How encouraging…you’ve just told the poor fellow that even if he does everything right he could still go to jail–you’re making him feel like an ethnic minority!
In most cases though, if a lawyer tells you you won’t go to jail, you probably will not go to jail. Newlibertstandard uses paypal, which already practices know-your-customer and he is operating in amounts less than $10,000 which is what the money laundering and tax cheat police sniff out for. This means he is unlikely to be doing anything that is wrong OR anything that will attract the attention of Law Enforcement.
Thinking ahead to bitcoin’s future–money changing services that operate on a large scale and don’t practice know-your customer would indeed be illegal and would thus have to operate within the onionverse, changing bitcoin to money services other than paypal (perhaps offshore based like pecunix).
Another idea would be for some future crypto-preneur to set up a Mom and Pop shop called “Grandpa Joe’s envelopes stuffed with cash” and only accept bitcoin as payment. lol.
When there’s enough scale, maybe there can be an exchange site that doesn’t do transfers, just matches up buyers and sellers to exchange with each other directly, similar to how e-bay works.
To make it safer, the exchange site could act as an escrow for the bitcoin side of the payment. The seller puts the bitcoin payment in escrow, and the buyer sends the conventional payment directly to the seller. The exchange service doesn’t handle any real world money.
This would be a step better than e-bay. E-bay manages to work fine even though shipped goods can’t be recovered if payment falls through.
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