Cryptocurrency exchange

Cryptocurrency exchanges or digital currency exchanges are businesses that allow customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money, or different digital currencies.

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.

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 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. 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 exchanges. 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." A U.S. indictment said the case "is believed to be the largest international money laundering prosecution in history." The company was estimated to have laundered $6 billion in criminal proceeds.

List of some notable digital currency exchanges

Title	Country	Fiat money	Bitcoin	Altcoins	Commodity	Trade Fee	Decentralized
Btc.sx		No	Yes	No	No	0.5%	No
CEX.IO		Yes	Yes	Yes	Yes	0.2% - 7%	No
BTCChina		Yes	Yes	Yes	No	0%	No
bx.in.th		Yes	Yes	Yes	No	0.25%	No
Coincheck		Yes	Yes	Yes	No	-0.05% - 0.15%	No
Coinfloor		Yes	Yes	No	No	0.08 - 0.55%	No
Coinbase		Yes	Yes	Yes	No	1%	No
Gatecoin		Yes	Yes	Yes	Yes	0.02 - 0.35%	No
GDAX		Yes	Yes	Yes	No	0.1% to 0.25%	No
Gemini		Yes	Yes	No	No	-0.15% (rebate) to 0.25%	No
Kraken		Yes	Yes	Yes	No	0.05 - 0.50%	No
LocalBitcoins		Yes	Yes	No	No	1%	Yes
Luno		Yes	Yes	No	No	0% - 1%	No
ANX		Yes	Yes	Yes	No	0.3%-0.6%	No

Over the counter trading (OTC)

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.com, itBit, Coinfloor, Octagon Strategy Limited, LocalBitcoins, Bitstamp, BitX etc.

Quote

The quotes given by OTC trading desks are generally in line with the main bitcoin trading desks, such as coindesk, localbitcoins, bitstamp, btcxindia, zebpay.

=== Preserve Market Stability in the bitcoin markets.

List of some notable bitcoin OTC desks

Title	Country	Fiat money	Bitcoin	Altcoins	Trade fee	Settlement	Min. Limit (no. of btc)
Bitfinex.com		No	Yes	Yes	0.1 - 0.2%	NA	NA
itBit		Yes	Yes	No	0.1% per transaction	T+0	100
Coinfloor		Yes	Yes	No	0.1 - 0.38%	T+0	NA
Octagon Strategy		Yes	Yes	Yes	0.1-0.5%	T+0	NA
LocalBitcoins	Worldwide	Yes	Yes	No	0.0001 - 0.0010 BTC per outgoing transfer	NA	NA
Bitstamp		Yes	Yes	No	0.1 - 0.35%	NA	NA
BitX		Yes	Yes	No	0.1%	NA	250

Note that beginning April 18, 2017 BitFinex stopped accepting FIAT deposits, and even though the exchange interface still shows USD trading pairs, they are actually USDT trading pairs.

See also

• Cryptocurrency
• Bitcoin
• Digital currency
• Digital gold currency
• Bureau de Change
• Gold as an investment
• List of Bitcoin companies

Source

http://wikipedia.org/