>It's entirely possible that people will trade and do business in USDcoin...This is a reality that regulators will have to get used to. I'm not sure about this

>It's entirely possible that people will trade and do business in USDcoin...This is a reality that regulators will have to get used to. I'm not sure about this one. Regulators have a tendency to "motivate" others to "get used to" things, not the other way around. With E-gold years ago, the proprietors were criminally indicted for activity that took place on their network. With your architecture, if the Feds deemed that their was laundering taking place or the exchange was otherwise being used to facilitate illicit activity, then I can easily envision them expanding the "responsible parties" definition beyond gateway operators to any node in the exchange. This, of course, would mean that anyone participating would be liable for activity that routed through them, thereby having a chilling effect on participating peers. So, if their goal is to shut down the exchange, they can effectively do so via this implicit threat of criminal prosecution. If any of this sounds far-fetched, you really have to review the E-gold case [0] to see just how much the regulatory regime will contort itself to keep financial transactions under its constant watch. [0] http://en.wikipedia.org/wiki/E-gold#Criminal_prosecution http://en.wikipedia.org/wiki/E-gold#Criminal_prosecution