DCEs may be decree bitcoin wiki-and-mortar businesses, exchanging traditional payment methods and digital currencies, or strictly online businesses, exchanging electronically transferred money and digital currencies. 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. The ASIC viewed the services offered as legally requiring an Australian Financial Services License, which the companies lacked. New York state business, was shut down by the US Secret Service after operating since 2002. In July 2008, Webmoney changed its rules, affecting many exchanges. Since that time it became prohibited to exchange Webmoney to the 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”. 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.
Following the launch of a decentralized cryptocurrency bitcoin in 2008 and the subsequent introduction of other cryptocurrencies, many virtual platforms were created specifically for the exchange of decentralized cryptocurrencies. Their regulation differs from country to country. The US Securities and Exchange Commission maintains that “if a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration”. In Japan to operate a cryptocurrency exchange a special license must be obtained from the Financial Services Authority of Japan specifically for the operation of a virtual currency exchange.
Over-the-counter or off-the-exchange trading of bitcoins is a more flexible and convenient way of trading bitcoins comparing to traditional exchanges. OTC trading has kept growing since 2014 in various financial markets as more institutions taking the trades off the exchange. Today, many corporations or institutions employ individual traders or bitcoin-OTC trading desks to perform this task at moderate expenses. Some representatives bitcoin-OTC trading desks could be Bitfinex. The quotes given by OTC trading desks are generally in line with the main bitcoin trading desks, such as coindesk, localbitcoins, bitstamp, btcxindia, zebpay. Experienced OTC traders would fill large orders with multiple smaller orders outstanding in the public order book thus to avoid predatory pricing behaviours in the bitcoin markets. Title Country Fiat money Bitcoin Altcoins Trade fee Settlement Min.
Best Cryptocurrency Exchanges: The Ultimate Guide”. National Drug Intelligence Center, US Department of Justice. Cybercrime: Dissecting the State of Underground Enterprise”. Page number assigned by Google Books. Millions of dollars in limbo after shuttering of digital currency site Liberty Reserve”.