Is it legal to run non-KYC cryptocurrency exchanger?

[Gyshni]

Well, if non-KYC cryptocurrency exchange platform is legally registered company in country where laws are interpretating it as legal, it means operators of that service cannot get in legal trouble?

Only one who "can" get in legal troubles are individuals that are using this service despite service being interpreted as illegal in their country, right? Also, I assume that running .onion hidden service of completely legally registered company of non-KYC cryptocurrency exchanger is fine.

[Oshosondy]

Your exchange can get registered and be given license which makes the exchange to be legal in your country but that does not mean it can not get into legal trouble if the exchange is linked to crime or misappropriation of customers money and others. Example is FTX that later got collapsed. But if you do everything the right way, you can not get into legal trouble.

[avikz]

Well, if non-KYC cryptocurrency exchange platform is legally registered company in country where laws are interpretating it as legal, it means operators of that service cannot get in legal trouble?

Only one who "can" get in legal troubles are individuals that are using this service despite service being interpreted as illegal in their country, right? Also, I assume that running .onion hidden service of completely legally registered company of non-KYC cryptocurrency exchanger is fine.

How come you can register a financial service providing company which can exempt its users from KYC and yet allow them to do financial transactions? Which country?

If I know correctly, no country will allow that. Once you are registered as a financial service company, you must ask for KYC documents from your users.

If you are planning to run your company via TOR/deepweb, why would you even register that business?

[btcinfo891]

Well, if non-KYC cryptocurrency exchange platform is legally registered company in country where laws are interpretating it as legal, it means operators of that service cannot get in legal trouble?

They cannot (or rather should not) get in legal trouble in the country A where the business is registered. However if they travel to the country B, where their service is illegal they can be detained and put on trial for violating the laws of B. That could happen if the citizens or companies of B used the service of the cryptoexchange that is registered in A.

In the past that happened with at least one online casino allowed US citizens to play in that casino. The casino owner traveled to South America by air, then the airplane landed in a US airport for refueling and the casino owner was arrested while the plane was refueling.

A similar incident happened recently with Pavel Durov, the CEO of Telegram. His company was registered in UAE and provided services that were legal in UAE, but when he landed in France, he was immediately arrested because his company was violating the EU laws.

Also keep in mind that the country A, where the exchange is registered could have extradition treaties with EU or USA, so they can demand your extradition. If A is small, insignificant country it will easily bend over and extradite you to EU or USA, even if you are a citizen of A.

So yeah, you can get in trouble if you run a non-KYC exchange. If you decide to start such an exchange you should be careful and do your due diligence.

[Gyshni]

Your exchange can get registered and be given license which makes the exchange to be legal in your country but that does not mean it can not get into legal trouble if the exchange is linked to crime or misappropriation of customers money and others. Example is FTX that later got collapsed. But if you do everything the right way, you can not get into legal trouble.

Take exch.cx (https://exch.cx/), they are company registered in Belize (meaning that they job are doing purely legal), even tho they are non-KYC cryptocurrency exchanger that's not requiring any users data (neither KYC or SoF - Source of Funds). You can see their entity details here: (https://exch.cx/faq#are_you_a_legal_entity)

Well, if non-KYC cryptocurrency exchange platform is legally registered company in country where laws are interpretating it as legal, it means operators of that service cannot get in legal trouble?

Only one who "can" get in legal troubles are individuals that are using this service despite service being interpreted as illegal in their country, right? Also, I assume that running .onion hidden service of completely legally registered company of non-KYC cryptocurrency exchanger is fine.

How come you can register a financial service providing company which can exempt its users from KYC and yet allow them to do financial transactions? Which country?

If I know correctly, no country will allow that. Once you are registered as a financial service company, you must ask for KYC documents from your users.

If you are planning to run your company via TOR/deepweb, why would you even register that business?

As I said, take exch.cx and Belize laws for example. And running my service over Tor is actually enhancing users' anonymity so it's nothing wrong with that.

Well, if non-KYC cryptocurrency exchange platform is legally registered company in country where laws are interpretating it as legal, it means operators of that service cannot get in legal trouble?

They cannot (or rather should not) get in legal trouble in the country A where the business is registered. However if they travel to the country B, where their service is illegal they can be detained and put on trial for violating the laws of B. That could happen if the citizens or companies of B used the service of the cryptoexchange that is registered in A.

In the past that happened with at least one online casino allowed US citizens to play in that casino. The casino owner traveled to South America by air, then the airplane landed in a US airport for refueling and the casino owner was arrested while the plane was refueling.

A similar incident happened recently with Pavel Durov, the CEO of Telegram. His company was registered in UAE and provided services that were legal in UAE, but when he landed in France, he was immediately arrested because his company was violating the EU laws.

Also keep in mind that the country A, where the exchange is registered could have extradition treaties with EU or USA, so they can demand your extradition. If A is small, insignificant country it will easily bend over and extradite you to EU or USA, even if you are a citizen of A.

So yeah, you can get in trouble if you run a non-KYC exchange. If you decide to start such an exchange you should be careful and do your due diligence.

Yeah, I get your point. You are suggesting that I can get into legal troubles if (I as non-KYC cryptocurrency owner) visit country that is interpretating non-KYC cryptocurrency exchangers as illegal. Also, I agree that when starting an exchange (espiacally with my ideas), you should approach this project while being completely careful. Being careful when doing it is a MUST.

[Z-tight]

It depends on the country, there are some countries that are aggressively against privacy, so they will surely not support services that do not require kyc, if you want them to register your service in their jurisdiction. Governments have been going after legal services like mixers for sometime now, so i think it goes to show that it counts for little when they accuse your service of money laundering and terrorism financing.

[Gyshni]

It depends on the country, there are some countries that are aggressively against privacy, so they will surely not support services that do not require kyc, if you want them to register your service in their jurisdiction. Governments have been going after legal services like mixers for sometime now, so i think it goes to show that it counts for little when they accuse your service of money laundering and terrorism financing.

Well, if my country is supporting services that do not require KYC, I should be fine, despite other countries may interpretate my service to be illegal in their jurisdiction, right? As long as I'm not visiting nor traveling to that country.

Also, kind of off-topic, if I may ask about your point of view, are you for or against privacy, do you think every individual should have this right to stay private, anonymous and not being monitored whatsoever? I'm curious on others people opinion on this.

[btcinfo891]

Well, if my country is supporting services that do not require KYC, I should be fine, despite other countries may interpretate my service to be illegal in their jurisdiction, right? As long as I'm not visiting nor traveling to that country.

Probably. If the country where the company owner resides has extradition treaties with EU, USA, UK or other western countries, they will probably request the extradition of the owner. Otherwise (no extradition treaties), they will probably just stay silent and wait for him to travel abroad and try to arrest him there. That is if they know who the owner of the service is.

Also, kind of off-topic, if I may ask about your point of view, are you for or against privacy, do you think every individual should have this right to stay private, anonymous and not being monitored whatsoever? I'm curious on others people opinion on this.

Not sure if you are asking just z-tight or everyone in this thread, but I am strongly for privacy. But nowadays things are quite different from what they were 30 years ago and privacy is pretty much non-existent as of now. No more bank secrecy, cash is being phased out and we are moving real fast towards the introduction of CBDCs which will put everyone under total government control.

[Apocollapse]

To my knowledge, yeah it's legal, even run centralized mixer is legal too. We've heard the US arrest centralized mixer owners (Tornado cash, blender, sinbad), privacy oriented wallet owner (samourai wallet), decentralized marketplace owner (silk road), but if we talk in general, the US didn't declare those niches are illegal.

AFAIK, they ask you to comply with regulation and you have to share everything if they ask for private information, in this case, your project can survive, but it will ruin your project since people have lost their trust in your project.

[hugeblack]

It varies depending on the services provided by the cryptocurrency exchanger. If it includes withdrawal/deposit to bank accounts, it will not be legal to run such a platform. Therefore, this list includes all services that allow you to withdraw to the bank or P2P with bank accounts. As for crypto transfer --> crypto, the license does not require mandatory KYC for some countries

[Botnake]

It depends on where they got their license. The basics are simple, if they have a license, then they’re legal.

Some exchanges don’t require KYC for clients trading only up to a certain amount, meaning it’s limited to small traders. However, even in such cases, they can’t be classified as non-KYC exchanges; they just have a threshold or ceiling for enforcement.

From my understanding, it’s straightforward, all legal exchanges are required to implement KYC for their clients because it’s the standard law to combat money laundering. However, there might be exchanges that know they’re required to comply but still don’t, thinking the penalties won’t be too severe or that regulators aren’t strict in enforcing the rules. What they fail to see is that regulators can always revisit their past operations, leading to violations and penalties later on. This is exactly what happened to Binance, they weren’t strict with KYC before, and it ended up with them facing lawsuits and paying hefty fines.

[Maslate]

There are exchanges that aren’t too strict with KYC, even though they claim to have licenses and operate legally. However, these exchanges usually aren’t part of the top 10 or well-known platforms. This comes with a big risk because their lack of popularity often means they haven’t built a solid reputation or proven their competitiveness in the market. There’s a high chance they could suddenly disappear, possibly due to legal battles or other issues, turning into a nightmare for their users.

[Z-tight]

Well, if my country is supporting services that do not require KYC, I should be fine, despite other countries may interpretate my service to be illegal in their jurisdiction, right? As long as I'm not visiting nor traveling to that country.

I guess so, it also depends on where your domain name is hosted or registered and how they cooperate with law enforcement agencies from other countries. I.e. your website may not be registered in the U.S., but if the U.S. accuse your service of money laundering and the country you are registered in cooperates with the U.S., they can collaboratively seize your website.

Also, kind of off-topic, if I may ask about your point of view, are you for or against privacy, do you think every individual should have this right to stay private, anonymous and not being monitored whatsoever? I'm curious on others people opinion on this.

I completely believe in privacy, i am also against the anti-privacy and pro-surveillance stance that most governments have taken. I believe everyone deserves to have privacy and that is why i always recommend no-kyc services to users on the forum.

[Potato Chips]

IMO, there are also the gray-area side of things like the off-shore businesses for crypto-to-crypto exchanges which sits in between illegal and legal.

But I would add that things are always developing in the crypto-space especially, with regulations that is most often not the most crystal clear hence, those in the gray-area's side IMO are advised to err on the side of caution. I'd say they must know how to take care of their privacy because we may never know what happens next and how far does fed's arms extend..

[zasad@]

Well, if non-KYC cryptocurrency exchange platform is legally registered company in country where laws are interpretating it as legal, it means operators of that service cannot get in legal trouble?

Only one who "can" get in legal troubles are individuals that are using this service despite service being interpreted as illegal in their country, right? Also, I assume that running .onion hidden service of completely legally registered company of non-KYC cryptocurrency exchanger is fine.

Don't you have enough jurisprudence available to you? If criminals and hackers exchange coins through your service, you will be in very big trouble.

.onion addresses are usually used by criminal services. If your company is legitimate, work with lawyers in your country.

Dutch Court Sentences Tornado Cash Co-Founder to 5 Years in Prison for Money Laundering
https://thehackernews.com/2024/05/dutch-court-sentences-tornado-cash-co.html

"Pertsev, one of the developers of Tornado Cash, was arrested in Amsterdam in August 2022 days after the U.S. Treasury Department sanctioned the service for allowing malicious actors such as the Lazarus Group to launder and cash out their proceeds."