Within the physical world, a bank is often a lender licensed to obtain deposits, transfer funds, and store money for the clients. Banks can legally provide the right to exchange one fiat currency for one more to its customers.

Inside the digital world, a cryptocurrency exchange provides services just like banking on their clients; additionally, exchanges be similar to a currency markets.

What is a cryptocurrency exchange?

A cryptocurrency exchange is a borderline illegal online marketplace where users can exchange one type of digital asset for the next using the market value with the given assets. The challenge with cryptocurrency exchanges is because often facilitate the trade of unregistered securities, are often used to launder money, and have limited, or no, AML/KYC to enable them to evade what the law states.

Cryptocurrency exchanges played an important role from the ICO boom of 2017. Cryptocurrency exchanges were hopeful for new projects without real enterprize model, product, or future to submit so they could list these projects on the exchanges and make vast amounts in transaction fees from these trading pairs. That said, imaginable a cryptocurrency exchange being a bucket shop.

Just what cryptocurrency?

There are several features that distinguish digital currencies from cryptocurrencies.

Cryptocurrencies are coins and tokens without any real purpose-they don’t have utility plus they were made absolutely free over speculative purposes and also to facilitate crime.

Unlike digital currencies, most cryptocurrencies tend not to adhere to law; in fact, some cryptocurrencies were even created to evade the law. Privacy coins are cryptocurrencies specifically designed to facilitate crime by obfuscating the path a transaction has traveled from sender to recipient.

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

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