I am considering selling Bitcoin OTC. As far as the legalities go, is it legal to anonymously trade Bitcoin for cash without taking KYC information and registering with FinCEN? I know all the "big boys" like Gox require information but I am vehemently against that and I'm too small to pay all these registration fees as well as keep up on the behemoth of AML laws. This is more for some extra side cash and to help people get BTC easily. How big of a boy do you have to be? I however do not want to do anything illegal. I do not want feds showing up at my door. What limits must I conform to in order to comply with the law?

I plan on doing local cash and bank deposits. Will a bank flag you for having $1,000/mo being deposited into your account at random locations? $10,000? $20,000? What are the limits before things get frozen and\or become illegal? Before I have to become a legitimate MSB

I want to make it clear that I do not believe in tax evasion. I plan on accurately reporting all profit made.

I do live in the US. I will be selling in the US.

I noticed this similar question (Legal issues / banking issues selling Bitcoins to people OTC?) and it mentions a limit of $1,000 per day per person. Does that mean I as a seller can not do more than $1,000 per day (since I am a person), or each individual person I deal wtih can't do over $1,000 per day?

  • I don't see how this question differs from the one you link to. – dchapes Nov 23 '13 at 19:17

Yes it is illegal to trade OTC because you will be consider a money transmitter.

As long as you file with FINCEN, you will be on the clear.

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