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First U.S. Bitcoin Exchange Set to Open

126 points by sjcsjc 12y ago

pmorici 12y ago
Why is this being billed as the "first U.S. Bitcoin exchange"? No doubt Coinbase will do a good job but it isn't the first or even the first regulated exchange based in the US. CampBX, Kraken, and Coinsetter are all based in the US and follow regulations. If there actually is some distinction between what Coinbase is doing here and what the existing exchanges have been doing for some time I'd be interested to know what that is.
- fehrsam 12y ago
  Co-founder of Coinbase here You're right in that it's not the "first US Bitcoin exchange". However, it is the first US bitcoin exchange with some amount of money transmitter licenses (none of the companies you listed have them to my knowledge). If you're not familiar with money transmitter licenses, it's what you need from most state regulators to move or hold money for customers in that state. That's why we can't support all states at launch. You can see a list of the states we support here: https://support.coinbase.com/customer/portal/articles/1780543-what-is-the-usd-wallet- https://support.coinbase.com/customer/portal/articles/178054... There hasn't been a US based exchange which has had meaningful volume in comparison to the larger international exchanges, so our hope is this gives people a US option that is both stable (both on regulation and security) and has reasonable liquidity.
  - sankaetp 12y ago
    What about http://coinx.com/ http://coinx.com/ ?
  - sidko 12y ago
    >However, it is the first US bitcoin exchange with some amount of money transmitter licenses Not true. There are definitely exchanges out there that have state MSB licenses. Perhaps you're unaware of their existence. I know companies can sometimes be secretive about this stuff, but exchanges like CoinX have MSB state licenses. Check out http://coinx.com/money-transmitter-licenses http://coinx.com/money-transmitter-licenses for instance.
    - beaner 12y ago
      CoinX doesn't have a real product though do they? Does it count if you have the licenses but no exchange to use them with?
      - faisalkhan 12y ago
        VP CoinX here: We do have an exchange, www.coinxtrader.com (it is mentioned on our main website, coinx.com). We were the very first exchange to obtain MTLs, that is the route we took when we established our company. With respect to the second point, "real-product" We have a working exchange in addition to money-transfer services in the shape of coinhub.com (which goes live in a few weeks time).
        beaner 12y ago
        I tried signing up and I keep getting this: "Password must be at least 8 characters and must include at least one upper case letter, one lower case letter, and one numeric digit" even though my password meets the requirements. Also, something seems off. There has to be a reason that you guys aren't used that isn't being acknowledged. I have never heard of anyone using your platform, ever, and when I search for images of the trading interface all I can find are stock photos of lame graphics. Seriously, what's up? There has to be a reason, right?
        CoinXSupport 12y ago
        Could you please email support with your issue so we can take care of it?
  - SomeoneWeird 12y ago
    That still doesn't mean you're the first.
jhildings 12y ago
What about kraken.com, wasn't that the first one ?
- zmanian 12y ago
  Canadian
- jarsin 12y ago
  https://poloniex.com/ https://poloniex.com/ is a US based exchange
- bdcravens 12y ago
  TradeHill (shut down twice due to regulatory issues, now dead) was the first US exchange, but I think that Coinbase will be the first to be properly licensed in the states it operates in, as opposed to just FinCEN.
sarciszewski 12y ago
Does anyone have a non-paywalled version of the story handy?
- jamestanderson 12y ago
  An easy way to get around the paywall is to search for this headline on Google and click a link from the results.
  - istvanp 12y ago
    or take the URL and prepend it with the search operator "site:" site:http://www.wsj.com/articles/first-u-s-bitcoin-exchange-set-to-open-1422221641 http://www.wsj.com/articles/first-u-s-bitcoin-exchange-set-t...
- dmix 12y ago
  A redditor posted the text of the article in a comment: http://www.reddit.com/r/Bitcoin/comments/2tnkf4/first_licensed_us_bitcoin_exchange_set_to_open/co0ls45 http://www.reddit.com/r/Bitcoin/comments/2tnkf4/first_licens...
deleted 12y ago
[deleted]
wmf 12y ago
Previous discussion: https://news.ycombinator.com/item?id=8933218 https://news.ycombinator.com/item?id=8933218
- presty 12y ago
  Your link is about the Wilkevi's exchange. This article is about Coinbase.
- deleted 12y ago
  [deleted]
gojomo 12y ago
Buttercoin, based in Palo Alto and open to US residents only, has been operating for a while. See the 'Legal' section of their FAQ: https://buttercoin.com/#/faq https://buttercoin.com/#/faq
deleted 12y ago
[deleted]
sillysaurus3 12y ago
Does this exchange offer insurance against catastrophic insolvency? Someone went from millionaire to poor overnight when Mt. Gox failed, so it's a real concern. No one should keep their coins in any wallet except their own, and they need to make sure they have the technical understanding of how to properly manage their wallet. If your personal wallet isn't encrypted and backed up, it's not managed properly. If you want to store coins on someone's exchange or webwallet, never store more than 25% of what you're comfortable with losing. (It turns out that "what you're comfortable with losing" is way, way more than the reality of waking up one day and realizing you've lost it all.) This is an interesting move, but I'm worried that these new exchanges will increase the attack surface of Bitcoin's reputation. If the new ones fail, it will shake the public's confidence in Bitcoin yet again. Not that that matters, since Bitcoin seems to go along fine whether or not people are confident in it. I don't know whether it would even be possible to insure against losing all cold storage reserves, but nobody should trust large sums to any webwallet (including Coinbase's current website, BTC-e, Bitstamp, etc) until protection against that worst-case scenario is in place. EDIT: From the paywalled article: The exchange could bring needed legitimacy to the currency, which isn’t backed by a central government and is traded over virtual exchanges, primarily overseas. Coinbase said it has insurance, offering traders some assurance that their money won’t disappear. Until details about this insurance are released, do not trust large sums to Coinbase or anyone else. And unless the insurance protects against every coin disappearing tomorrow, never trust them at all. Trusting them is equivalent to gambling your savings for no benefit.
- bobbygoodlatte 12y ago
  "No one should keep their coins in any wallet except their own" That's just not going to fly if Bitcoin becomes mainstream. There's too much dogmatism around this in the Bitcoin community. Sometimes a hosted wallet is the right solution for a particular user.
  - sillysaurus3 12y ago
    It's not about whether it's going to fly. It's certifiably insane to trust your coins to any third party unless you either have multisig control to prevent those coins from leaving, or they have insurance to replace your coins. Do not ever trust anyone, or you'll lose your money like I did. They won't replace it unless they're legally obligated to replace it (insurance) or they're technically incapable of losing it (multisig). Anything else is magical thinking at its most dangerous, since it can ruin lives.
abjr 12y ago
campbx.com is also US based and has been around for a while
Animats 12y ago
"As is typical of most bitcoin/fiat intermediaries when promoting their products, the new exchange is being touted as a first and a means to bring legitimacy to Bitcoin." - Qntra. We've heard that story many times before. Kraken makes similar claims. (Kraken uses the same address, 548 Market St, SF, as Coinbase. It's a mail-forwarding service. Few people know where either exchange really is.) So what is this "licensed" thing? "Licensed" by whom? The US SEC? The State of New York? Some other state? FinCen. There have been many exchanges registered with FinCen, the anti-money-laundering regulator, including Mt. Gox. That provides no investor protection. A few have been licensed as state money transmitters. That may provide some investor protection. Nobody as yet has been licensed as a broker, dealer, or exchange with the Securities and Exchange Commission, something every stockbroker and dealer in the US has to do. Being licensed as a broker/dealer means SIPC insurance for investors up to $500K per customer, FINRA supervision (they fine a few brokers every month), outside audits, exams for personnel (even the people in a call center have to pass an exam, so they know what they can and can't do) and exams top management (yes, even top management at a brokerage has to pass an exam). There are significant advantages for being a real broker/dealer. You can plug into the financial system at a higher level, and moving money around becomes much easier. An existing broker/dealer could set up a market in Bitcoin if they wanted to. So far, no one has bothered. When a Bitcoin exchange gets licensed by the SEC, let us know. Until then, it's just hype. Edit: the article says they claim to be licensed in California. Here's the list of money transmitters licensed in California: http://www.dbo.ca.gov/Licensees/money_transmitters/money_transmitters_directory.asp http://www.dbo.ca.gov/Licensees/money_transmitters/money_tra... Not seeing Coinbase on the list. Silicon Valley names on the list include Google, Square, AirBnb, Xoom, Paypal, Intuit, etc. No Coinbase, or anything in SF that looks like it might be them.
- skue 12y ago
  Is there any significant difference between this exchange and the upcoming Winklevoss exchange?[1] Both claim to be "regulated," but it doesn't look like the Winklevoss version will offer SIPC protections either.[2] [1] http://dealbook.nytimes.com/2015/01/22/winklevoss-twins-aim-to-take-bitcoin-mainstream-with-a-regulated-exchange/ http://dealbook.nytimes.com/2015/01/22/winklevoss-twins-aim-... [2] http://www.sec.gov/Archives/edgar/data/1579346/000119312513279830/d562329ds1.htm http://www.sec.gov/Archives/edgar/data/1579346/0001193125132...
blfr 12y ago
And Google now tracks Bitcoin as any other currency. https://www.google.com/finance?q=CURRENCY:BTC https://www.google.com/finance?q=CURRENCY:BTC https://www.google.com/search?q=50btc+in+usd https://www.google.com/search?q=50btc+in+usd
- hellbanner 12y ago
  How new is this?
  - oska 12y ago
    Implemented in June 2014 [1], [2]. [1] http://cointelegraph.com/news/111786/both_yahoo_and_google_finance_now_include_bitcoin_pricing http://cointelegraph.com/news/111786/both_yahoo_and_google_f... [2] http://blog.coinbase.com/post/88679063982/coinbases-api-brings-bitcoin-ticker-to-google http://blog.coinbase.com/post/88679063982/coinbases-api-brin...
BallinBige 12y ago
"!st ever"... cmon
aarondu 12y ago
Coinbase and Winklevoss ETF are acting more like new commodity exchanges than currency exchanges. A commodity (like Gold) has value attached but it is not a currency, and its value invariably fluctuates (like Bitcoin). To date, crypto currency remains a technology topic. If you want to change finance, first understand it. Take your corporate finance, capital market, macro economics classes, and understand government's role in currency and economy. Learn about the history of how commercial banking, investment banking, currency and payment worlds have evolved over the last 100 years. In short, figure out how bank and capital flows work before prescribing any solutions like Bitcoin, otherwise it will just prove the rightful criticism - that crypto may point to the right problem, but it in itself is just a technology looking for a problem to solve, and that even if it eventually finds its purpose, the chance that the problem will be small or a better, simpler solution comes by remains high. Financial system as it's built today is an equally sophisticated system vis-a-vis the digital world. Most of those system designers (from say Banking Act of 1933) have left this world. Tech-hackers are many, finance-hackers are fewer. Even fewer understands both. This is why if you ask the view on crypto, you will have very conflicting views between the tech and the finance worlds. And rest to be sured, we are dealing with a problem that's more finance (including financial regulatory) than tech. Almost anyone on hacker news understands how a full stack software system works. But do you understand how a financial "full stack" works? If you're interested in tackling the problem in a new way, we are hiring and welcome your input. HN sn = Gmail sn
- utunga 12y ago
  FWIW aarondu appears to have posted an identical comment on three different bitcoin related hn threads.. and is associated with http://boomerangwallet.com http://boomerangwallet.com. Not sure why this info not on his/her profile page.
- uehehehehe 12y ago
  "If you want to change finance, first understand it." You should take your own advice. "just a technology looking for a problem to solve" haha thanks for the Monday morning laugh. I'd give you a clue but you took, "corporate finance, capital market, macro economics classes, and understand government's role in currency and economy." at a US school. You should ask yourself why, knowing it all, you don't have it all...
sjcsjc 12y ago
I assume it's related to this: https://www.coinbase.com/lunar https://www.coinbase.com/lunar Wonder if wsj breached an embargo releasing this early?

126 points by sjcsjc 12y ago

Why is this being billed as the "first U.S. Bitcoin exchange"? No doubt Coinbase will do a good job but it isn't the first or even the first regulated exchange based in the US. CampBX, Kraken, and Coinsetter are all based in the US and follow regulations. If there actually is some distinction between what Coinbase is doing here and what the existing exchanges have been doing for some time I'd be interested to know what that is.

fehrsam 12y ago
Co-founder of Coinbase here You're right in that it's not the "first US Bitcoin exchange". However, it is the first US bitcoin exchange with some amount of money transmitter licenses (none of the companies you listed have them to my knowledge). If you're not familiar with money transmitter licenses, it's what you need from most state regulators to move or hold money for customers in that state. That's why we can't support all states at launch. You can see a list of the states we support here: https://support.coinbase.com/customer/portal/articles/1780543-what-is-the-usd-wallet- https://support.coinbase.com/customer/portal/articles/178054... There hasn't been a US based exchange which has had meaningful volume in comparison to the larger international exchanges, so our hope is this gives people a US option that is both stable (both on regulation and security) and has reasonable liquidity.
- sankaetp 12y ago
  What about http://coinx.com/ http://coinx.com/ ?
- sidko 12y ago
  >However, it is the first US bitcoin exchange with some amount of money transmitter licenses Not true. There are definitely exchanges out there that have state MSB licenses. Perhaps you're unaware of their existence. I know companies can sometimes be secretive about this stuff, but exchanges like CoinX have MSB state licenses. Check out http://coinx.com/money-transmitter-licenses http://coinx.com/money-transmitter-licenses for instance.
  - beaner 12y ago
    CoinX doesn't have a real product though do they? Does it count if you have the licenses but no exchange to use them with?
    - faisalkhan 12y ago
      VP CoinX here: We do have an exchange, www.coinxtrader.com (it is mentioned on our main website, coinx.com). We were the very first exchange to obtain MTLs, that is the route we took when we established our company. With respect to the second point, "real-product" We have a working exchange in addition to money-transfer services in the shape of coinhub.com (which goes live in a few weeks time).
      - beaner 12y ago
        I tried signing up and I keep getting this: "Password must be at least 8 characters and must include at least one upper case letter, one lower case letter, and one numeric digit" even though my password meets the requirements. Also, something seems off. There has to be a reason that you guys aren't used that isn't being acknowledged. I have never heard of anyone using your platform, ever, and when I search for images of the trading interface all I can find are stock photos of lame graphics. Seriously, what's up? There has to be a reason, right?
        CoinXSupport 12y ago
        Could you please email support with your issue so we can take care of it?
- SomeoneWeird 12y ago
  That still doesn't mean you're the first.

jhildings 12y ago

What about kraken.com, wasn't that the first one ?

zmanian 12y ago
Canadian
jarsin 12y ago
https://poloniex.com/ https://poloniex.com/ is a US based exchange
bdcravens 12y ago
TradeHill (shut down twice due to regulatory issues, now dead) was the first US exchange, but I think that Coinbase will be the first to be properly licensed in the states it operates in, as opposed to just FinCEN.

sarciszewski 12y ago

Does anyone have a non-paywalled version of the story handy?

jamestanderson 12y ago
An easy way to get around the paywall is to search for this headline on Google and click a link from the results.
- istvanp 12y ago
  or take the URL and prepend it with the search operator "site:" site:http://www.wsj.com/articles/first-u-s-bitcoin-exchange-set-to-open-1422221641 http://www.wsj.com/articles/first-u-s-bitcoin-exchange-set-t...
dmix 12y ago
A redditor posted the text of the article in a comment: http://www.reddit.com/r/Bitcoin/comments/2tnkf4/first_licensed_us_bitcoin_exchange_set_to_open/co0ls45 http://www.reddit.com/r/Bitcoin/comments/2tnkf4/first_licens...

deleted 12y ago

[deleted]

wmf 12y ago

Previous discussion: https://news.ycombinator.com/item?id=8933218 https://news.ycombinator.com/item?id=8933218

presty 12y ago
Your link is about the Wilkevi's exchange. This article is about Coinbase.
deleted 12y ago
[deleted]

gojomo 12y ago

Buttercoin, based in Palo Alto and open to US residents only, has been operating for a while. See the 'Legal' section of their FAQ: https://buttercoin.com/#/faq https://buttercoin.com/#/faq

deleted 12y ago

[deleted]

sillysaurus3 12y ago

Does this exchange offer insurance against catastrophic insolvency? Someone went from millionaire to poor overnight when Mt. Gox failed, so it's a real concern. No one should keep their coins in any wallet except their own, and they need to make sure they have the technical understanding of how to properly manage their wallet. If your personal wallet isn't encrypted and backed up, it's not managed properly. If you want to store coins on someone's exchange or webwallet, never store more than 25% of what you're comfortable with losing. (It turns out that "what you're comfortable with losing" is way, way more than the reality of waking up one day and realizing you've lost it all.) This is an interesting move, but I'm worried that these new exchanges will increase the attack surface of Bitcoin's reputation. If the new ones fail, it will shake the public's confidence in Bitcoin yet again. Not that that matters, since Bitcoin seems to go along fine whether or not people are confident in it. I don't know whether it would even be possible to insure against losing all cold storage reserves, but nobody should trust large sums to any webwallet (including Coinbase's current website, BTC-e, Bitstamp, etc) until protection against that worst-case scenario is in place. EDIT: From the paywalled article: The exchange could bring needed legitimacy to the currency, which isn’t backed by a central government and is traded over virtual exchanges, primarily overseas. Coinbase said it has insurance, offering traders some assurance that their money won’t disappear. Until details about this insurance are released, do not trust large sums to Coinbase or anyone else. And unless the insurance protects against every coin disappearing tomorrow, never trust them at all. Trusting them is equivalent to gambling your savings for no benefit.

bobbygoodlatte 12y ago
"No one should keep their coins in any wallet except their own" That's just not going to fly if Bitcoin becomes mainstream. There's too much dogmatism around this in the Bitcoin community. Sometimes a hosted wallet is the right solution for a particular user.
- sillysaurus3 12y ago
  It's not about whether it's going to fly. It's certifiably insane to trust your coins to any third party unless you either have multisig control to prevent those coins from leaving, or they have insurance to replace your coins. Do not ever trust anyone, or you'll lose your money like I did. They won't replace it unless they're legally obligated to replace it (insurance) or they're technically incapable of losing it (multisig). Anything else is magical thinking at its most dangerous, since it can ruin lives.

abjr 12y ago

campbx.com is also US based and has been around for a while

Animats 12y ago

"As is typical of most bitcoin/fiat intermediaries when promoting their products, the new exchange is being touted as a first and a means to bring legitimacy to Bitcoin." - Qntra. We've heard that story many times before. Kraken makes similar claims. (Kraken uses the same address, 548 Market St, SF, as Coinbase. It's a mail-forwarding service. Few people know where either exchange really is.) So what is this "licensed" thing? "Licensed" by whom? The US SEC? The State of New York? Some other state? FinCen. There have been many exchanges registered with FinCen, the anti-money-laundering regulator, including Mt. Gox. That provides no investor protection. A few have been licensed as state money transmitters. That may provide some investor protection. Nobody as yet has been licensed as a broker, dealer, or exchange with the Securities and Exchange Commission, something every stockbroker and dealer in the US has to do. Being licensed as a broker/dealer means SIPC insurance for investors up to $500K per customer, FINRA supervision (they fine a few brokers every month), outside audits, exams for personnel (even the people in a call center have to pass an exam, so they know what they can and can't do) and exams top management (yes, even top management at a brokerage has to pass an exam). There are significant advantages for being a real broker/dealer. You can plug into the financial system at a higher level, and moving money around becomes much easier. An existing broker/dealer could set up a market in Bitcoin if they wanted to. So far, no one has bothered. When a Bitcoin exchange gets licensed by the SEC, let us know. Until then, it's just hype. Edit: the article says they claim to be licensed in California. Here's the list of money transmitters licensed in California: http://www.dbo.ca.gov/Licensees/money_transmitters/money_transmitters_directory.asp http://www.dbo.ca.gov/Licensees/money_transmitters/money_tra... Not seeing Coinbase on the list. Silicon Valley names on the list include Google, Square, AirBnb, Xoom, Paypal, Intuit, etc. No Coinbase, or anything in SF that looks like it might be them.

skue 12y ago
Is there any significant difference between this exchange and the upcoming Winklevoss exchange?[1] Both claim to be "regulated," but it doesn't look like the Winklevoss version will offer SIPC protections either.[2] [1] http://dealbook.nytimes.com/2015/01/22/winklevoss-twins-aim-to-take-bitcoin-mainstream-with-a-regulated-exchange/ http://dealbook.nytimes.com/2015/01/22/winklevoss-twins-aim-... [2] http://www.sec.gov/Archives/edgar/data/1579346/000119312513279830/d562329ds1.htm http://www.sec.gov/Archives/edgar/data/1579346/0001193125132...

blfr 12y ago

And Google now tracks Bitcoin as any other currency. https://www.google.com/finance?q=CURRENCY:BTC https://www.google.com/finance?q=CURRENCY:BTC https://www.google.com/search?q=50btc+in+usd https://www.google.com/search?q=50btc+in+usd

hellbanner 12y ago
How new is this?
- oska 12y ago
  Implemented in June 2014 [1], [2]. [1] http://cointelegraph.com/news/111786/both_yahoo_and_google_finance_now_include_bitcoin_pricing http://cointelegraph.com/news/111786/both_yahoo_and_google_f... [2] http://blog.coinbase.com/post/88679063982/coinbases-api-brings-bitcoin-ticker-to-google http://blog.coinbase.com/post/88679063982/coinbases-api-brin...

BallinBige 12y ago

"!st ever"... cmon

aarondu 12y ago

Coinbase and Winklevoss ETF are acting more like new commodity exchanges than currency exchanges. A commodity (like Gold) has value attached but it is not a currency, and its value invariably fluctuates (like Bitcoin). To date, crypto currency remains a technology topic. If you want to change finance, first understand it. Take your corporate finance, capital market, macro economics classes, and understand government's role in currency and economy. Learn about the history of how commercial banking, investment banking, currency and payment worlds have evolved over the last 100 years. In short, figure out how bank and capital flows work before prescribing any solutions like Bitcoin, otherwise it will just prove the rightful criticism - that crypto may point to the right problem, but it in itself is just a technology looking for a problem to solve, and that even if it eventually finds its purpose, the chance that the problem will be small or a better, simpler solution comes by remains high. Financial system as it's built today is an equally sophisticated system vis-a-vis the digital world. Most of those system designers (from say Banking Act of 1933) have left this world. Tech-hackers are many, finance-hackers are fewer. Even fewer understands both. This is why if you ask the view on crypto, you will have very conflicting views between the tech and the finance worlds. And rest to be sured, we are dealing with a problem that's more finance (including financial regulatory) than tech. Almost anyone on hacker news understands how a full stack software system works. But do you understand how a financial "full stack" works? If you're interested in tackling the problem in a new way, we are hiring and welcome your input. HN sn = Gmail sn

utunga 12y ago
FWIW aarondu appears to have posted an identical comment on three different bitcoin related hn threads.. and is associated with http://boomerangwallet.com http://boomerangwallet.com. Not sure why this info not on his/her profile page.
uehehehehe 12y ago
"If you want to change finance, first understand it." You should take your own advice. "just a technology looking for a problem to solve" haha thanks for the Monday morning laugh. I'd give you a clue but you took, "corporate finance, capital market, macro economics classes, and understand government's role in currency and economy." at a US school. You should ask yourself why, knowing it all, you don't have it all...

sjcsjc 12y ago

I assume it's related to this: https://www.coinbase.com/lunar https://www.coinbase.com/lunar Wonder if wsj breached an embargo releasing this early?