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Author Topic: What is the best country to start an exchange in?  (Read 2861 times)
RodeoX
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May 30, 2013, 04:44:03 PM
 #21

Malta. For the win!  Wink

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May 30, 2013, 04:45:57 PM
 #22

Russia, North Korea or Nigeria.
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May 30, 2013, 05:07:37 PM
 #23

Start in your own country which for a United States entrepreneur means the United States. Pick a large state say for example California and register there, and federally. Then limit your market to that state. This keeps the initial compliance costs low to start. Then expand first to other states and the internationally as the business grows.

The is in fact the model that Virtex in using very successfully in Canada. They limit their market to Canadian Citizens living in Canada this keeps the cost of regulatory compliance under control.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
monsterer
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May 30, 2013, 05:59:14 PM
 #24

If you want to trade USD in this exchange it doesn't matter where its physically located you will need to comply with all the same regulations you would have being located in the US.
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May 30, 2013, 06:42:24 PM
 #25

What is needed is exchanges in all countries that arbitrages between them. If one exchange goes bust or something else happens, there are still a network of exchanges. You might use your local exchange only to put fiat in/out of the system if you don't trust them too much, and keep your BTC's in your wallet or at another exchange that you trust more.

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May 30, 2013, 06:47:12 PM
 #26

If you want to trade USD in this exchange it doesn't matter where its physically located you will need to comply with all the same regulations you would have being located in the US.

This is not true. Ever heard of Eurodollars http://en.wikipedia.org/wiki/Eurodollar for example. What does apply is for an exchange doing business outside the US is, US citizens, which is why many financial institutions simply deal with this regulatory issue by refusing to do business with US citizens even if those individuals reside out side of the US.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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May 30, 2013, 07:04:38 PM
 #27

This is not true. Ever heard of Eurodollars http://en.wikipedia.org/wiki/Eurodollar for example. What does apply is for an exchange doing business outside the US is, US citizens, which is why many financial institutions simply deal with this regulatory issue by refusing to do business with US citizens even if those individuals reside out side of the US.

You're right, I should have added that Smiley
marketermac
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May 30, 2013, 08:27:43 PM
 #28

Renounce US citizenship and start the exchange in Costa Rica. Just never travel to any countries that extradite.

Doesn't it take 2 years to become a resident in Costa Rica? If you don't have a US citizenship in the meanwhile....what exactly happens?

Also, would just being a resident there be enough to get you a Costa Rica passport? How would you ever leave?
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May 30, 2013, 10:14:34 PM
 #29

BitBox.mx is another compliant exchange in the US, though they are just now working to get solvent.

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May 30, 2013, 10:41:15 PM
 #30

Your best bet would be to convince these guys:

http://www.nasdaq.com/symbol/slv

to create a bitcoin ETF

http://en.wikipedia.org/wiki/Exchange-traded_fund

They are required to purchase the same number of ounces of silver for each share

So if that SLV is trading at 25 dollars,  Silver is roughly worth 25 dollars.

Now if that happened for Bitcoin,  everyone's 401k plan could buy into that,  and force that ETF to buy massive amounts of bitcoins to keep it funded.

That's how you go from $130 to $130,000

Starting an exchange now is like putting a gun to your head.   There are so many regulations designed to keep you out of that type of business.

The ETF idea is a non-starter... here's a long discussion.

"So hey. I structure ETFs for a very large company.

A couple of three things: 1) The biggest issue you're going to run into is related to the concept of exemptive relief- that is, ETC (formerly a company called Faithshares, kind of funny) does not have the requisite permission from the SEC to launch non-index based products. Don't worry about making a bitcoin index, the SEC will only allow securities-based indices. Bitcoins, like all currencies, are not actually securities. 2) The best route for you would be a commodity pool built through the 19b-4 process, whereby you partner with an exchange to request permission from the SEC. Best case scenario this will take at least six months to get through, but honestly, you would not get through. 3) Seed is the last thing you should worry about. Lead market makers/IBs will put this up, provided you have (very) strong relationships with them. 4) Ok, serious here. The biggest issue is the lack of arbitragibility (not a word, but bear with me) between the ETF and the underlying bitcoins. This market is pathetically small and insanely illiquid. It simply is not a mature enough space to package into a product."

http://www.reddit.com/r/Bitcoin/comments/19hxuv/bitcoin_etf/

There are 2 other approaches to this...

(1)  Start a hedge fund with accredited investors. One exits in Malta. Google it.

(2)  Reverse takeover a junior company on the TSX or London Junior or Ireland...
But the Exchange MUST be reputable...
Use all the invested capital to buy/trade BTC...
But you will have to pay Management + Admin costs in the $500K range...
So you would need $5-10 million for this.



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May 30, 2013, 11:14:51 PM
 #31

Renounce US citizenship and start the exchange in Costa Rica. Just never travel to any countries that extradite.

Such as Costa Rica?

http://en.wikipedia.org/wiki/List_of_United_States_extradition_treaties

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May 30, 2013, 11:20:45 PM
 #32

The swiss do it the best ask Fedor lol

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May 31, 2013, 07:05:41 AM
 #33

New Zealand!

Solid isolated economy, top ranked for business/entrepreneurness, current prime minister was a very successful currency trader before taking office (even donates his salary to charity). Kim.Com could even back it just to stir things up
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May 31, 2013, 07:48:04 AM
 #34

Are there any countries besides the US, Canada and the UK that have attempted to regulate, or have mentioned, Bitcoin at all?

Anything in Europe? China? Japan?


In October 2012, the ECB defined Bitcoin as a virtual currency with a bidirectional flow. The ECB investigated Bitcoin in relation to risk for price and financial stability in the Euro zone. However, it underlines the reputation risk of Central Banks, if security incidents involve virtual currencies. For this reason, according to the ECB, transactions with virtual currencies should be under Central Bank responsibility. Despite the ECB definition, European legislation is far from been clear. Maybe Euro countries are waiting for Germany... Wink

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May 31, 2013, 07:58:23 AM
 #35

Cyprus definitely!  You don't even need to worry about overflowing funds, they do a haircut for you when you reach 100k Euros Smiley
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May 31, 2013, 10:09:00 AM
 #36

China

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May 31, 2013, 01:10:13 PM
 #37

Launch a satellite which anyone can communicate with. Put an exchange server on it. Throw the shut down key away.

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May 31, 2013, 01:39:49 PM
 #38

Canada have been making friendly noises recently.

Alternatively India, for the business opportunity, beyond black market trading, remittance is really the killer AP ATM.
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May 31, 2013, 02:34:50 PM
 #39

Finland
RodeoX
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May 31, 2013, 02:47:23 PM
 #40

I thought i already ended this thread.  Grin

This question was asked to a panel of lawyers at bitcoin2013. They said Malta is their best guess about the best jurisdiction to start an exchange. Followed, I believe, by Iceland. 
They also mentioned places seeking to be financial hubs, such as Hong Kong, Dubai, etc. 

The gospel according to Satoshi - https://bitcoin.org/bitcoin.pdf

Free bitcoin in ICELAND - https://bitcointalk.org/index.php?topic=1610684
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