3 ms·

Many international exchanges don't really care about US AML provisions and/or about transacting in US dollars. And as long as they don't maintain US bank accoun

by gst 13y ago

Many international exchanges don't really care about US AML provisions and/or about transacting in US dollars. And as long as they don't maintain US bank accounts they probably also don't care about being sued in the United States.

coldtea 13y ago
I don't think that works well for people who are not drug barons.
- gst 13y ago
  Why not? Many European countries don't extradite their own citizens [1]. So you only need to comply with the local laws, which are often much less strict in terms of AML provisions. Of course you wouldn't want to do any international travel as an exchange operator who violates US law, but otherwise you're safe. [1] Instead, they can sue you locally, even if they crime happened in another country. However, this lawsuit will be according to local laws. So if the crime is only illegal in the other country they can't sue you.
  - PeterisP 13y ago
    From what I see there has been a great, successful push to "harmonize" AML provisions, so I believe they are at their core pretty much the same throughout the 'civilized world' and the semi-dictatorships have much stronger controls than that - so all the big economies and major currencies are affected in the same way as USA/USD. Can you elaborate on which countries do you have in mind for "comply with the local laws, which are often much less strict in terms of AML provisions" ? For extradition you mention Europe, but the EU AML directive is already comprehensive enough to make illegal most suggested bitcoin-for-laundering use cases; and it can be expected that if there are major loopholes found, then (continuing with their existing AML policy) EU legislation will be quickly adapted to close them.
jackgavigan 13y ago
Given the United States' track record when it comes to pushing out the boundaries of its extraterritorial jurisdiction, it would not surprise me if such exchanges were to encounter difficulties in finding a bank that was willing to provide them with banking facilities. Also, it would be inadvisable for the staff of such exchanges to travel to (or transit through) the United States. http://en.wikipedia.org/wiki/David_Carruthers#Arrest_during_US_transit_flight http://en.wikipedia.org/wiki/David_Carruthers#Arrest_during_...
- gst 13y ago
  If you don't find a bank account you could always operate a P2P-style exchange like bitmarket used to: The exchange acts as an escrow for the Bitcoins, but the fiat transaction happens directly between market participants. Once the fiat arrives at the receiver the coins are released. In case there are any disagreements the exchange can ask both sides for proofs. This won't prevent 100% of fraud, but seems to have worked well for bitmarket. The reason why those P2P-style exchanges aren't common in the United States is because it's hard to directly transfer money between two people. With SEPA transactions in Europe you can directly transfer money to any recipient, usually for free (or at a very low cost).
  - PeterisP 13y ago
    And at that point you have perfectly traceable transactions, since the 'fiat transaction' part has personally identifiable information of both participants.
PeterisP 13y ago
AML laws are not US-specific - as soon as the current regulation catches up, any international exhange will either comply with their local AML laws doing the same thing, or will have trouble handling the 'real currency' part of their transactions.

by gst 13y ago

coldtea 13y ago

I don't think that works well for people who are not drug barons.

gst 13y ago
Why not? Many European countries don't extradite their own citizens [1]. So you only need to comply with the local laws, which are often much less strict in terms of AML provisions. Of course you wouldn't want to do any international travel as an exchange operator who violates US law, but otherwise you're safe. [1] Instead, they can sue you locally, even if they crime happened in another country. However, this lawsuit will be according to local laws. So if the crime is only illegal in the other country they can't sue you.
- PeterisP 13y ago
  From what I see there has been a great, successful push to "harmonize" AML provisions, so I believe they are at their core pretty much the same throughout the 'civilized world' and the semi-dictatorships have much stronger controls than that - so all the big economies and major currencies are affected in the same way as USA/USD. Can you elaborate on which countries do you have in mind for "comply with the local laws, which are often much less strict in terms of AML provisions" ? For extradition you mention Europe, but the EU AML directive is already comprehensive enough to make illegal most suggested bitcoin-for-laundering use cases; and it can be expected that if there are major loopholes found, then (continuing with their existing AML policy) EU legislation will be quickly adapted to close them.

jackgavigan 13y ago

Given the United States' track record when it comes to pushing out the boundaries of its extraterritorial jurisdiction, it would not surprise me if such exchanges were to encounter difficulties in finding a bank that was willing to provide them with banking facilities. Also, it would be inadvisable for the staff of such exchanges to travel to (or transit through) the United States. http://en.wikipedia.org/wiki/David_Carruthers#Arrest_during_US_transit_flight http://en.wikipedia.org/wiki/David_Carruthers#Arrest_during_...

gst 13y ago
If you don't find a bank account you could always operate a P2P-style exchange like bitmarket used to: The exchange acts as an escrow for the Bitcoins, but the fiat transaction happens directly between market participants. Once the fiat arrives at the receiver the coins are released. In case there are any disagreements the exchange can ask both sides for proofs. This won't prevent 100% of fraud, but seems to have worked well for bitmarket. The reason why those P2P-style exchanges aren't common in the United States is because it's hard to directly transfer money between two people. With SEPA transactions in Europe you can directly transfer money to any recipient, usually for free (or at a very low cost).
- PeterisP 13y ago
  And at that point you have perfectly traceable transactions, since the 'fiat transaction' part has personally identifiable information of both participants.

PeterisP 13y ago

AML laws are not US-specific - as soon as the current regulation catches up, any international exhange will either comply with their local AML laws doing the same thing, or will have trouble handling the 'real currency' part of their transactions.