Digital currency exchanger
Digital currency exchangers (DCEs) or bitcoin exchanges are businesses that allow customers to trade digital currencies for other assets, such as conventional fiat money, or different digital currencies. They can be market makers that typically take the bid/ask spreads as transaction commissions for their services or simply charge fees as a matching platform.
DCEs may be brick-and-mortar businesses, exchanging traditional payment methods and digital currencies, or strictly online businesses, exchanging electronically transferred money and digital currencies. Most digital currency exchanges operate outside of Western countries, avoiding regulatory oversight and complicating prosecutions, but DCEs often handle Western fiat currencies, sometimes maintaining bank accounts in several countries to facilitate deposits in various national currencies. They may accept credit card payments, wire transfers, postal money orders, or other forms of payment in exchange for digital currencies, and many can convert digital currency balances into anonymous prepaid cards which can be used to withdraw funds from ATMs worldwide.
Some digital currencies are backed by real-world commodities such as gold.
Creators of digital currencies are often independent of the DCEs that trade the currency. In one type of system, digital currency providers, or DCPs, are businesses that keep and administer accounts for their customers, but generally do not issue digital currency to those customers directly. Customers buy or sell digital currency from DCEs, who transfer the digital currency into or out of the customer's DCP account. Some DCEs are subsidiaries of DCP, but many are legally independent businesses. The denomination of funds kept in DCP accounts may be of a real or fictitious currency.
In 2004 three Australian–based digital currency exchange businesses voluntary shut down following an investigation by the Australian Securities and Investments Commission (ASIC). The ASIC viewed the services offered as legally requiring an Australian Financial Services License, which the companies lacked.
In 2006, US-based digital currency exchange business GoldAge Inc., a New York state business, was shut down by the US Secret Service after operating since 2002. Business operators Arthur Budovsky and Vladimir Kats were indicted "on charges of operating an illegal digital currency exchange and money transmittal business" from their apartments, transmitting more than $30 million to digital currency accounts. Customers provided limited identity documentation, and could transfer funds to anyone worldwide, with fees sometimes exceeding $100,000. Budovsky and Kats were sentenced in 2007 to five years in prison "for engaging in the business of transmitting money without a license, a felony violation of state banking law", ultimately receiving sentences of five years probation.
In April 2007, the US government ordered E-gold administration to lock/block approximately 58 E-Gold accounts owned and used by The Bullion Exchange, AnyGoldNow, IceGold, GitGold, The Denver Gold Exchange, GoldPouch Express, 1MDC (a Digital Gold Currency, based on e-gold) and others, forcing G&SR (owner of OmniPay) to liquidate the seized assets. A few weeks later, E-Gold faced four indictments. Here is the DoJ release  and here is the rebuttal by Douglas Jackson, CEO.
In July 2008, Webmoney changed its rules, affecting many exchangers. Since that time it became prohibited to exchange Webmoney to most popular e-currencies like E-gold, Liberty Reserve and others.
Also in July 2008 E-gold's three directors accepted a bargain with the prosecutors and plead guilty to one count of "conspiracy to engage in money laundering" and one count of the "operation of an unlicensed money transmitting business". E-gold ceased operations in 2009.
In 2013, Jean-Loup Richet, a research fellow at ESSEC ISIS, surveyed new money laundering techniques that cybercriminals were using in a report written for the United Nations Office on Drugs and Crime. A common approach to cyber money laundering was to use a digital currency exchanger service which converted dollars into Liberty Reserve and could be sent and received anonymously. The receiver could convert the Liberty Reserve currency back into cash for a small fee. In May 2013, digital currency exchanger Liberty Reserve was shut down after the alleged founder, Arthur Budovsky Belanchuk, and four others were arrested in Costa Rica, Spain, and New York "under charges for conspiracy to commit money laundering and conspiracy and operation of an unlicensed money transmitting business." Budovsky, a former U.S. citizen and naturalized Costa Rican, was convicted in connection with the 2006 Gold Age raid. A U.S. indictment said the case "is believed to be the largest international money laundering prosecution in history." More than $40 million in assets were placed under restraint pending forfeiture, and more than 30 Liberty Reserve exchanger domain names were seized. The company was estimated to have laundered $6 billion in criminal proceeds.
List of bitcoin exchanges
|Title||Country||Fiat money||Bitcoin||Altcoins||Commodity||Trade Fee||Decentralized||Website||Notes|
|247exchange||Belize||Yes||Yes||Yes||No||n/a||No||https://www.247exchange.com/||Accepts credit and debit cards, has banking payment options in different currencies and cash accepting network (400,000 locations worldwide). Licensed money exchanger.|
|BitStamp||UK||Yes||Yes||Yes||No||0.2 - 0.5%||No||https://www.bitstamp.net/||n/a|
|Bity||Switzerland / Europe||Yes||Yes||No||No||N/A||No||https://bity.com/||Bity is the Safe, Simple & Fast way to Buy & Sell your Bitcoin. Swiss-registered with the highest regulation and security. With just phone verification get up to 250 EUR/CHF. The payment methods available are SOFORT, SEPA and bank transfer.|
|Btc.sx||UK / Singapore||No||Yes||No||No||0.5%||No||https://btc.sx/||Allows Leveraged Trading.|
|BitX||Indonesia / Kenya / Nigeria / Malaysia / South Africa||Yes||Yes||No||No||0% - 1%||No||https://bitx.co/||Maker-taker structure: 0% fee for market maker, 1% fee fee for market taker. No limit orders available for Indonesia, Instant buy/sell only.|
|Circle||USA||Yes||Yes||No||No||n/a||No||https://www.circle.com/||Links credit card to account.|
|CleverCoin||Netherlands||Yes||Yes||No||No||0.3%||No||https://www.clevercoin.com/||Accepts credit cards for European users, margin trading, sophisticated API.|
|CoinCorner||UK||Yes||Yes||No||No||1%||No||https://www.coincorner.com/||Accepts credit and debit cards.|
|Coinfloor||UK||Yes||Yes||No||No||0.08 - 0.55%||No||https://www.coinfloor.co.uk/||n/a|
|Cryptopay||UK||Yes||Yes||No||No||1%||No||https://cryptopay.me||Accepts UK faster payments and SEPA bank transfers. Users can store in EUR, GBP and BTC. Additionally, Cryptopay VISA Debit Card is available.|
|Cryptonit||UK||Yes||Yes||Yes||No||0.15%||No||https://cryptonit.net/||Obtained official response from FCA regarding cryptocyrrency regulation in UK. Accepting International wire/SEPA, SOFORT, Western Union, Moneygram, PerfectMoney, Okpay, PayPal, Skrill, Astropay (for LATAM users)|
|Cryptsy||US||Yes||Yes||Yes||N0||0.0%||No||http://www.cryptsy.com||Accepts fiat deposit, multiple alt coin exchange|
|FinCCX||Finland||Yes||Yes||No||No||0 - 0.35%||No||https://finccx.com||Supports EUR, USD. Maker-taker fee structure. Allows earning 0.05% fee for price-makers.|
|Gatecoin||Hong Kong||Yes||Yes||No||No||0.05 - 0.35%||No||https://gatecoin.com/||n/a|
|Gemini||US||Yes||Yes||No||No||0.25%||No||https://gemini.com/||Founded by the Winklevoss twins.|
|HitBTC||Estonia||Yes||Yes||Yes||No||0.25%||No||https://hitbtc.com/||Allows to manage your own exchange tools for professional trading.|
|Independent Reserve||Australia||Yes||Yes||No||No||0.10 - 0.50%||No||https://www.independentreserve.com/||Multi-Currency order book, allows trading in AUD, USD, NZD|
|igot||Australia||Yes||Yes||No||No||0.00 - 1%||No||https://www.igot.com/||Wallet, Multi Currency order book, allows trading in AUD, USD, NZD, EUR, GBP, INR, AED, SGD, HKD, KES|
|Incryptex||Canada||Yes||Yes||Yes||No||0.2 - 0.50%||No||https://www.incryptex.com||n/a|
|itBit||Singapore||Yes||Yes||Yes||No||0.35 - 0.50%||No||https://www.itbit.com/||n/a|
|Kraken||USA||Yes||Yes||Yes||No||0.05 - 0.01%||No||https://www.kraken.com/||n/a|
|LocalBitcoins||Finland||Yes||Yes||No||No||1%||Yes||https://localbitcoins.com||All countries and currencies, p2p bitcoin marketplace for optional escrow|
|LakeBTC||China||Yes||Yes||No||No||0 - 0.2%||No||https://www.lakebtc.com/||Support USD, SEK and CNY.|
|Mycelium||Austria||Yes||Yes||No||No||0.2%||Yes||https://mycelium.com/localtrader||Android wallet and trader. All countries and currencies, p2p bitcoin marketplace for optional escrow|
|Mt. Gox||Japan||Yes||Yes||No||No||n/a||No||n/a||Shutdown in 2014|
|The Rock Trading Ltd||Malta||Yes||Yes||Yes||No||0.075% - 0.50%||No||https://www.therocktrading.com||Accepts international wires, SEPA, OkPay. Ripple Gateway. Prepaid card linked to the account.|
|UseCryptos||Portugal||Yes||Yes||Yes||No||0.05% - 0.35%||No||https://usecryptos.com||n/a|
- Digital currency
- Digital gold currency
- Bureau de Change
- Gold as an investment
- List of Bitcoin companies
- "Digital Currency Exchanger (DCE) Definition". Investopedia Dictionary. Investopedia US, a division of ValueClick, Inc. Retrieved 11 January 2014.
- Working Group on Typologies (18 October 2010). "Draft Report on Money Laundering and Terrorist Financing through New Payment Methods" (PDF). Paris: Financial Action Task Force.
- "Substantiation – Money laundering in digital currencies (Unclassified)". Money Laundering in Digital Currencies. National Drug Intelligence Center, US Department of Justice. June 2008. Retrieved 11 January 2014.
- Sood, Aditya K; Enbody, Richard J; Bansal, Rohit (2013). "Cybercrime: Dissecting the State of Underground Enterprise" (PDF). IEEE Internet Computing (1). IEEE Computer Society. pp. 60–68.
- Byrnes, William H.; Munro, Robert J. (2 October 2013). Money Laundering, Asset Forfeiture and Recovery and Compliance – A Global Guide. LexisNexis. p. 2802. ISBN 978-0-327-17084-6. (Page number assigned by Google Books.)
- Hesterman, Jennifer L (17 April 2013). The Terrorist-Criminal Nexus: An Alliance of International Drug Cartels, Organized Crime, and Terror Groups. CRC Press. p. 218. ISBN 978-1-4665-5761-1.
- "ASIC acts to shut down electronic currency trading websites" (Press release). Australian Securities & Investments Commission. 9 November 2004. Archived from the original on 23 March 2011. Retrieved 9 January 2014.
- McCullagh, Declan (30 March 2001). "Secret service raids Gold-Age". Wired. Condé Nast. Retrieved 9 January 2014.
- Boddiger, David; Arias, L (24 May 2013). "Millions of dollars in limbo after shuttering of digital currency site Liberty Reserve". The Tico Times. San José, Costa Rica. Retrieved 9 January 2014.
- "www.omnipay.com is offline". Retrieved 24 February 2015.
- "#07-301: 04-27-07 Digital Currency Business E-Gold Indicted for Money Laundering and Illegal Money Transmitting". Usdoj.gov. 2007-04-24. Retrieved 2013-12-11.
- "e-goldÂ® Founder Denies ...". Archived from the original on 4 June 2009. Retrieved 24 February 2015.
- https://newsblog.wmtransfer.com/asp/messages.asp?date=2008-7-23&blogID=6[dead link]
- Grant Gross (2007-07-22). "IDG News Service Internet currency firm pleads guilty to money laundering". Archived from the original on 2009-04-14.
- Richet, Jean-Loup (June 2013). "Laundering Money Online: a review of cybercriminals methods". arXiv. Retrieved 20 October 2013.
- "Written testimony of U.S. Secret Service for a Senate Committee on Homeland Security and Government Affairs hearing titled "Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies"". United States Department of Homeland Security. 18 November 2013. Retrieved 11 January 2014.
- Matonis, Jon (28 May 2013). "U.S. Shuts Currency Exchange Allegedly Tied To $6B In Money Laundering". Forbes. Forbes.com LLC. Retrieved 11 January 2014.
- "Digital currency biz Liberty Reserve shut down, founder arrested | VentureBeat | Security | by Sean Ludwig". VentureBeat. Retrieved 2013-12-11.
- "Bitcoin In Minutes: Over 400 000 Locations Worldwide for Instant Buying and Selling Cryptocurrencies Added By 247exchange.com and MoneyPolo" (Press release). 28 April 2015.