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In the United States, there is not a single legal Bitcoin exchange. That's all you need to know.
by thinkcomp 13y ago
In the United States, there is not a single legal Bitcoin exchange. That's all you need to know.
- deleted 13y ago[deleted]
- sroerick 13y agoHow does coinbase operate?
- aqme28 13y agoIt operates on Bitstamp's exchange to buy/sell when orders can't be satisfied with existing assets.
- thinkcomp 13y agoIt relies on Andreessen Horowitz's connections to former regulators, such as William Haraf, the former Commissioner of the California Department of Financial Institutions, now employed by Promontory Financial Group, to convince the DFI (now DBO) look the other way while Silicon Valley Bank pretends that what it's doing doesn't pose any legal problems. Coinbase knows exactly what's going on with the money transmission laws it chooses to ignore. See: http://www.dfs.ny.gov/insurance/hearing/vchearing/ehrsam.pdf http://www.dfs.ny.gov/insurance/hearing/vchearing/ehrsam.pdf
- skelsey 13y agoAre you saying that a "former" regulator is capable of "looking the other way"?
- thinkcomp 13y agoFixed. To be more specific, three Andreessen companies (Dwolla, Coinbase, and Ripple) were supposed to be on a panel in San Francisco in October, 2013: http://financialwomensf.org/virtual-currencies-are-they-the-future-of-payments http://financialwomensf.org/virtual-currencies-are-they-the-... Dwolla pulled out at the last minute, likely due to regulatory pressure from New York DFS, which had issued subpoenas in August, and less than two weeks later Dwolla renounced and stopped its involvement with Bitcoin. The moderator of the panel was none other than William Haraf of Promontory, the former Commissioner, but he wasn't the only one there. I met one of Promontory's former partners, who had just resigned to go work for one of the three companies. (I'm being intentionally vague.) Robert Venchiarutti, the Deputy Commissioner of Money Transmission for California under Haraf is the same individual who is still the Deputy Commissioner of Money Transmission now, and has been for fourteen years. Connections matter in this world.
- rdl 13y agoCoinbase isn't really an exchange in the same way mtgox/etc. are. It's a hosted wallet and a USD/BTC market maker.
- dublinclontarf 13y agoCoinbase are a broker.
- thinkcomp 13y agoWhat matters is that they are a money transmitter under U.S. law.
- pmorici 13y agoI doubt that. That's a pretty extraordinary claim care to back it up with some examples or facts.
- thinkcomp 13y agoLegal compliance requires money transmission licenses in 47 states and registration with FinCEN pursuant to 18 U.S.C. § 1960. No exchange fulfills all of these criteria; most haven't even bothered to try.
- pmorici 13y agoHave you checked on each of them? I'm pretty sure Kraken fulfills all the requirements in the jurisdictions in which they operate. CoinSetter also has a unique model which probably precludes them from the definition of money transmission. Not sure about Coinbase but I would be surprised if they weren't on the up and up.
- thinkcomp 13y agoYes. Kraken is Payward, Inc., and they're not on this list: http://www.dbo.ca.gov/Licensees/money_transmitters/money_transmitters_directory.asp http://www.dbo.ca.gov/Licensees/money_transmitters/money_tra... Neither is Coinbase. Neither has applied for a license, but since Coinbase and Payward have registered with FinCEN, they [know they] are required to.
- pmorici 13y agoDoes kraken allow BTC / USD trading by customers located in CA? I didn't think they did. Edit: Their FAQ even says their approval in CA and most other US states is pending and customers aren't allowed to trade until it is approved https://www.kraken.com/help/faq#verification-tiers https://www.kraken.com/help/faq#verification-tiers
- TheAlan 13y agoWhat about Coinsetter?