Why doesnt someone make a cash only exchange?

[t1000]

Can foreign exchange shops do bitcoin exchanging on the side?

Anyone can do Bitcoin exchanging if they're in compliance with local law.

So that's perfect then isn't it? Legal forex shop operators already have the relevant licenses for trading currencies. I seem to remember whenever I go into forex shops the sales are done in cash....

Trading and exchanging are two different things. In the US forex traders, the individuals, need to be registered with NFA, CFTC and the SEC. That would mean every Bitcoin user would need to register. Bitcoin would also need to be legally considered currency but currently it's not.

Well, bitcoin is either a currency or a commodity (I would say both). So if it is legally a currency, forex shops can buy and sell it to customers. If it is not, then forex shops can sell and refund it like a gift voucher, sales tax/VAT applies.

Of course, it could become a currency that is illegal to trade, or a contraband, but it is not yet.

[QuestionAuthority]

Can foreign exchange shops do bitcoin exchanging on the side?

Anyone can do Bitcoin exchanging if they're in compliance with local law.

So that's perfect then isn't it? Legal forex shop operators already have the relevant licenses for trading currencies. I seem to remember whenever I go into forex shops the sales are done in cash....

Trading and exchanging are two different things. In the US forex traders, the individuals, need to be registered with NFA, CFTC and the SEC. That would mean every Bitcoin user would need to register. Bitcoin would also need to be legally considered currency but currently it's not.

Well, bitcoin is either a currency or a commodity (I would say both). So if it is legally a currency, forex shops can buy and sell it to customers. If it is not, then forex shops can sell and refund it like a gift voucher, sales tax/VAT applies.

Of course, it could become a currency that is illegal to trade, or a contraband, but it is not yet.

It would be hard for me to believe we could come up with a loophole that the government couldn't close with a quick sweep of a pen.

[t1000]

Can foreign exchange shops do bitcoin exchanging on the side?

Anyone can do Bitcoin exchanging if they're in compliance with local law.

So that's perfect then isn't it? Legal forex shop operators already have the relevant licenses for trading currencies. I seem to remember whenever I go into forex shops the sales are done in cash....

Trading and exchanging are two different things. In the US forex traders, the individuals, need to be registered with NFA, CFTC and the SEC. That would mean every Bitcoin user would need to register. Bitcoin would also need to be legally considered currency but currently it's not.

Well, bitcoin is either a currency or a commodity (I would say both). So if it is legally a currency, forex shops can buy and sell it to customers. If it is not, then forex shops can sell and refund it like a gift voucher, sales tax/VAT applies.

Of course, it could become a currency that is illegal to trade, or a contraband, but it is not yet.

It would be hard for me to believe we could come up with a loophole that the government couldn't close with a quick sweep of a pen.

I agree.

I just don't see how they can do it without making random persecutions or making random laws that have other serious repercussions, like making cryptography illegal, or banning bartering altogether, or requiring trading to be carried out strictly in legal tender, i.e. no more gift vouchers.

[jojo69]

They may have the power, but they lack the authority.  Our duty is to resist.

[QuestionAuthority]

Can foreign exchange shops do bitcoin exchanging on the side?

Anyone can do Bitcoin exchanging if they're in compliance with local law.

So that's perfect then isn't it? Legal forex shop operators already have the relevant licenses for trading currencies. I seem to remember whenever I go into forex shops the sales are done in cash....

Trading and exchanging are two different things. In the US forex traders, the individuals, need to be registered with NFA, CFTC and the SEC. That would mean every Bitcoin user would need to register. Bitcoin would also need to be legally considered currency but currently it's not.

Well, bitcoin is either a currency or a commodity (I would say both). So if it is legally a currency, forex shops can buy and sell it to customers. If it is not, then forex shops can sell and refund it like a gift voucher, sales tax/VAT applies.

Of course, it could become a currency that is illegal to trade, or a contraband, but it is not yet.

It would be hard for me to believe we could come up with a loophole that the government couldn't close with a quick sweep of a pen.

I agree.

I just don't see how they can do it without making random persecutions or making random laws that have other serious repercussions, like making cryptography illegal, or banning bartering altogether, or requiring trading to be carried out strictly in legal tender, i.e. no more gift vouchers.

Don't underestimate the stupidity of bureaucrats.

[Anon136]

not a shop. im not talking about a store. im talking about something like mtgox or bitstamp. except inorder to avoid so many of the regulations they only take cash. since they would never touch the banking system in anyway i dont think they would even be under the jurisdiction of FINCEN and i dont think they would have to comply with AML regulations at all.

yeah a shop would be a regulation nightmare at this stage, until fincen or whoever decides what they want to do with bitcoin i guess a shop is not v practical.

Even if you have an online xchange that only takes cash, 1. where would people come to deposit cash ? like u meet them in the street and stuff ? , 2. Even if you have like a shop or office, end of the day the cash will go to your bank account (unless u put it under your pillow but that doesn't make sense) lot of cash inflow to your account will raise alarms and then before you know it swat is raiding your home trashing everything

the people who ran the exchange would work out of an office. that office would have a front desk with a cashier.

no bank account. just a very large very secure safe with cash in it. perhaps you could buy up a building that used to be a bank.

[t1000]

not a shop. im not talking about a store. im talking about something like mtgox or bitstamp. except inorder to avoid so many of the regulations they only take cash. since they would never touch the banking system in anyway i dont think they would even be under the jurisdiction of FINCEN and i dont think they would have to comply with AML regulations at all.

yeah a shop would be a regulation nightmare at this stage, until fincen or whoever decides what they want to do with bitcoin i guess a shop is not v practical.

Even if you have an online xchange that only takes cash, 1. where would people come to deposit cash ? like u meet them in the street and stuff ? , 2. Even if you have like a shop or office, end of the day the cash will go to your bank account (unless u put it under your pillow but that doesn't make sense) lot of cash inflow to your account will raise alarms and then before you know it swat is raiding your home trashing everything

the people who ran the exchange would work out of an office. that office would have a front desk with a cashier.

no bank account. just a very large very secure safe with cash in it. perhaps you could buy up a building that used to be a bank.

If there was an earthquake then a fire, they can embed a message in a transaction to themselves on the blockchain: “Building Destroyed, Vault Intact, Credit Unaffected.”

[BlueNote]

As I understand it, any business having anything to do with exchanging BTC for USD would be considered a "money transmitter," so they'd have to register with FINCEN. I'm not sure that this is the killer though. The killer seems to be that you'd also have to register in every state (that your customers would come from). So it seems you could open up a *local* Bitcoin-for-Cash exchange pretty much anywhere as long as you register with FINCEN and your state (and as long as you don't take or send money to another state).

I just read that SC and NM do not require anything. Other states may require you to post a rather large bond.

So the local cash business actually seems do-able in many places even with the regulatory requirements.

[coins101]

Local money transmitters are an ideal candidate. The problem is they would worry about banks closing down their accounts.

Local transmitters are already under tight scrutiny by their banks as the banks just don't want anything to do with bitcoin because they are concerned they may end up getting fined and criminal charges.

A clear mandate from governments that bitcoin is ok to trade with and there are thousands of options from existing money transmitters, pay-day-loan operators, to ATMs, to retail shops.

[jojo69]

I really like the idea though, weapons check service on the way in, cashier in the booth with bars, couple guys with H&K MP5s hanging out in the corner...

"Yes sir, that does count as $100,000, would you like that all in BTC today or credit on the exchange?  Oh, and before I forget, this month we are giving out a free Trezor for each deposit over $25,000"

[empoweoqwj]

Can foreign exchange shops do bitcoin exchanging on the side?

Anyone can do Bitcoin exchanging if they're in compliance with local law.

So that's perfect then isn't it? Legal forex shop operators already have the relevant licenses for trading currencies. I seem to remember whenever I go into forex shops the sales are done in cash....

Forex shops have licenses and deal with legal currencies. Bitcoin is not a legal currency in the US

[exapted]

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

[Anon136]

I really like the idea though, weapons check service on the way in, cashier in the booth with bars, couple guys with H&K MP5s hanging out in the corner...

"Yes sir, that does count as $100,000, would you like that all in BTC today or credit on the exchange?  Oh, and before I forget, this month we are giving out a free Trezor for each deposit over $25,000"

and dont forget free leather suit cases for cash withdrawals of >250,000

something tells me this idea is totally legally legit but if you actually tried to do it you would find yourself going from zero to boot on your face in about 12 seconds.

[empoweoqwj]

When I exchange money at a money changer counter, I am not asked for ID, so why can't money changers do the same with bitcoin?

In a country where bitcoin is not considered a currency, and where there are no regulations requiring ordinary businesses to obtain ID of customers who pay via bank deposit or other indirect means, then deposits can be anonymous because AML / KYC regulations might not apply. I'm not sure about that but I'm looking into it.

A money changer deals with currencies. Bitcoin is not a currency in virtually every country on the planet at the moment. That's why money changers can't "do the same" with bitcoin.

[Nagle]

If you could do more with Bitcoins, retail outlets like "payday loan" and "we buy gold" businesses might also buy and sell them.

The volatility of Bitcoins is so high, though, that a business like that can't afford to hold Bitcoins for more than a few minutes. Currency exchange shops have the same problem, but unless a currency is in severe turmoil, cashing out once a day is usually enough.

[tclo]

not a shop. im not talking about a store. im talking about something like mtgox or bitstamp. except inorder to avoid so many of the regulations they only take cash. since they would never touch the banking system in anyway i dont think they would even be under the jurisdiction of FINCEN and i dont think they would have to comply with AML regulations at all.

You are pretty much totally wrong about all of this.  FinCen would come down hard on you if you tried this.

[empoweoqwj]

not a shop. im not talking about a store. im talking about something like mtgox or bitstamp. except inorder to avoid so many of the regulations they only take cash. since they would never touch the banking system in anyway i dont think they would even be under the jurisdiction of FINCEN and i dont think they would have to comply with AML regulations at all.

You are pretty much totally wrong about all of this.  FinCen would come down hard on you if you tried this.

I agree. Money is money whatever form it is in. Same rules and regulations apply. Money laundering didn't start with wire transfers you know, it started with cold hard cash.

[crazy_rabbit]

Well, besides the fact that you have basically described the Hawala system, which may or may not be the funder of global terrorism (I mean, what good idea ISNT funding global terrorism in the eyes of the government these days), you are also kind of describing Me, You, Email, a bag of cash and starbucks.

Or localbitcoins.com :-)

[Soros Shorts]

Or localbitcoins.com :-)

Yes, I don't understand why everyday someone comes up with a proposal for some BTC-cash exchange mechanism that has already been (more or less) solved by localbitcoins.com.

Why the resistance to using localbitcoins?

[empoweoqwj]

Because one shop would have  to spend bucketloads of money complying with anti-money laundering regulations. Bitcoin ATMs solve the problem in a much more economical way.

What makes you think that FinCEN is going to consider Bitcoin ATMs to be exempt from AML?  Believe me, they won't.  That's why it's been so hard to get them going.

But I agree that cash businesses also must comply with AML if they want to stay out of jail, BUT cash businesses don't have to put up with banks cutting them off at every turn.  And if we develop our own clearing houses....

I believe there are bitcoin ATM machines planned for at least two cities in America soon. I might be wrong.