state that our clientele came from? I've also found articles explaining how areas of the government, like the IRS, consider bitcoin to be property, and not considered a currency because it is not backed like the USD. I also know that very well known websites, such as CoinBase have these licenses in every state that requires them, however, others, such as CEX.io and Kraken do not. I'm at a halt in what I can find right now, so any information would be greatly appreciated. 

What I can even say on the matter is that, what is obtainable in the area you are located because I am sure you are not the first person starting something like this where you are and if you are going global like CoinBase then you should know its not cheap because you will have to comply with a lot of rules that might even frustrate you out of existence. But I will suggest you go on a low scale below the radar on your locality because the legality around bitcoin is not clear in most countries...
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April 05, 2017, 10:04:46 AM
 #7

The legal status of Bitcoin exchange is very misty and it varies from country to country. Some countries prohibit the exchange of Bitcoins but on the other side, some countries give a legal or not too heavily regulated viewpoint to Bitcoins. Many countries have Bitcoins ATM machines and you can easily make a transaction.
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