Sunday, May 26, 2013

Digital currency exchanger


Digital currency exchanger

From Wikipedia, the free encyclopedia
Digital currency exchangers (DCEs, independent exchange providers or e-currency exchangers) are market makers which exchange fiat currency for electronic money, such as digital gold currency (DGC), and/or convert one type of digital currency (DC) into another, such as Liberty Reserve into pecunix. Exchangers apply either a commission or bid/offer spread to transactions.
Some digital gold currency accounts, such as e-gold, do not provide an in-house service to purchase their private currency so it is necessary to use a third-party digital currency exchanger. According to e-gold's website the reason they do not provide an in-house exchange service is so there can be no debt or contingent liabilities associated with the business, making e-gold Ltd. absolutely free of any financial risk. They claim e-gold Ltd. does not possess currency of any nation or even have a bank account.

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[edit]Risks

There are no specific financial regulations governing DCEs, so they operate under self-regulation. However the Global Digital Currency Association (GDCA), founded in 2002, are a non-profit association of online currency operators, exchangers, merchants and users. On their website they claim their goal is to "further the interests of the industry as a whole and help with fighting fraud and other illegal activities, arbitrate disputes and act as escrow agent when and where required." [1] GDCA is a privately owned organization and not an association of its members per se. Its views and opinions are highly subjective. It is completely irrelevant whether or not any of the exchange companies are members of GDCA.[citation needed]
It is possible for clients to purchase DGC by credit card, and therefore receive consumer protection from their credit card company. Various exchangers offer this service, although the exchange fees are typically higher than using a wire transfer[2]

[edit]Exchangers

Comparison of Digital Currency Exchangers (DCEs) as of 18 April 2010:
Digital Currency ExchangerYear
founded
GDCA
member
TelephoneTelefaxemailDigital
currencies
 (DC) accepted
Fiat currencies acceptedFee buying DCFee selling DCFee exchanging DC to DC
WMXchange.net2009Green tickGreen tickGreen tick10any5-8%5–8%0-5%
LinkflyExchange.com2010Green tickGreen tickGreen tick6any1–3%1–3%1–5%
wmBroker.eu2008Green tickGreen tickGreen tick11any0–3%0–3%3–5%
e-forexgold.com2000Green tickGreen tickGreen tick7any2–5%2–7.5%3–7.5%
PlanetWM.com2009Green tickGreen tick731–5%1–5%1–8%
Money Central Market2007Green tickRed X232.99%-4.99%4.99%-6.99%0–5%
CurrEx2007Red XGreen tick30N/AN/A0–5%
SaveChange.ru2007Green tickGreen tick503%–5%5%0–5%
Euro Gold Sales2004Green tickGreen tick232.5%–4%%1.9%N/A
ExchEngine2004Green tickGreen tick5 ? ? ? ?
GoldExchange.eu2005Green tickGreen tick321.9–2.9%1.9%N/A
ecardone.com2009Green tickGreen tick321.9–2.9%4.0%-5%+5%
GoldNow1999Green tickGreen tick495%5%5%
goldtotem2005Red XGreen tick433–5%0.75–1.5%1.5–3%
IntlExchange.com2005Green tickGreen tick9102%1%1.5%
citichanger.com2010Green tickGreen tick55US$2.00US$2.00US$2.00
NetPay2001Red XRed X ? ? ? ? ?
ROBOXchange2002Green tickGreen tick140N/AN/A1–5%
SpeedyExchange2003Green tickRed X (answerphone)738–13%1.5–9%0.3–4.4%
Webmoney.co.nz2004Green tickRed X315–7%3%0–5%
Wm-center.com2005Green tickGreen tick1131.5–6%1–8%0–10%

[edit]Regulatory issues

In September 2004 several Australian based e-gold currency exchangers voluntarily ceased operation as they did not hold an Australian Financial Services licence (AFSL) [3]. Australian based DCEs that elected to close, due to theAustralian Securities and Investments Commission (ASIC) licencing requirements, included:
  • goldex.net
  • sydneygoldsales.com
  • ozzigold.com
In July 2006 Gold Age was closed down by US government authorities following the arrest of the owners, Arthur Budovsky and Vladimir Kats, on account of not having a New York state "money transmitters" licence.
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, and forced G&SR (owner of OmniPay) to liquidate the seized assets [4]. In addition, a few weeks later, e-gold themselves were indicted with 4 indictments. However, e-gold are still in business, and are growing at the rate of approximately 95,000 new accounts per month [5]. Here is the DoJ release [6] and here is the rebuttal by Douglas Jackson, CEO [7][dead link](archive.org copy).
In July 2008, Webmoney changed its rules, that affected many exchangers. Since that time it became prohibited to exchange Webmoney to most popular e-currencies like e-Gold, Liberty Reserve and others:https://newsblog.wmtransfer.com/asp/messages.asp?date=2008-7-23&blogID=6

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