How to Start a Bitcoin Exchange Business
To start a Bitcoin Exchange Business your bitcoin exchange website script must have the following things.
The first question is whether you want to operate globally (e.g. Bitfinex or BitStamp) or focus on a national market (e.g. FlowBTC, meXBT). The next step is to seek legal counsel to help decide where you want to locate and how to incorporate/structure your business.You want to think about how you can limit your liability and exposure to litigation, as well as what regulatory/compliance requirements are in your jurisdiction, and what they are likely to be in ther near term. Merkle Tree offers a useful high-level global map of the regulatory landscape.
- What sorts of banking relationships do I need and how can I secure them?
- Note that banks can be heistant to provide services to digital currency exchanges.
Tech + Security
You or a partner need to build and maintain complex architecture that pairs orders, executes transactions, and manages deposits and withdrawals. Major componets are:
- Matching engine
- Risk management system
- Accounting/audit system
- Wallet management
- Payment gateways
Security is understandably paramount. Some things to consider:
- Sound internal security procedures among your team - see, e.g. CryptoCurrency Security Standard (CCSS)(incredibly important, and often overlooked)
- Network and hardware security (secure data center, etc.)
- KYC (Know Your Customer) + AML (Anti-Money Laundering) solutions
- Two-Factor Authentication for users