Inside the physical world, a bank is a lender licensed for deposits, transfer funds, and store money for its clients. Banks can legally provide you with the to certainly exchange one fiat currency for an additional to the customers.

In the digital world, a cryptocurrency exchange provides services just like banking to their clients; additionally, exchanges serve as similar to a stock exchange.

What is a cryptocurrency exchange?

A cryptocurrency exchange can be a borderline illegal online marketplace where users can exchange one kind of digital asset for another in line with the market price in the given assets. The issue with cryptocurrency exchanges is they often facilitate the trade of unregistered securities, are often used to launder money, and still have limited, if any, AML/KYC so that they can evade the law.

Cryptocurrency exchanges played an important role inside the ICO boom of 2017. Cryptocurrency exchanges were eager for new projects without any real business structure, product, or future to launch so that they could list these projects on their own exchanges and bring in vast amounts in transaction fees from these trading pairs. However, you can imagine a cryptocurrency exchange as a bucket shop.

Just what is a cryptocurrency?

There are a few features that distinguish digital currencies from cryptocurrencies.

Cryptocurrencies are coins and tokens with no real purpose-they don’t have utility plus they are intended for free over speculative purposes and to facilitate crime.

Unlike digital currencies, most cryptocurrencies do not abide by law; in fact, some cryptocurrencies were even made to evade legislation. Privacy coins are cryptocurrencies specifically designed to facilitate crime by obfuscating the way a transaction has traveled from sender to recipient.

Ultimately, cryptocurrencies are tools accustomed to enable crime, whether that be fraud, money laundering, or racketeering, while digital currencies are protocols that enable the digitization of data and your money.

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