I looked into legally building an exchange in Texas, but I would have to get licensed as a money transmission company or a currency exchange company. The fees were outrageous! $2,500 application fee, $300,000+ security deposit and requires the applicant to have over $500K net worth.
The service seems to imply a business model where there are lots of little operators would open an exchange if they weren't so capital constrained such that they can't roll their own.
But how many with 500k to play around with are going to then want to pay 1 percent? Even if there are a bunch of people just waiting to sign up - then the competition is going to see their margins evaporate - with no air to breathe over and above that 1%. What else are they going to compete on besides price?
Either that or I just don't understand this business model at all. Best of luck to them though.
Doesn't it cost $30 million to get licenses in all the states that required it?
That certainly seems like a broken system. I'm not sure why there isn't a federal law or an agreement between states that one license can be used across states.
I've read that laws like this exist because of lobbying done by Western Union.
Contrasting with the EU. One license in any EU state means you can provide services across the EU.