So, I think it's important to make people aware of potential issues they will be faced with as users of the system you're proposing. Essentially I think you're proposing a system very similar to localbitcoins, but for altcoins and maybe with better reputation management (full disclosure, I've never used localbitcoins).
The big danger is that individual users, by repeatedly offering to sell or by crypto for money from the US or to US residents, will be considered to be money transmitters under fincen regulations. Probably the highest risk will be to US residents, since they are the most likely subject to an attempted prosecution.
There's already cases of this type, here's some related links I found on a quick search of the topic:
https://www.coindesk.com/localbitcoins-trader-pleads-guilty-money-transmitter-charge/
https://localbitcoins.com/forums/#!/general-discussion#money-transmitter-licenses
Please understand, I'm not a fan of any of the above, and I don't like to be the bearer of bad news, but I think it's important that people understand the risks for a legal entanglement.
Legal issues aside there is already an open source tool that leverages the escrow functionality of the Steem blockchain that would work for P2P transactions (I pointed this out in the comments below but I am replying here for visibility):
https://steemit.com/escrow/@xtar/open-source-standalone-gui-for-steem-escrow-transactions
Nah, people aren’t considered “money transmitters”, at least not yet :) Follow the cases that you read up on coindesk (a laughable “news” outlet, unfortunately!) and you’ll find that the case will get thrown out like every other case preceding it.
Given they pled guilty according to the article, this seems unlikely. But if you find out otherwise, I would be very interested to know about it, so let me know.
Other people pleaded guilty, too. (Remember those 2 Florida men?) And the case was thrown out. Follow these things closer and stop spreading FUD :)
The situation is very concerning for sure and it seems like everyone of these cases I see they always pled guilty. It never goes to trial with a jury. I have a feeling the people suddenly are facing 30 years or something insane and decide to plead guilty in hopes of ONLY 3 or 4 YEARS in Club FED for selling a digital coin.
I said 4 years ago that in Arizona it would be legal to buy guns from a random person in a Walgreens parking lot but it wouldn't be legal to sell a digital coin. Sure enough I was right....... they nailed a couple guys up in the Phoenix area for selling on LocalBitcoins. I'm too scared to even look up what happened to those guys. And yet no punishment for anyone involved in the 2008 financial crisis.
It even scares me to see the thumbnail for this video because it gives me the chills that they are sending this guy to Club FED for basically NOTHING. That being said I wish anyone luck who is trying to navigate the confusing laws.
@blocktrades thank you for again making a reply to this post because your guidance was valuable last time to the evolution of this and is again. Our primary purpose with this exchange is to empower users in places where no reliable option exists or where using Bitcoin first with often very high fees is the only option. Currently this description fits most countries in the world while not including the USA.
Given that there are several reliable exchanges available in the USA to change into fiat, the majority of the problems seem to be with laws in the USA, and my main vision for this is global, we may opt to exclude users from the USA and/or place additional limits on using this in the USA.
With doing this to benefit users, we obviously have the highest interest in protecting users from potential problems especially from money laundering and prison time.
We're doing almost exactly this with Bitcash (www.bitcash.org)
We'll have a reputation system. It will be peer-to-peer.
Proof of concept/MVP is at: trade.bitcash.org and our wallet is in maintenance mode.
The concern @blocktrades has is understandable, but I think for smaller volumes peer-to-peer exchanges will be fine.
My main focus right now is on this project. We use the Bitshares platform because it's easier to swap 1:1 between dollars for bitUSD and then go back and forth from Steem. I think you can do one just for Steem, but you'll be dealing with order books since Steem dollars don't hold a peg. Best.
yp great!
this will be huuuuge!
@steemrollin thank you for letting us know you are working on this project! I hope it goes well and think we benefit from getting as many projects like yours functional as possible! I got an error on the sign up page.
Thanks @jerrybanfield! Yes our wallet is in maintenance mode right now since it still is in MVP mode and didn't want too many people signing up (we get a lot of traffic from people thinking our website is related to Bitcoin cash).. but we'll get back up soon .. thx!
hey @jerrybanfield,I have no words to say about you, bcoz you are to much intelligent and talented. I have learn many things from you like programming . I am very thankful to u , i really enjoy your concepts, you are my teacher. Thank you much for every thing <3
keep sharing sir <3
@sibtainali
Most Western European countries don't look kindly on unauthorized money transmitters either. Financial regulations is by far the most troublesome part of the deal. This is why becoming a notary requires years of study, and they are compensated very well for it. Users should exerce caution.
Jerry, this is a magnificent plan of action but once again, how can we avoid the Exchanges. The trouble in the U.S is just the start... It will spread worldwide extremely fast, like a virus. The moment you give your ID to the exchanges and link your bank account, your known - this is just not viable. How can we can we get around this please?
Shelley we will be building trust here primarily through what we contribute on Steem and we may combine a third party identity verification service to help show that who we are on Steem is linked to a "real" person according to a government which then will help us transact without revealing personal information. The methods of payment which reveal the least personal information will probably be preferred and it will be up to users to decide what to use and who to trust based on our recommendations.
thanks for all the help. I am still getting a grasp on things.. as a trader mostly a chartist. i wish someone had this on the Meta4 platform. if you know of any i would appreciate the direction. thanks for all the help already.
Thank you for the helpful reply @introvertspeaks - I'm familiar with Western Union & Moneygram but once you go over a certain limit, were back to ID. Payoneer might work better for the U.S only. In the U.K they forced me to provide bank details and Gov I.D even before I made the 1st transaction and then refused to delete my account when I asked and to add insult to injury, they were nice enough to block my account so I couldn't leave, so sadly, after all of this, I had to tell them where to go... So pretty much a dictatorship just like the rest if your'e based here.
Apart from this, I've also used Paxful.com with Amazon Gift vouchers which is connected with hefty fees but Anonymous none the less .
However, I know we now have Bitcoin Atm's available with similar painful fees but still effective if you're willing to pay the price. Binance I'm def on, seems fair, & I've traded & tried to transfer to my wallets but they also have a limit on the amount you need within your account before withdrawal is allowed. Any thoughts on the conception of Atomic Swaps - Seems quite exciting! I'll def check out your other 2 suggestions though.
Your'e a genius. Followed. Thank you
Thanks for keeping us informed :)
Thank you for the videos. I am trying to weed through all this and learn. The videos help.
please vote me and follow me
Sorry to be a Debbie Downer but Blocktrades is more than correct. Jerry, you need a fat legal budget for this. If you need a top lawyer to CYA, message me and I'll forward you the contact. Get it wrong and you could land in a BOP facility faster than you can say 'grand jury.'
trying to get my head around it all now.
This is not great news I am in the USA and would love to buy others Steem and SBD legally for cash but the laws seem so sketchy and would not want to get in any trouble but I think it should be made for world wide use please find a way to make it legal for the USA
@introvertspeaks exactly thank you for giving a clear example of what we are looking to create and what it is needed because you sharing about the challenges cashing out in the Philippines along with AML/KYC being unnecessary where you are transacting with anyone outside the USA shows us clearly that when we think global, we see a huge need for a Steem/fiat exchange that is user to user!
thanks for all the help
Living comments for the upvotes.
I believe there was a mistake made when I transfered SBD's for Steem Power about 10 Days ago... I'm not sure of any other way to reach you...
COIN MAN by @pocketechange
Send an email to [email protected] with details about the transaction and we'll take a look.
Also to add to this I think it’s better to find a few developers. It will cost a bit more BUT should one developer get a better offer, go rouge, get hit by a bus, retire, etc. you’ll still have a fall back dev. Don’t underestimate the time it takes to get familiar with a new codebase!
please vote me
We probably will be collaborating with an organization which runs a witness and has multiple developers available!
Dear will you please share video tutorial on leasing SP who can lease and who can lease to different boosters, which is the best way. Thanks
That is... good to know. That would certainly be an unpleasant surprise to the uninformed.
Isn't this exactly what you told him when he proposed this idea previously?
It does look very similar which is surprising given I devoted a significant part of this post to addressing exactly what @blocktrades said last time including education for users regarding applicable laws for the transactions based on location. I am also willing to exclude US users completely if the developer wants to do this and our legal advisers suggest this approach for simplicity and safety of global users.
Yes, but he seems to have misinterpreted what I said and assumed it only applied to the business doing the matching and not to the participants, and that my objection was therefore overcome by the fact that the matching system doesn't handle the money.
I suppose he thought I hadn't bothered to read his post fully and understand it. I can see why he might have thought that; this last post was pretty long and I confess I didn't read all of it. Anyways, I hope my concerns are clarified now.
Did you see where I devoted an entire section to talking about this in the post because of what you wrote in the first post? Here is the most relevant section based entirely on what you said:
Hold on, this seems to imply that the solution offsets the responsibility for fiscal due diligence onto the individuals undertaking the transaction.
Isn’t that hat hugely risky for everybody individuals using the service? I mean finance can be pretty impenetrable at the best of times. All you need is a few bad news stories and then you’ve a massive negative spotlight hanging over the thing. You really should be looking to protect users of your system, not tell them they’re on their own.
I know we all want more mainstream access, but shortcutting it isn’t the answer.
@fourfourfun the regulations are most applicable to people running entire businesses to transact money which is not obvious in the reply. An individual cashing out a little bit in earnings is unlikely to have any issues while someone buying and selling millions of dollars of Steem without compliance with the law is likely to run into the same problems as localbitcoins.
We respect users most by starting with a foundation of trust and assisting with education. Our current exchanges are based on the assumption users cannot be trusted which is why escrows and heavy restrictions are in place. People that are trusted are free to do what they please because there is no fear of what will be done. Our exchange will educate people on best practices and laws. When users abuse this trust, legal repercussions may occur.
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No thanks.
@blocktrades I agree with you, we have to pay attention with the regulations.... And in my country there aren't yet!!!
@yanosh01 exactly which is why we need an exchange for Italy that is easy to use! I think global first in what I do which helps me see outside of the rules where I live now!
@jerrybanfield the idea is very interesting. I'll wait some news
Hi im odeniz.İ just upvoted you.visit my page and follow please :)
please vote me
It is just another publication nothing more, false promises do not waste time.
You are obviously an expert on bullshit post.
This is a very sensitive issue that requires better acesorameinto in the legal part! It is important to know the regulations inherent to the topic or those that are being proposed. In my country Venezuela there are no regulations but we are interested in reliable sources of exchange and in a fair manner. And that approach that you are giving is very successful!
And what about this scam check it though
https://steemit.com/blog/@farazahmad/reality-of-sweetsssj-she-is-doing-fraud-part-2
Somebody should please help me out. I am clueless about this. Tell me how to get paid or just give me a vote or reply me. Anything please !!!
I want join with you mr. can you help me
Congratulations my friend for this post! it´s very important for us who participate often in the Steem community to know the real value of this social network based on knowledge, the blockchain is the new way to make people financial independent. Do you agree with me? Best Regards.
Sabias palabras @blocktrades
localbitcoins is probably one of the better exchanges I have ever used, It utilized a form a escrow so that the person who selling you the coins actually has to place the coins in trust with localbitcoins, while buyer and seller confirm the transaction. Though they do charge a fee that is fairly high and as well demand that you initially receive the coins into one of their wallets that based on their site, instead of them being able to be sent directly to your wallet, this annoyance make up for the extra layers of security that a site like local bitcoins offers. Now if this new platform could work on the same peer to peer methodology, while at the same time enabling the end user to use their offline and hard wallets to deposit the said coins, this will be an excellent alternative to many of the exchanges that exist today. Just my two sense.
I am agree with you
Thank you @blocktrades for sharing the security risks for the USA residents. As it seems as though we are having a difficult time with several online activities legality issues. We are slowly being targeted for several activities that will help during an economic crisis. I feel that the big day is coming when we will be disallowed to have any dealings with the Cryptocurrency Markets. It is really not fair. All we ask and want to do is be included. What harm can USA do, that other nations can't. It is ridiculous. I agree with you about the localbitcoins comment. When I first started crypto activities, localbitcoins was my first choice by recommendation. I did not know anything about bitcoins, but knew on my first login that localbitcoins is not for me or anyone else. With intentions to capitalize on beginners.
So, I really like what @jerrybanfield post and project. But, I'm really still trying to understand how the system works and the daily changes confuses me. Please do not take my comment anyway wrong. It's just that I would like to be involved and post an opinion query. And I do not want to make more wrong moves and want to make the right move, before USA gets cutout.:)
Thank you for taking the time to view my reply.
Following, updated, commented and share by:
@share4angels
follow me and vote
Saludos desde Venezuela Buen post. @adhelgeis21
folback
folback
Does this affect only US residents or US Citizens who travel around the world? My girlfriend is American and we travel since over 2.5 years around the world and she still is doing her tax in May. I am German but because I am not working in the country and I am since over 10 years not in the country I am legally a "Steuerausländer" or tax foreigner that means I don't need to pay tax.
It's a good question. US laws generally apply to US citizens even when they are traveling, but maybe if you're in another country at the time and you're not trading with an American, it might not apply. It's not really a few small trades that would get you in trouble anyways, I think, it's more if it starts to look like a business. I think there's also risk if the trades are big, because I think the "real" motivation behind this is money laundering concerns by US regulators.
Thanks for this explanation @blocktrades , it really helped me to understand a few more things about transactions and regulations.
Regards, @gold84
In as much as the idea is great ,it’s also important to let people know the implications of what they are getting into
This system is more efficient than the system of localbitcoin, because there is very vulnerable to fraud. although the reputation is qualified but not yet able to determine the trader honest 100%. maybe
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This is not good idea to put post like this. If you want to be voted be more creative?? I will give you one good example:
Do you know games like wow or lineage , maybe diablo. When you were playing online there was a lot noobs they were all the time writing "exp me plzz " or "give me some items plis". Everyone ignored them and just play to gain levels. And you know what was the problem? The problem was those noobs wasting time for chatting those annoying messages but they should just go and start exping becouse there always be someone who helping but without "help please" or other similar to spam sentence
@blocktrades ...... really interesting
@Blocktrades keep it up
@Blocktrades keep it up
Hey please check out my account!
On top of that, you've got Jerry managing it. He didn't even bother to do enough research to understand the legal issues around what he is proposing.
Enough said. Again, don't reward this junk that will never happen. I am glad to see most of these large votes were purchased and our community isn't as ignorant as Jerry thought.
Berniesanders is a tool!
Have some poo
Downvotes incoming in 3....2...1....
Seconded. Saying “it’s the seller’s responsibility to comply with local laws” means you endanger your users who aren’t knowledgeable about these local laws. Non-starter, IMO. This is why I don’t use LocalBitcoins.
Jeff thank you for replying here and reinforcing the emphasis we will place on having resources available to educate users to what laws apply. Excluding countries like the USA with the most restrictions is also an option if that is best for everyone involved.
How many Steem users are actually in the USA? I believe the percentage is less than 20% meaning the majority of users here have no need to comply with laws in the USA regarding financial transactions when not buying or selling with someone in the USA.
Localbitcoins has a huge number of users and our exchange will eventually have even more! I have never used localbitcoins either because the fees are way higher than the exchanges I can use because I live in the USA and have easy access to several exchanges. Most of the people on earth cannot say the same. Most do not have a way to easily cash out $10 or $100 or $1000 of Bitcoin into a bank account. Our exchange fills a gigantic need that might be hard to see when just considering the USA.