Are you operating from France? Paytunia is a French company, isn't it?
Since the banque de France decision that MtGox needed banking permits, wouldn't the same be valid to Bitcoin-central for it to operate legally?
Not that I care about respecting stupid laws per se, but I do care about having my money lost or worse in case your exchange is shut down by the Elysée's mafia...
Let me elaborate on that, because that is a really important question.
First of all, I if remember correctly the judge of the Tribunal de Commerce de Créteil ruled that the bank had a right to terminate the account because it was not used for its original purpose, which was to be the primary account for a tiny software development company called Macaraja (see previous link). Regarding Paytunia and Bitcoin-Central
: Paytunia is a brand of a French company called Paymium that also operates Instawallet, I'm the CTO of Paymium. If you happen to be in Paris you're welcome to visit us in our office (metro Porte de Saint-Cloud) !
Bitcoin-Central, on the other hand, legally is a service operated by Tivoli HK Ltd. which is a company incorporated in the Hong-Kong jurisdiction. Legally, what the Bitcoin-Central service is, is the simplest it could be :
- It buys a digital commodity called Bitcoin from individuals or corporations by crediting a client account, and performing actual payments upon request,
- It sells a digital commodity called Bitcoin from individuals or corporations who have pre-paid a certain amount of fiat currency,
- It does both of the previous things at the same time, which functionally makes it similar to a FOREX, but legally similar to an import/export business
Please bear with me while I go back in time and give some context :
When I started BC I accepted deposits on my personal bank account, this quickly proved to be suboptimal, my account balance pretty much exploded. I didn't want to put myself at risk of being rape-caged and fined, and I didn't want my users to be at risk of losing funds.
So the next thing I thought was : "hey, there's lots of potential, let's incorporate properly". Problems started when the actual implemtation details had to be figured out. The first tough question was : "what is Bitcoin ?", because the answer to that is the prerequisite : to proper accounting, proper tax-payment, and ultimately avoidance of the dreaded rape-cage.Options were :
- Bitcoin is currency. That would have made things easy, opening a money-changing business is comparatively easy to the other options,
- Bitcoin is a commodity. Less easy, that would have meant incorporating as a proper commodity marketplace, which is really hard if you don't have the proper resources,
- Finally, the conservative and safe option was to treat Bitcoin as a generic virtual good/service. Awesome, that's easy to incorporate for, the blocking point was the Value Added Tax that is due for sales to individuals.
VAT is the keyword, its one of the primary sources of income for the French government, so let me tell you that they take it *seriously*. What would the implications of VAT have been for someone who buys stuff from individuals and immediately sells it to others. It's pretty simple, it's 19.6%.
Practically, that would have meant that users could sell coins for X, and BC would have had to resell the same coins immediately for (X * 1.196). Users would have had to pay an extra 20% in taxes to the French government to buy coins at Bitcoin-Central. Did not happen obviously.
So we're coming to the Hong-Kong thing.
Hong-Kong's legislation has a very interesting property, it has 0% VAT
if you do business outside of Hong-Kong: perfect fit!
That basically meant to me that I could incorporate a company in HK that would buy and sell a digital generic good/service free of taxes, without making risky assumptions regarding its legal nature. Opening a bank account in SEPA zone for a Hong-Kong corporation was a headache but ultimately succeeded (the hard part was always explaining Bitcoin
). This setup enables BC to do the following thing :
- Buy Bitcoins,
- Sell Bitcoins with 0% VAT without making risky legal assumptions,
- Provide users with the convenience of a SEPA zone account
The main point here is : it's the most legally conservative, and safe setup I think is possible in Europe. Having less users, pay more to intermediates for a more complicated setup, and take the hard path is OK to me if that's what it takes to do business securely. My peace of mind has no price
We think being open to users and curious people is a good thing, so if you have further questions, don't hesitate to ask here, or visit us for a cup of coffee