[ANN] KRAKEN.COM - US-based Exchange w/ Margin Trading - OPEN BETA

[btcx]

Our general counsel's interview with Adam Levine was posted today!  Starts at 12:27:  http://letstalkbitcoin.com/post/52402394143/lets-talk-bitcoin-episode-014-in-search-of

[coinator]

Nice to see that you are back, hope that your site development is running well. By the way, I have not received your response for a very long time, could you please reply back to me? Thanks.

[btcx]

Nice to see that you are back, hope that your site development is running well. By the way, I have not received your response for a very long time, could you please reply back to me? Thanks.

I'm sorry.. maybe I missed the message.  Please just send me a PM.

[mr_random]

In light of Fincen's recent guidance (http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html) kraken.com would clearly fall under the definition of a money service business and more specifically an exchanger. Therefore I ask:

1. Is kraken.com registered as a money service business?
2. Does the company have the necessary money transmission licenses for the 48 states of the U.S which require them?

The guidance indicates operating an exchange to those 48 states whilst not meeting 1 and 2 is in violation of US law (even if the exchange is not physically located in the US, but merely serves US customers).

[btcx]

In light of Fincen's recent guidance (http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html) kraken.com would clearly fall under the definition of a money service business and more specifically an exchanger. Therefore I ask:

1. Is kraken.com registered as a money service business?
2. Does the company have the necessary money transmission licenses for the 48 states of the U.S which require them?

The guidance indicates operating an exchange to those 48 states whilst not meeting 1 and 2 is in violation of US law (even if the exchange is not physically located in the US, but merely serves US customers).

You're right!  Like MtGox, BitStamp, Coinbase, etc., once launched we'd qualify as a money transmitter in most US states which means we'd require licenses (or an exemption) in each US state in which we have a customer.  Most people believe that it's enough to be registered federally, or to locate your business outside the US but, as you've pointed out, if you serve US customers, wherever your business is domiciled, you need to be licensed in the state(s) in which those customers reside.  We'll reveal our US coverage at the time of launch.  Obviously, it'd be irresponsible to put customer funds at risk of seizure by operating illegally and that is not something we intend to do.

[mr_random]

In light of Fincen's recent guidance (http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html) kraken.com would clearly fall under the definition of a money service business and more specifically an exchanger. Therefore I ask:

1. Is kraken.com registered as a money service business?
2. Does the company have the necessary money transmission licenses for the 48 states of the U.S which require them?

The guidance indicates operating an exchange to those 48 states whilst not meeting 1 and 2 is in violation of US law (even if the exchange is not physically located in the US, but merely serves US customers).

You're right!  Like MtGox, BitStamp, Coinbase, etc., once launched we'd qualify as a money transmitter in most US states which means we'd require licenses (or an exemption) in each US state in which we have a customer.  Most people believe that it's enough to be registered federally, or to locate your business outside the US but, as you've pointed out, if you serve US customers, wherever your business is domiciled, you need to be licensed in the state(s) in which those customers reside.  We'll reveal our US coverage at the time of launch.  Obviously, it'd be irresponsible to put customer funds at risk of seizure by operating illegally and that is not something we intend to do.

Cool. To clarify, would you have the necessary money transmission licenses before you start serving US customers or are you going to risk it and just start serving US customers with only a money service business registration and no licenses? I'm sure your company has intentions to get the licenses at some stage, the important thing is whether you start accepting US deposits before you get them.

[btcx]

In light of Fincen's recent guidance (http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html) kraken.com would clearly fall under the definition of a money service business and more specifically an exchanger. Therefore I ask:

1. Is kraken.com registered as a money service business?
2. Does the company have the necessary money transmission licenses for the 48 states of the U.S which require them?

The guidance indicates operating an exchange to those 48 states whilst not meeting 1 and 2 is in violation of US law (even if the exchange is not physically located in the US, but merely serves US customers).

You're right!  Like MtGox, BitStamp, Coinbase, etc., once launched we'd qualify as a money transmitter in most US states which means we'd require licenses (or an exemption) in each US state in which we have a customer.  Most people believe that it's enough to be registered federally, or to locate your business outside the US but, as you've pointed out, if you serve US customers, wherever your business is domiciled, you need to be licensed in the state(s) in which those customers reside.  We'll reveal our US coverage at the time of launch.  Obviously, it'd be irresponsible to put customer funds at risk of seizure by operating illegally and that is not something we intend to do.

Cool. To clarify, would you have the necessary money transmission licenses before you start serving US customers or are you going to risk it and just start serving US customers with only a money service business registration and no licenses? I'm sure your company has intentions to get the licenses at some stage, the important thing is whether you start accepting US deposits before you get them.

It would be illegal, punishable criminally and greatly reduce our chances of being granted licenses later if we were to begin operating without the necessary US state money transmitter licenses.  I think it's great that some businesses are willing to put their necks on the line to serve Bitcoin adoption but it's not a risk we're willing to take for ourselves nor your money.  We will not serve those customers we cannot legally serve.  For illegal exchanges, you have the three options mentioned above, and many more.

[mr_random]

In light of Fincen's recent guidance (http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html) kraken.com would clearly fall under the definition of a money service business and more specifically an exchanger. Therefore I ask:

1. Is kraken.com registered as a money service business?
2. Does the company have the necessary money transmission licenses for the 48 states of the U.S which require them?

The guidance indicates operating an exchange to those 48 states whilst not meeting 1 and 2 is in violation of US law (even if the exchange is not physically located in the US, but merely serves US customers).

You're right!  Like MtGox, BitStamp, Coinbase, etc., once launched we'd qualify as a money transmitter in most US states which means we'd require licenses (or an exemption) in each US state in which we have a customer.  Most people believe that it's enough to be registered federally, or to locate your business outside the US but, as you've pointed out, if you serve US customers, wherever your business is domiciled, you need to be licensed in the state(s) in which those customers reside.  We'll reveal our US coverage at the time of launch.  Obviously, it'd be irresponsible to put customer funds at risk of seizure by operating illegally and that is not something we intend to do.

Cool. To clarify, would you have the necessary money transmission licenses before you start serving US customers or are you going to risk it and just start serving US customers with only a money service business registration and no licenses? I'm sure your company has intentions to get the licenses at some stage, the important thing is whether you start accepting US deposits before you get them.

It would be illegal, punishable criminally and greatly reduce our chances of being granted licenses later if we were to begin operating without the necessary US state money transmitter licenses.  I think it's great that some businesses are willing to put their necks on the line to serve Bitcoin adoption but it's not a risk we're willing to take for ourselves nor your money.  We will not serve those customers we cannot legally serve.  For illegal exchanges, you have the three options mentioned above, and many more.

Great work. You're a credit to the community. It gives me confidence in the future of Bitcoin that there are finally exchanges that are going to do everything by the book and to be frank people don't realise how desperately we need this. A lot of exchanges spin similar lines but when you get down to the nitty gritty of it all, they don't have the licenses.

[S3052]

In light of Fincen's recent guidance (http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html) kraken.com would clearly fall under the definition of a money service business and more specifically an exchanger. Therefore I ask:

1. Is kraken.com registered as a money service business?
2. Does the company have the necessary money transmission licenses for the 48 states of the U.S which require them?

The guidance indicates operating an exchange to those 48 states whilst not meeting 1 and 2 is in violation of US law (even if the exchange is not physically located in the US, but merely serves US customers).

You're right!  Like MtGox, BitStamp, Coinbase, etc., once launched we'd qualify as a money transmitter in most US states which means we'd require licenses (or an exemption) in each US state in which we have a customer.  Most people believe that it's enough to be registered federally, or to locate your business outside the US but, as you've pointed out, if you serve US customers, wherever your business is domiciled, you need to be licensed in the state(s) in which those customers reside.  We'll reveal our US coverage at the time of launch.  Obviously, it'd be irresponsible to put customer funds at risk of seizure by operating illegally and that is not something we intend to do.

Cool. To clarify, would you have the necessary money transmission licenses before you start serving US customers or are you going to risk it and just start serving US customers with only a money service business registration and no licenses? I'm sure your company has intentions to get the licenses at some stage, the important thing is whether you start accepting US deposits before you get them.

It would be illegal, punishable criminally and greatly reduce our chances of being granted licenses later if we were to begin operating without the necessary US state money transmitter licenses.  I think it's great that some businesses are willing to put their necks on the line to serve Bitcoin adoption but it's not a risk we're willing to take for ourselves nor your money.  We will not serve those customers we cannot legally serve.  For illegal exchanges, you have the three options mentioned above, and many more.

Great work. You're a credit to the community. It gives me confidence in the future of Bitcoin that there are finally exchanges that are going to do everything by the book and to be frank people don't realise how desperately we need this. A lot of exchanges spin similar lines but when you get down to the nitty gritty of it all, they don't have the licenses.

>btcx
sounds interesting
by when do you think you will start?

[btcx]

Great work. You're a credit to the community. It gives me confidence in the future of Bitcoin that there are finally exchanges that are going to do everything by the book and to be frank people don't realise how desperately we need this. A lot of exchanges spin similar lines but when you get down to the nitty gritty of it all, they don't have the licenses.

We've got no shortage of unlicensed exchanges, right?  What we really need to take bitcoin to the next level is an exchange that people can trust to act predictably and in accordance with the law when it comes to handling their money.  We've spent so much on building the best exchange technically that it'd be a mistake to risk it all over some solvable compliance issues.  It's difficult and it's expensive and it takes time but the market is there and somebody's gotta do it.

>btcx
sounds interesting
by when do you think you will start?

As soon as we can.  I think we'll be able to launch in at least some jurisdictions within 1 month.

[JohnSy]

In light of recent events, we just wanted you guys to know that we’re on the motherfucker.  Go back in there, chill out and wait for the cavalry which should be coming directly:  https://beta.kraken.com

Target launch for real trading is mid next week.  Beta accounts are auto-funded with funny money and will be wiped at launch.  Actual deposits/withdrawals are disabled.  Address support issues to beta-support@<domain>

sleek looking site

[wonkytonky]

are you guys are going to route with other exchanges.. ?  (gox)
the reason why i left bitfinex is because the low volume... since they left gox .
cant even trade a good 100btc withoutout  massive slippage ..

[Dargo]

are you guys are going to route with other exchanges.. ?  (gox)
the reason why i left bitfinex is because the low volume... since they left gox .
cant even trade a good 100btc withoutout  massive slippage ..

No, but we'll have good liquidity. I guess you can see if it meets your needs after we launch.

[codesuela]

hey
one question:
so leveraged positions aren't actually executed right? if i short 50 bitcoins with a 1:5 leverage those aren't actually sold on the market driving the price down or up respectively with a long position, correct?

[Dargo]

hey
one question:
so leveraged positions aren't actually executed right? if i short 50 bitcoins with a 1:5 leverage those aren't actually sold on the market driving the price down or up respectively with a long position, correct?

If I understand what you are asking, the answer is no. As far as your account goes, when you go long 50 BTC/USD using leverage, no currency conversion takes place for your account. You simply have a long trading position in the BTC/USD currency pair. But in order for you to open this position 50 BTC are bought with USD on the exchange. You don't own those 50 BTC though, because you have borrowed the funds to buy them.

[codesuela]

But in order for you to open this position 50 BTC are bought with USD on the exchange. You don't own those 50 BTC though, because you have borrowed the funds to buy them.

but those BTC are actually bought on the market and influence the actual market price. it is not a "theoretical" transaction ie a contract for payment of the difference where the order is never executed on the market

[Dargo]

But in order for you to open this position 50 BTC are bought with USD on the exchange. You don't own those 50 BTC though, because you have borrowed the funds to buy them.

but those BTC are actually bought on the market and influence the actual market price. it is not a "theoretical" transaction ie a contract for payment of the difference where the order is never executed on the market

Correct. Real buying and selling on happens on the market but leverage trading in one's account means only opening or closing a long or short currency pair position (no currency conversion in one's account).

[wonkytonky]

If there's one thing i'd be highly wish for ..

to be able to edit an order .. like moving stoploss or take profit trigers.. to other price levels..  


eg:

buy long at 109  and stoploss at 108 today:    price goes up to 115 stable.. ..   but i'm feeling it will be going up for some more in the future..
then i want to adjust the stoploss to a higher price.. like 113 ..  

maybe i'm not doing things right.. but it seems not adjustable for now in beta.

regards

[Dargo]

If there's one thing i'd be highly wish for ..

to be able to edit an order .. like moving stoploss or take profit trigers.. to other price levels..  


eg:

buy long at 109  and stoploss at 108 today:    price goes up to 115 stable.. ..   but i'm feeling it will be going up for some more in the future..
then i want to adjust the stoploss to a higher price.. like 113 ..  

maybe i'm not doing things right.. but it seems not adjustable for now in beta.

regards

Something like a "cancel and replace" option for orders would be handy. I'll check with the devs on this. My guess is that it's something we'll have eventually, but how soon I don't know.

[wonkytonky]

If there's one thing i'd be highly wish for ..

to be able to edit an order .. like moving stoploss or take profit trigers.. to other price levels..  


eg:

buy long at 109  and stoploss at 108 today:    price goes up to 115 stable.. ..   but i'm feeling it will be going up for some more in the future..
then i want to adjust the stoploss to a higher price.. like 113 ..  

maybe i'm not doing things right.. but it seems not adjustable for now in beta.

regards

Something like a "cancel and replace" option for orders would be handy. I'll check with the devs on this. My guess is that it's something we'll have eventually, but how soon I don't know.

or just editable fields in the current order thats active, would make more sense to me..  no need to fully replace with a new order ..
then again. i dont know how you guys. did your developments so..   i'm guessing it's not that easy as it looks to make some fields editable in active order.

good luck