License to Sell Bitcoin in Person as Oppose To Online Exchange?

[jerry0]

So I heard a few stories a while back where ppl got in trouble and arrested and even sent to jail because they were selling bitcoin to other people without a license.  Can someone explain this?  So basically if you sell bitcoin in person to ppl for cash or any types of money payment whether its bank wire or cash in bank deposit... you need a license but only if you do a lot of transactions?  But if you sell btc to a few ppl several times a year only, you don't?  Example imagine a few times you sell a few thousand worth of btc to a few friends throughout the year... say you did it 5 times and it was for like 8k total.  That you don't?



But if you were just buying/selling btc on exchanges like coinbase, gemini, binance, bittrex, bitstamp etc... you don't?  Can someone explain this to me?  I never bought/sold btc in person... only done in the online exchange but I don't seem to understand the logic behind this.  What is the difference if you are buying/selling btc in person to people or to ppl online as oppose to doing it in an exchange if you are paying taxes on it?  Is there something im missing here?  I mean the only reason someone would buy/sell btc in lbc and sites like that is because they are paying less for btc at a discount or selling btc to someone at a premium price like a few percentage above market?

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[Philipma1957cellphone]

Well every country has different rules.

PLUS THE USA has 50 states with different rules. So explaining the why is not easy.

[ranochigo]

It's specific to your local regulations and the rules differs for different jurisdiction.

Basically, for some places, they have pretty strict laws about money transmitter and those exchanging fiat to crypto (or vice versa). Some states have a certain threshold for users to register themselves as a money transmitter and for them to identify any suspicious activities to combat money laundering and terrorist financing. The transaction volume needed differs from each jurisdiction so refer to your local laws.

Bitcoin exchanges are usually registered money transmitter who have a license to conduct their business activities. They are legally obliged to flag out and report any suspicious activities, as well as having a KYC system.

[Shimmiry]

~

Do you have any proofs linking to such events??

Some countries have their different laws with regards to selling and buying cryptocurreny, though it may sound like they control it, they don't. Some just prefer legal transactions in everything that has something to do with money. But if they would transact in a local place or their Bitcoins was from illegal activities or was used for anything illegal, then it would be a reason for them to get arrested.

And if you are pertaining to online exchanges, there are no rules in most countries that prohibits such actions, as most crypto are transferred with privacy and transparency.

[Fundamentals Of]

Where are you from? Countries have different domestic laws.

But I don't think any country is extremely strict and tight that they would require a license from an individual from selling a Bitcoin not for business but only for wanting to have some cash.

If that is for business, you should get a license but if it's just a mere P2P exchange which happens only a few times within a year, I don't think you will be required a license. I don't think the authorities would even notice your transaction.

[pooya87]

So I heard a few stories a while back where ppl got in trouble and arrested and even sent to jail because they were selling bitcoin to other people without a license.

the stories i have seen were mainly about the scale of their operation not just about them selling bitcoin. these people that i've seen were basically running a business and making a lot of money by trading bitcoin on a daily basis and making a lot of money while not paying any taxes.
otherwise i have not yet seen anyone getting in trouble by buying/selling bitcoin P2P a couple of times.

to know more you must consult a lawyer who is familiar with your country's law specifically related to cryptocurrencies, running a small business and money laundry.

[ArcheAdvertising]

It all depends on the country where you are, the rules vary a lot. But personally I like to buy / sell online more since it is much safer, I remember that 2 years ago I think that when BTC was reaching its historical maximum I sold 1 BTC for 15K USD and when I left the mall some guys robbed me and took my money. money obviously I'm sure it was in complicity with the person who bought my BTC, but in my country, just as there are no laws that go against the sale of BTC, there are no laws that go against the theft of BTC: D so it's kind of screwed up.

[AjithBtc]

Licensing is based on the local regulations, people getting arrested weren't for selling bitcoin. In most cases the arrests were for the reason of money laundering and making illegal transactions in large volume. This takes place mostly with the local currency exchangers, who register it as a business for money exchange and involve on money laundering.

[rexxarofmoknathal]

It's specific to your local regulations and the rules differs for different jurisdiction.

Basically, for some places, they have pretty strict laws about money transmitter and those exchanging fiat to crypto (or vice versa). Some states have a certain threshold for users to register themselves as a money transmitter and for them to identify any suspicious activities to combat money laundering and terrorist financing. The transaction volume needed differs from each jurisdiction so refer to your local laws.

Bitcoin exchanges are usually registered money transmitter who have a license to conduct their business activities. They are legally obliged to flag out and report any suspicious activities, as well as having a KYC system.

I agree, its all to do with the jurisdictions from different states. And although it doesn't make a whole lot of sense, it doesn't have to be, as since did any regulations (with them differing so drastically) made any sense? In this case, many people would go either in the states where these laws aren't that ridiculous or use exchanges. Exchanges are partially becoming the norm nowadays anyway, so this law does't really stop people from entering/gaining access to cryptocurrency - it only makes it harder but not impossible.

[cryptoaddictchie]

Licensing is based on the local regulations, people getting arrested weren't for selling bitcoin. In most cases the arrests were for the reason of money laundering and making illegal transactions in large volume.

Let say the guys OP were talking about were arrested. Based on local rule of their government probably this is their regulation. If its stipulated on their law and someone got caught that someone, has no right to resist arrest isnt it? But I doubt that there is a country that would be so strict as this not to even sell or buy bitcoin for not having license. Bitcoin is a free digital currency created for peer to peer. That country brealing the idea of Satoshi, but of course its on their people to follow or not.

[GeorgeJohn]

So I heard a few stories a while back where ppl got in trouble and arrested and even sent to jail because they were selling bitcoin to other people without a license.  Can someone explain this?  So basically if you sell bitcoin in person to ppl for cash or any types of money payment whether its bank wire or cash in bank deposit... you need a license but only if you do a lot of transactions?  But if you sell btc to a few ppl several times a year only, you don't?  Example imagine a few times you sell a few thousand worth of btc to a few friends throughout the year... say you did it 5 times and it was for like 8k total.  That you don't?



But if you were just buying/selling btc on exchanges like coinbase, gemini, binance, bittrex, bitstamp etc... you don't?  Can someone explain this to me?  I never bought/sold btc in person... only done in the online exchange but I don't seem to understand the logic behind this.  What is the difference if you are buying/selling btc in person to people or to ppl online as oppose to doing it in an exchange if you are paying taxes on it?  Is there something im missing here?  I mean the only reason someone would buy/sell btc in lbc and sites like that is because they are paying less for btc at a discount or selling btc to someone at a premium price like a few percentage above market?

I have not heard that before that people got arrested because of selling of bitcoin without license,
This issue is new to me,so if I may ask does it mean people can't sell bitcoin or buy bitcoin because their have know license to operates.
Because since I noticed what is bitcoin I have been transacting bitcoin with know obstruction or bridge to my transaction.

[arwin100]

So I heard a few stories a while back where ppl got in trouble and arrested and even sent to jail because they were selling bitcoin to other people without a license.  Can someone explain this?  So basically if you sell bitcoin in person to ppl for cash or any types of money payment whether its bank wire or cash in bank deposit... you need a license but only if you do a lot of transactions?  But if you sell btc to a few ppl several times a year only, you don't?  Example imagine a few times you sell a few thousand worth of btc to a few friends throughout the year... say you did it 5 times and it was for like 8k total.  That you don't?



But if you were just buying/selling btc on exchanges like coinbase, gemini, binance, bittrex, bitstamp etc... you don't?  Can someone explain this to me?  I never bought/sold btc in person... only done in the online exchange but I don't seem to understand the logic behind this.  What is the difference if you are buying/selling btc in person to people or to ppl online as oppose to doing it in an exchange if you are paying taxes on it?  Is there something im missing here?  I mean the only reason someone would buy/sell btc in lbc and sites like that is because they are paying less for btc at a discount or selling btc to someone at a premium price like a few percentage above market?

This happenings must be published if this is true but I don' think it really needed to have a license nor depends on the country where the said person belongs, maybe you should provid a supporting articles and place on which the incident happen so that people here can give there opinions which tackling the correct answer on the topic. But as I see it for now its just a hearsay since so far I never read a person got jailed for doing that stuff.

[Kelvinid]

I agreed to the replies above, it certainly depends on your jurisdiction and how your local authorities treated Bitcoin. I don't think that was a big concern this time so we are free to use Bitcoin and even other cryptos. And I don't think it was a threat for us either but it is all about how transactions work.

We have heard that arrest isn't only about having a license to sell but because of their illegal transactions that caught attention to the authorities. For more than a decade that Bitcoin existed, I'd never heard that issues happening everywhere, it only a case that some got caught because they used it for illegalities. Though we have that LICENSE, if we are using it illegally still it brought us into arrest.

[Slow death]

you should notice the following:

coinbase is in the USA so if in your country you don't have bitcoin laws and they only allow you to buy and sell bitcoin at your own risk, then you can buy and sell bitcoin on international exchanges like coinbase and Binance ando other, but if you want to sell bitcoin in your country to someone else from your country you will need a license as with any money sale and purchase service that is regulated by central banks. Consult the laws of your country, but in my country Is how things work

[VanityWallets2015]

I agreed to the replies above, it certainly depends on your jurisdiction and how your local authorities treated Bitcoin. I don't think that was a big concern this time so we are free to use Bitcoin and even other cryptos. And I don't think it was a threat for us either but it is all about how transactions work.

We have heard that arrest isn't only about having a license to sell but because of their illegal transactions that caught attention to the authorities. For more than a decade that Bitcoin existed, I'd never heard that issues happening everywhere, it only a case that some got caught because they used it for illegalities. Though we have that LICENSE, if we are using it illegally still it brought us into arrest.

I totally agree with you. It is certainly due to some local jurisdictions in their region.
And definitely, if this is not an illegal transactions, the authority won't make a big fuss about it.
Research is important if we are allowed to make transactions anywhere or we need some kind of license.

[kamadazje]

I am not so sure if there are something like this that happened but if in case there is an arrest that happened. I am sure that they have something fishy
in their actions or selling bitcoin in their country is prohibited.

Person to person is not a problem, though exchanges opposes it as it is a little bit risky for sellers and buyers as the chances that they will likely to get
scammed is pretty high. But as long as you know what you are doing then there is no problem buying bitcoin to people aside from exchanges.

[Findingnemo]

If you are going to do this is on a regular basis then the license may be required but for someone who does it completely person has no reason to report it to the government so they never going to find are you selling bitcoins or not. Maybe the person were arrested for other reasons like for money laundering or dealt with the scammers/criminals.

[roadrunnerjaiv2025]

That depends on which country or state you are making transactions from. Since Bitcoin (or cryptocurrency) is a type of currency, selling or buying it is considered a form of money transmission, and money transmission is a heavily regulated process in any country. Meaning, there are laws governing it, and any transaction that slips through the regulations is deemed unlawful. It makes sense why some countries would do this because bitcoin can be exchanged for fiat money. If they don't regulate bitcoin like they do fiat money, crooks will take advantage of bitcoin transactions to smuggle fiat money out of their country's financial system. But like I said, that depends on which country you are in. I suggest you read up on money transmission laws in your country or state before you start selling or buying bitcoin just to be safe.  

[Yamifoud]

Having a license in regards to Bitcoin selling/buying, it will just lead us to lose our privacy. We've been tracked at that time and can't be anonymous anymore.
Have we liked it? Not, for sure.

I was not looking that side to be in favor of us and to save from the said arrest. I think license will be only required when we are running Bitcoin ATM's, local crypto exchanger but having it in person to person transactions (like we did most of the time), I don't think there is a need to have this.

One thing that bothers you @OP is that you are badly thinking about the worst-case scenario to happen. We can't be arrested because we use bitcoin for a good reason but for sure we got arrested when it is against the law or some sort of illegal activities.

[yazher]

Like everyone sais here, every country has different regulations regarding that matter but as for our country we don't have some problem for now. We are free to sold our BTC to people most people called it P2P transactions but off course, you need to be careful when doing such transactions or else you gonna end up like these guys here: https://github.com/jlopp/physical-bitcoin-attacks/blob/master/README.md

[Eugenar]

Not familiar with this license to sell and trade crypto through peer-to-peer transactions. But as how I look at it, cryptocurrency is simply illegal to that/those countries wherein people are being caught and punished because of crypto usage. To put it simply, there will br no license in such countries to the simple fact that it is not legal in those areas. The only way people in those regions will be able to use crypto or buy crypto is through hidden transactions but risk of being caught will not be lessen since there is a punishment.

The best thing to do is to wait for the adaptation. For sure, it is not a single country wherein cryptos are not legal. There are even countries wherein it is quite neutral in a sense that it is not supported to be a mode of payment but there's no punishment on investing into it.

More likely cases regarding the illegality of cryptos has something to do with taxation for every transaction. Cryptos are majorly decentralized, and I think countries are concerned of centralization before the adaptation. So let us just hope that further development in this technology will aid the problem this industry is facing.

[AniviaBtc]

It is really a struggle if your country has a strict law regarding btc transactions.

Selling bitcoin without license is really not a problem, the only problem that we are experiencing are those governments who are not allowing btc transactions to operate freely. There are still countries who are against the utilization of cryptocurrency in their community. Online exchanges has regulators while P2P transactions don't have it.

[Rengga Jati]

So I heard a few stories a while back where ppl got in trouble and arrested and even sent to jail because they were selling bitcoin to other people without a license.  Can someone explain this? 

First, it relates to how the Bitcoin in the country, is it legal or not.
Second, it relates to the rules and regulations of the country. Sometimes, every country has different rules and regulations. In this case, you should know the rules in that country. If Bitcoin is considered illegal, it makes sense if they are arrested. Or there are also certain rules about the transaction of BTC and other cryptocurrencies that must use the official and legal exchanges.

[smyslov]

So I heard a few stories a while back where ppl got in trouble and arrested and even sent to jail because they were selling bitcoin to other people without a license.  Can someone explain this?  So basically if you sell bitcoin in person to ppl for cash or any types of money payment whether its bank wire or cash in bank deposit... you need a license but only if you do a lot of transactions?  But if you sell btc to a few ppl several times a year only, you don't?  Example imagine a few times you sell a few thousand worth of btc to a few friends throughout the year... say you did it 5 times and it was for like 8k total.  That you don't?

Where country is that, if a country ban trading Cryptocurrency, then selling it will put you in prison you don't need a license you only have to check if the country where you are in allows trading of Bitcoin if not then desist from doing so, it they allow you don't have a license but if they have a regulation that you need one then get one, it's the rule of the country where you are residing.

[adzino]

Depends from country to country. But almost all countries requires you to have a license. Any thing related to money exchange, if on large scale will require governments permission. Getting licensed means the government will allow you to legally operate a money exchange.
Like I said, it differs from country to country and how they see crypto currencies. If bitcoin is strictly regulated, then highly likely you will need to get a license. Recently I have heard that the German authorities shutting down all bitcoin ATMs that had no license to operate.

[Wexnident]

Most issues came from not selling Bitcoin, but rather by tax evasion or money laundering using Bitcoin. It's mostly just them using Bitcoin to avoid everything official, and to save on a few bucks for each transaction they have. As for Bitcoin being illegal itself, there are other countries out there that don't allow Bitcoin transactions, though really, as long as you don't want to be found out, it's rather easy to transact even in banned countries. There's no need for licenses, whether it is in person or online transactions, you only need to be lawful when transacting, avoiding anything that may seem wrong in the eyes of the law. Ofc, since it's Bitcoin, that of itself may be wrong in the law, but you never know.

https://bitcointalk.org/index.php?topic=5264101 Here's a topic about money laundering using Bitcoin ATMs. Was made just last month.

[verita1]

From my point of view, exchange platforms were created to facilitate the work of selling and buying bitcoins. Where security and lawful trade must prevail. I don't see anything against this fact. Whichever method you use to buy and sell them is fine.

I think that every Bitcoiner should see this documentary or any other that recapitulates the beginnings of Bitcoin to give it the true value that it really has.
The value goes further, there are those who can buy more and more to save them and get rich. As there are also others who spend it to buy bread from day to day, specially in this time of crisis and famine.

Evolution of Bitcoin - Full documentary
https://youtu.be/HUpGHOLkoXs

If you are in need of a license to trade bitcoin you may need to read this article.

https://www.suretybonds.org/blog/which-states-require-cryptocurrency-businesses-to-get-a-money-transmitter-license/

[maxreish]

Different rules and regulations in different countries.
 If that  case of yours were always selling bitcoin personally, like it seems like his job to sell it regularly in a particular person. They have the right to find and require license. May we know which country are you talking to so we may evaluate the situation base on the respective laws about crypto activities?
 
 Also, crypto exchanges has a registeted license and can be trusted so there is no need to question their legibility.

[Debonaire217]

Perhaps, cryptocurrency exchanges have legalities and they are paying taxes as well in order to comply to the government's jurisidiction. So if you are earning profit without the use of exchange, you might have a trouble depending on what rules your country has.

but for me, there's nothing wrong in selling bitcoin in person as it was like selling products and services, just make sure you ask first what protocols they have regarding it.

In terms of your bitcoin wallet, you're good, but in your bank account, they might question where the money came from.

[avikz]

~

Do you have any proofs linking to such events??

Some countries have their different laws with regards to selling and buying cryptocurreny, though it may sound like they control it, they don't. Some just prefer legal transactions in everything that has something to do with money. But if they would transact in a local place or their Bitcoins was from illegal activities or was used for anything illegal, then it would be a reason for them to get arrested.

And if you are pertaining to online exchanges, there are no rules in most countries that prohibits such actions, as most crypto are transferred with privacy and transparency.

There are lot of incidents took place in US. Let me share few of them,

https://news.bitcoin.com/us-federal-authorities-arrest-man-selling-9-99-bitcoin/

https://thenextweb.com/hardfork/2019/04/09/22-year-old-gets-2-years-in-jail-for-illegally-selling-hundreds-of-thousands-in-bitcoin/

https://www.coindesk.com/localbitcoins-users-criminal-charges-florida

I hope these 3 will suffice for the time being. In US, people will need to have a money exchange license before they can sell bitcoins to another person and that business will attract taxes accordingly. 

[MMiller64]

From what I know it's quite easy to earn money from Bitcoin in Poland. Maybe through VPN and other IP hiding services you'll be able to get something here?

[MCobian]

Because not all countries legalize Bitcoin, selling / buying bitcoin in person can be a problem. Even though the country
has legalized Bitcoin, it is still illegal to sell Bitcoin in person without a license. In fact, several countries prohibit conducting
Bitcoin transactions directly without a license to prevent illegal activities.

[yhiaali3]

Of course the laws differ from one country to another, but in general I think that the reason for this is that selling Bitcoin to people and not to companies is considered a type of tax evasion, when you sell or buy Bitcoin from someone directly, you do not pay any taxes because the deal is by agreement between you without paying any taxes. and this is contrary to the laws of some countries and is considered tax evasion.
When you buy or sell bitcoin from an exchange or other sites, you will have paid the tax through this sites because these licensed companies pay taxes to the government on a regular basis.

[imstillthebest]

Of course the laws differ from one country to another, but in general I think that the reason for this is that selling Bitcoin to people and not to companies is considered a type of tax evasion, when you sell or buy Bitcoin from someone directly, you do not pay any taxes because the deal is by agreement between you without paying any taxes. and this is contrary to the laws of some countries and is considered tax evasion.
When you buy or sell bitcoin from an exchange or other sites, you will have paid the tax through this sites because these licensed companies pay taxes to the government on a regular basis.

really ? we are being charged by a tax transacting online ? i didnt knew that because they dont also state in on thier terms . what i know for sure is that im only paying a service fee and that is expensive everytime i convert my fiat to crypto or crypto to fiat using this online wallet that ive downloaded .

this is why i sometimes prefer to buy and sell in person but i dont think people here on my place knows anything with btc

[Slow death]

In US, people will need to have a money exchange license before they can sell bitcoins to another person and that business will attract taxes accordingly.

this is not only in the USA, in almost every country in the world people will need to have a license even if bitcoin is not regulated, one thing is to buy bitcoin in a foreign exchange and another thing is to sell bitcoin to a person from your own country, in that second scenario in my opinion is dangerous because the person will need a license

From what I know it's quite easy to earn money from Bitcoin in Poland. Maybe through VPN and other IP hiding services you'll be able to get something here?

and the person will do it for how long? when someone does illegal things or wants to circumvent laws it never ends well

[Saisher]

Everything depends on your government perception of Cryptocurrency and what are the policy regarding buying and selling Bitcoin, I read in other countries you will be put in jail even if you only have one transaction, and there are countries that are very open on Cryptocurrencies they even laid out protection to both buyers and sellers, so check your country's policy regarding Cryptocurrency.

[MAsterCoiner]

How will the government and regulators know, how much bitcoin I sold to my friend while we were playing golf?  we scanned wallet QR codes and transferred while playing golf middle of the ground without anyone can see both of us.

How can the government see while I was transferring crypto coins to my friend's wallet overseas, and he paid my sister's college fee using his credit cards?

Is there a legal problem here? Do we need license to do this?  Can someone go to jail by doing this? 

please guys reply with your thoughts.

[aioc]

How will the government and regulators know, how much bitcoin I sold to my friend while we were playing golf?  we scanned wallet QR codes and transferred while playing golf middle of the ground without anyone can see both of us.

How can the government see while I was transferring crypto coins to my friend's wallet overseas, and he paid my sister's college fee using his credit cards?

Is there a legal problem here? Do we need license to do this?  Can someone go to jail by doing this? 

please guys reply with your thoughts.

If you agree to keep this between the two of you, there is no way for the authorities to know, I have known a lot of transactions that amounted to thousands of dollars between friends, and the authorities will never bother because it's against their right and only an order from a court can make them confess, if transactions in that country is illegal they will have to show proof transactions between the two of you.

[Harlot]

If you are talking about the United States in this question I think jackg is right to say that it will depend on what state are you doing your business in. For that if you are conducting your P2P business in New York (City) you will definitely have some kind of license which they call BitLicense in order for you to conduct buy and sell with your cryptocurrency, you need to register it as some kind of business activity. For other states or cities in the US I don't think they have something similar like that but maybe I'm not aware of some kind of law in particular so you must ask maybe a local attorney from your place to see if you can legally buy and sell crypto without a license.