The other side:
- People are already running numerous exchanges. How could a very simple wallet web app possibly be in violation of any law?
If you are trying to withdraw large amounts of bitcoins from an exchange, if they are practicing AML/KYC recommendations they are likely to request identity first. Perhaps because an InstaWallet service deals only with bitcoins and doesn't touch fiat those AML/KYC restrictionis don't apply?
The difference between an instawallet service and any other online ewallet is that an instawallet is like an anonymous, bearer negotiable instrument. Anyone who knows the URL can spend the funds. Which makes it transferable from one person to the next without there being any record of it. Just like with cash.
My jurisdiction is Finland, EU, but feel free to discuss any area at all.
The FAQ page for BtcBuckets (an instant wallet service) reads:
"About the creator
I am a recently graduated 26 year old attorney licensed to practice in New Jersey."