US Citizen + Offshore Account for Bitcoin Buying/Selling

[imfrenchie]

Hi,

First off, I'd like to stay this forum is great. I've read a bunch of threads and got a lot of good info. That being said, I'm looking for some additional information, confirmation of a things, etc., and I thank everyone in advance for replying.

I've been buying and selling bitcoin on the side to others, and I've started to make money and would like to make it into a business. I do have a personal account with two exchanges.

Goal 1: To setup a business entity and bank account that will allow me to transfer money in and out and a bitcoin exchange that supports it. I'm assuming Kraken would be a good choice, but if not, can you please suggest?

Goal 2: High risk merchant account. I've currently been using paypal to accept CC for certain customers, but I want to move away from paypal.

A few things: I'm don't want to particularly hide what I am doing, just not pay high tax since I'm a US Citizen. But if I can avoid taxes all together, that would be fantastic! I'm ok traveling to said location to open account and such. I would like to open the account on budget. I don't have $50k+ to open this account.

Questions:

1: I read in a post that if you are US Citizen, there is some CFD or something like that which makes you disclose all offshore business in your taxes. Is this accurate? If so, why bother opening an offshore business/account?

2: Is it possible to have this offshore account not be owned by me, but I guess owned by an "nameless" entity but still control everything? If yes, would it still be possible to open up a business account with a bitcoin exchange?

3: Someone mentioned you need to have a money transmitter permit to if you are buying bitcoin and selling to others. If this is true, is my whole idea DOA?

Thank you all again in advance for the help!

 

[Martin Everson]

is my whole idea DOA?

Yes

 

[imfrenchie]

Yes

I've read online that you are able to partner with a business that has a money transmitter permit and you'd be there agent, etc., you don't need to have your own money transmitter permit. Does this apple if I am able to find a merchant payment processor that will allow me to process payments when selling the coins?

Thanks.

 

[blizz]

a merchant payment processor that will allow me to process payments when selling the coins?

you mean you can use the merchant account to process payments on behalf of others? if so, NO it's called aggregation and is forbidden by the payment processors.

 

[Martin Everson]

I've read online that you are able to partner with a business that has a money transmitter permit and you'd be there agent, etc., you don't need to have your own money transmitter permit. Does this apple if I am able to find a merchant payment processor that will allow me to process payments when selling the coins?

Thanks.

Perhaps you mean white labeling of a provider with a license? With an EU FI for example you can passport with their license into another EU country with your own brand name, website etc and provide services. You just personally need to pass basic AML and the provider you are working with has to offer you use of their license and passporting rights.

 

[imfrenchie]

you mean you can use the merchant account to process payments on behalf of others? if so, NO it's called aggregation and is forbidden by the payment processors.

Thanks for the reply. I'm not quite sure what you mean by "behalf of others." If I were to get a merchant card processing account that allows me to process cards for fiat in exchange for giving them bitcoin, and I physically wouldn't be taking their card to process the payment. The person would submit payment online from their card and once the payment is approved, they would get the coins.

 

[imfrenchie]

Perhaps you mean white labeling of a provider with a license? With an EU FI for example you can passport with their license into another EU country with your own brand name, website etc and provide services. You just personally need to pass basic AML and the provider you are working with has to offer you use of their license and passporting rights.

Thanks for the reply. Unfortunately I'm looking for USA, not EU.

 

[blizz]

Thanks for the reply. I'm not quite sure what you mean by "behalf of others." If I were to get a merchant card processing account that allows me to process cards for fiat in exchange for giving them bitcoin, and I physically wouldn't be taking their card to process the payment. The person would submit payment online from their card and once the payment is approved, they would get the coins.

There is an enormous risk doing this, but that's a different story! However, most merchant account providers will not allow this activity since it's considered ultra high risk and they would even require a license which is ridiculous.

 

[imfrenchie]

There is an enormous risk doing this, but that's a different story! However, most merchant account providers will not allow this activity since it's considered ultra high risk and they would even require a license which is ridiculous.

Damn! That sucks. Any suggestions on how this would be possible without having to get a transmitter license? Thanks!

 

[blizz]

You need to speak with some of the white label PSP's and MAP's which are around. You can start with Durango (Google them) they have a huge network of providers and may be able to help you if conditions are met.

Do you have any capital to back this up?

 

[imfrenchie]

You need to speak with some of the white label PSP's and MAP's which are around. You can start with Durango (Google them) they have a huge network of providers and may be able to help you if conditions are met.

Do you have any capital to back this up?

Some. But not a whole lot. <$10k. I’ll google Durango and check it out. Appreciate the advice!

 

[imfrenchie]

You need to speak with some of the white label PSP's and MAP's which are around. You can start with Durango (Google them) they have a huge network of providers and may be able to help you if conditions are met.

Do you have any capital to back this up?

Forgot to ask in my previous message, what does PSP and MAP stand for? Cheers!

 

[blizz]

It's a business you want to setup like this right? So 10K will be a start but it is considered nothing in this business. It is considered even less than nothing! So you must be prepared to make a great business plan or you have to be a very good actor to get around this.

Alternatives may be to setup a cover page in the hope you can kick start your business and get sufficient of money out of it until you can setup a real business.

PSP = Payment Service Provider - MAP = Merchant Account Provider

 

[imfrenchie]

It's a business you want to setup like this right? So 10K will be a start but it is considered nothing in this business. It is considered even less than nothing! So you must be prepared to make a great business plan or you have to be a very good actor to get around this.

Alternatives may be to setup a cover page in the hope you can kick start your business and get sufficient of money out of it until you can setup a real business.

PSP = Payment Service Provider - MAP = Merchant Account Provider

What would you say would be a fair amount to get started with?

 

[happyjohn]

You need at least 100K to get started in this business even that is a very low budget. Beside the money there is all the stuff about compliancy and to get approved by the card association which can be tricky and complicated.

 

[imfrenchie]

You need at least 100K to get started in this business even that is a very low budget. Beside the money there is all the stuff about compliancy and to get approved by the card association which can be tricky and complicated.

Damn that’s a lot. Appreciate all help. I guess back to drawing board to see what else can be bootstrapped without needing $100k.

Any suggestion then at least to establish an entity not attached to my name and open a bank account, whether it's a bank account in the traditional sense, or online bank. And one that will allow me to sign up to a cryptocurrency exchange so I can sent fiat from said account to the exchange.