In that spirit, we have compiled information on the most prominent exchanges so you are better informed about who you are doing business with.
Coinbase is an American online wallet and exchange. Though they claim they are open to customers around the world, their service only works well for American customers as they allow them to link their bank accounts to their online wallets, and hence can easily deposit and withdraw their funds.
Their domain is registered as follows:
548 Market Street, #23008
They were founded in June 2012 and have raised a massive $106 million in venture capital.
They registered with FinCen in 2013 and are trying to get state approval – according to their blog they are now approved in 24 different states.
As is the case with all FinCen regulated companies, their verification is tough (you are required to upload documents and they do credit checks), and they will also close any accounts that look to be sending or receiving bitcoins from businesses that are illegal in the USA (such as gambling).
You can only trade bitcoins against dollars on Coinbase – they do not deal with other currencies or with altcoins.
Coinbase say they have expanded to 18 different European markets, but do not have banking or regulation in Europe, so any European dealing with them will have to send and receive euros via expensive wire transfers, though they have added funding by credit or debit card for UK members.
Kraken.com bills itself as the biggest euro-denominated exchange, and was founded in 2011. However the company is California based, so it’s jurisdiction is the United States.
The domain is registered as follows:
625 S ST.
Jesse Powell is listed on Kraken’s website as CEO and co-founder of Payward Inc, the company that owns the Kraken website.
According to Bloomberg, Payward Inc is based in San Francisco at the following address:
548 Market Street
San Francisco, CA 94104-5401
Note they seem to be neighbours to the Coinbase people (same address different suite). Bloomberg lists Michael Gronager as the Chief Operating Officer.
They have raised venture capital – $5 million was raised in March 2014.
They trade Bitcoin against Euros, Dollars, Yen and Pounds, and also allow people to trade litecoins, dogecoins, namecoin, stellar, ripple and ven against bitcoin.
Part of the reason they dominate the euro-bitcoin trade is because they bank in Luxembourg, which allows them to process Euro SEPA payments from European banks easily (deposits and withdrawals). They also bank in Japan which enables them to do Japanese bank withdrawals and payments. Dollars and Sterling require wire transfers and a higher level of verification. Note that people from Germany and Japan must have ID verification before they can use this exchange. Other Europeans just need name, address and verified phone numbers.
Bitstamp.net is a European exchange based in Slovenia.
Their domain is registered as follows:
Bitstamp’s website lists offices in the UK, Luembourg and the United States, but it is thought these are the official registered offices for company listings, and the business itself operates out of Slovenia.
Verification is tough on this exchange – this is rumoured to be at the request of their banks, which are Slovenian based (some Slovenian banks have been bailout by the Slovenian government and all banks there are being cautious in case they too need help).
Note there have been issues with some European banks blocking SEPA transfers from Bitstamp’s bank – see the following thread for up-to-date information about which particular banks have issues.
Their exchange allows trade of bitcoins against dollars only.
BTC-E is the oldest surviving bitcoin exchange, (they were founded in 2011 before Kraken). No-one actually knows who owns them or where they are based.
Their domain registry is private – and the privacy organisation that handles all their mail is based in Auckland, New Zealand. However, in the past, their domain has been listed as belonging to Svetleichi Dmitri, with an address in Russia. There have been some rumours that they operate out of Bulgaria, but no-one has been able to pin down an address.
Some criminal types have tried to use this shadowy exchange to tumble and withdraw their coins, but BTC-E is clearly keen to discourage this behavior – recently they traced and halted the withdrawal of stolen coins – however it is not clear what then happened to those stolen coins, all we know is that the thieves were unable to cash out.
You can trade bitcoins against dollars, euros and roubles, as well as altcoins like litecoin, namecoin, novacoin and peercoin (they are very old school – they’ve refused to add any of the new altcoins launched from 2013 onwards). To trade there, you need to use wire transfers or Western Union.
Please note that all the above exchanges charge fees for trades, that is how they earn their money. I have omitted the fee-less Chinese exchanges on the basis that where there are no fees, you the customer are the product (either your information is likely to be sold, or the exchange uses coins you have deposited to trade against you). If something seems too good to be true, it is! Be safe out there.