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Author Topic: 2013-10-29 FT: New UK Bitcoin exchange to bar US clients  (Read 969 times)
Arvicco
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October 29, 2013, 12:50:25 AM
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http://www.ft.com/intl/cms/s/0/8223d270-3fe3-11e3-a890-00144feabdc0.html#axzz2j4FlcJyq

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New UK Bitcoin exchange to bar US clients
By Stephen Foley in New York

A new Bitcoin exchange launching in London on Tuesday will bar customers from the US, citing diverging regulatory approaches to the experimental digital currency.
Coinfloor, which is being pitched by its founders as a forum for high-frequency trading in Bitcoin, will open initially only to customers in the UK and the rest of Europe.
 
At the same time, the Bitcoin Foundation, which acts as a US trade group for virtual currency businesses and advocates for Bitcoin, is planning to set up a non-US headquarters, to reflect the possibility that the centre of gravity for innovation will shift abroad.
Mark Lamb, founder of Coinfloor, said his company had ambitions to move into the US eventually, but “legally it is not safe to open up to US customers in the beginning”.

He added: “Partly because of regulation, we think there is a larger market in the UK and in Europe and then in Asia.”
The UK’s Financial Conduct Authority has told Coinfloor it does not plan to regulate its business, which will offer a way for customers to swap British pounds for Bitcoin, in competition to existing European exchanges Bitstamp and BTC-E.
The UK agency has been monitoring the growth of Bitcoin but has decided it is not widely used and therefore does not currently require formal regulation.

An anonymous computer scientist created Bitcoin in 2009 as an alternative to fiat currencies. Transactions are conducted through a peer-to-peer network of computers, outside the traditional banking system, and the number of “coins” in circulation is capped.
The value of a Bitcoin has fluctuated wildly as speculators have debated whether it could be widely used as a currency for goods and services. Last week, Fortress Investment Group’s Michael Novogratz became the most senior finance industry figure to admit buying Bitcoin, saying it might become a useful payment mechanism in emerging markets.

Coinfloor, which is based in the City of London, has received seed investment from Passion Capital, an angel investment firm led by Stefan Glaenzer, former chairman of online radio pioneer Last.fm and a founder of auction site Ricardo.de. Another backer is Taavet Hinrikus, an early employee at Skype.

The exchange goes live for customer registrations at 9am on Tuesday with trading expected to start a week later.
Passion did not reveal the sum it invested in Coinfloor, but said its average investment is £190m.

Bitcoin exchanges operating in the US are required to register with the US Treasury and to implement anti-money laundering checks. Most states also require money transmission licences, though few have set out policies regarding virtual currencies.

Banks have been nervous about working with US exchanges while regulation remains unclear, and several Bitcoin entrepreneurs have received subpoenas from state authorities asking for information about whether Bitcoin can be used for money laundering.

Peter Vessenes, founder of Seattle-based CoinLab and chairman of the Bitcoin Foundation, said that innovation could shift out of the US to other jurisdictions.

”The way the regulatory dance works in the US, I think you will see more innovation elsewhere,” he said. “It is harder here.”


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October 29, 2013, 12:53:10 AM
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October 31, 2013, 07:38:17 AM
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why does it  bar US clients?
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October 31, 2013, 03:31:05 PM
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According to TechCrunch, Coinfloor is associated with a well known Nefario of GLBSE infamy, so personally I would not touch it with a 100 foot pole:

http://techcrunch.com/2013/10/29/coinfloor/

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Also of interest is that, while the UK startup is founded by Mark Lamb and Amadeo Pellicce, one of its team members is James McCarthy (aka Nefario) who was previously involved in Global Bitcoin Stock Exchange, which controversially shut down last October.

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