Within the physical world, a bank is often a traditional bank licensed for deposits, transfer funds, and store money because of its clients. Banks can legally offer the right to exchange one fiat currency for an additional to the customers.

Within the digital world, a cryptocurrency exchange provides services similar to banking to their clients; additionally, exchanges function as similar to a stock trading game.

Just what is a cryptocurrency exchange?

A cryptocurrency exchange is really a borderline illegal online marketplace where users can exchange one kind of digital asset for another depending on the market value in the given assets. The challenge with cryptocurrency exchanges is that they often facilitate the trade of unregistered securities, can be used to launder money, and also have limited, or no, AML/KYC in order to evade the law.

Cryptocurrency exchanges played a tremendous role within the ICO boom of 2017. Cryptocurrency exchanges were eager for new projects with no real business structure, product, or future to file for so that they could list these projects on their own exchanges and rake in huge amount of money in transaction fees from these trading pairs. That being said, you can imagine a cryptocurrency exchange as a bucket shop.

What is a cryptocurrency?

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

Cryptocurrencies are coins and tokens without having real purpose-they will not have utility and they were created for nothing a lot more than speculative purposes and to facilitate crime.

Unlike digital currencies, most cryptocurrencies tend not to comply with law; the truth is, some cryptocurrencies were even built to evade regulations. Privacy coins are cryptocurrencies specifically made to facilitate crime by obfuscating the road a transaction has traveled from sender to recipient.

Ultimately, cryptocurrencies are tools employed to enable crime, whether that be fraud, money laundering, or racketeering, while digital currencies are protocols which allow the digitization of information and money.

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