BitCoin Use Safety, Very Basic Question.

F

FJMcC

I really don't want to go into the specifics of my business, however, international partners that I transact with frequently are pushing us toward BC as the preferred funding method.

In short, I would be converting USD to BC, sending them off to a firm that converts them back to USD at prevailing rate at time of transaction. When I am paid, they simply convert back to BC at prevailing rate and transfer back to my wallet. At this point I can convert and wire USD to my bank. I have no interest in holding BC or speculating in its value, so I guess I will only be holding them long enough to complete the process.

I am not using this method to evade taxes or anything like that, but it all seems so strange that I am wary of diving head first without a little advice.

I would appreciate any advice regarding the above process. Firms or exhanges to use, what kind of wallet to have for best security, and any problems I may have with my bank accepting largish transfers from a BC exchange on a pretty consistent basis.

Thanks in advance for the free advice. :)
 
Regular transfers from a BTC exchange to and from a US bank will begin to look like money laundering after a while. If everything is truly aboveboard, why not just do normal USD wire transfers?
 
Well, a lot of foreign wires into a US account are also big red flags, regardless of source. I was hoping that a US bitcoin exchange might be different at least. Also the BC transactions look way cheaper, and the firms I do business with much prefer BC for a variety of reasons.
 
Bitcoin exchanges are held to the "know your customer" standard in order to allow customers to convert to USD. That means they're watching for red flags same as banks.
Something else to consider is how much cashflow we're talking about. Bitcoin exchanges don't necessarily have that much USD on hand for cash-outs (transfers to banks). Your best bet is to identify the most reputable (i.e. not in Latvia or wherever) and contact them.

The safest thing is to do as much business in BTC as possible and only convert to USD when absolutely necessary.
 
stevegee58 said:
Bitcoin exchanges are held to the "know your customer" standard in order to allow customers to convert to USD. That means they're watching for red flags same as banks.
Something else to consider is how much cashflow we're talking about. Bitcoin exchanges don't necessarily have that much USD on hand for cash-outs (transfers to banks). Your best bet is to identify the most reputable (i.e. not in Latvia or wherever) and contact them.

The safest thing is to do as much business in BTC as possible and only convert to USD when absolutely necessary.
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Thanks for the thoughtful reply. I am not too worried about the legality of what I am doing, but the idea that an "exchange" wouldn't be liquid enough to handle 50 or 100k of action is quite a concern. Are the bid ask prices huge? Are there reputable daily volume numbers for individual exchanges? Is there a "gold standard" of Bitcoin exchanges that is the first place i should check out?
 
FJMcC said:
Thanks for the thoughtful reply. I am not too worried about the legality of what I am doing, but the idea that an "exchange" wouldn't be liquid enough to handle 50 or 100k of action is quite a concern. Are the bid ask prices huge? Are there reputable daily volume numbers for individual exchanges? Is there a "gold standard" of Bitcoin exchanges that is the first place i should check out?
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In my opinion, Coinbase is probably the easiest way to get started in the USA. You can trade Bitcoin using Coinbase's exchange GDAX:

https://www.gdax.com/

Look at their demo to see approximate volumes on the bid and offer. There are probably more liquid exchanges, but I haven't looked into it.

However, another thing is that with all the bitcoin transactions, you are going to make your tax burden more complex.
 
sprstpd said:
In my opinion, Coinbase is probably the easiest way to get started in the USA. You can trade Bitcoin using Coinbase's exchange GDAX:

https://www.gdax.com/

Look at their demo to see approximate volumes on the bid and offer. There are probably more liquid exchanges, but I haven't looked into it.

However, another thing is that with all the bitcoin transactions, you are going to make your tax burden more complex.
More...
Just checked out gdax. Not sure if their Demo is accurate, but they are showing 8k BTC volume for the last 24 hour period, which is great, but the order book as of 2:00 vegas time is like fractions of a bitcoin deep at the first 6 or 7 B/A levels and then only like 4-6 BTC's after that. Are there real busy times? Looks like trying to buy 100 BTC you might wipe out the whole order book, lol.

Ok, you can do 100 at about a 13 dollar spread on there right now. So like a 2-3 percent. Pretty bad. I guess you could work the book, but that adds a lot of risk.
 
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sounds more like a classic tale of money laundering to me. The transactions you described hardly leave room for any other explanation. Else why would USD and BC have to be converted back and forth via different agents? Makes zero sense, if they convert back to a fungible currency anyway why not directly sending and receiving USD or any non BC currency of choice?

And you saying "and the firms I do business with much prefer BC for a variety of reasons." does not raise any big fat red flags for you? If you are on the ethical and legal side of things as you claim there should be some alarm bells ringing in your mind by now. Simply what you described will get you on the lists of bank supervision, potentially even the FBI or other local watchdog. You are warned.

FJMcC said:
I really don't want to go into the specifics of my business, however, international partners that I transact with frequently are pushing us toward BC as the preferred funding method.

In short, I would be converting USD to BC, sending them off to a firm that converts them back to USD at prevailing rate at time of transaction. When I am paid, they simply convert back to BC at prevailing rate and transfer back to my wallet. At this point I can convert and wire USD to my bank. I have no interest in holding BC or speculating in its value, so I guess I will only be holding them long enough to complete the process.

I am not using this method to evade taxes or anything like that, but it all seems so strange that I am wary of diving head first without a little advice.

I would appreciate any advice regarding the above process. Firms or exhanges to use, what kind of wallet to have for best security, and any problems I may have with my bank accepting largish transfers from a BC exchange on a pretty consistent basis.

Thanks in advance for the free advice. :)
More...
 
conduit said:
sounds more like a classic tale of money laundering to me. The transactions you described hardly leave room for any other explanation. Else why would USD and BC have to be converted back and forth via different agents? Makes zero sense, if they convert back to a fungible currency anyway why not directly sending and receiving USD or any non BC currency of choice?

And you saying "and the firms I do business with much prefer BC for a variety of reasons." does not raise any big fat red flags for you? If you are on the ethical and legal side of things as you claim there should be some alarm bells ringing in your mind by now. Simply what you described will get you on the lists of bank supervision, potentially even the FBI or other local watchdog. You are warned.
More...

I know i am not breaking any laws of my jurisdiction. I intend to pay taxes in full. I pretty much assumed that in this day and age my transactions will raise red flags. Given the relative anonymity of crypto currencies, won't pretty much any consistent stream of transactions from a BC exchange into an American bank raise the same flags then? Is BC tragically flawed because of this?
 
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