Room? Yes, there are, of course, specially if you do it better than the current ones. Granted, what you need, first, Security. Do it wrong, and you are screwe

Room? Yes, there are, of course, specially if you do it better than the current ones. Granted, what you need, first, Security. Do it wrong, and you are screwed, even legally. Second, a way to handle fiat money, Bitcoinica famously sidestepped that because they were not a true exchange, and were more of a sort of "betting" platform. Some exchanges negotiate with banks, to do their thing. Third, making a software that is not buggy enough to be exploited. I know of a exchange where it was possible to withdraw USD twice (you deposit say, 1000 USD, then withdraw 1000 USD, and 1000 USD again). Another one, calculated your fees only after you requested a withdraw (so, suppose you wanted to transfer 1000 BTC, and the fee for withdraw was 1%, it would allow you to transfer 1000 BTC, keep the BTC, and then would set your account to -10 BTC) Or Bitcoinica once that had negative spreads, thus just buying and selling like crazy had outrageous profits (and outrageous losses to bitcoinica).