Legal issues / banking issues selling Bitcoins to people OTC?

Note: This is a US-centric answer. Other countries may differ. I'll add other countries as people leave comments.

There is an arbitrary limit of $1,000 per person per day that triggers the necessity to register as a money service business. Stay under that FinCEN is unlikely to care about you, although you still may legally need to register for smaller transactions.
As long as a single transaction does not exceed $10,000, your financial institution should not file a Suspicious Activity Report.
You are best opening an account at an institution separate from your personal, general use accounts.
Try to keep cash liquid. Buy local, sell local. If you've got enough volume, use money orders to get fiat into your exchange of choice. It'll cut into your profits a little, but it reduces the number of parties privy to your transactions. Do not fraudulently fill out money orders.
Keep solid books that include the fiat price at the time you purchased your bitcoin and the price of sale. This will help you calculate capital gains taxes.
Pay taxes. Assuming you're in the US, this means paying taxes quarterly instead of yearly, unless you expect to owe less than $1,000.
If you do register with FinCEN, please document the process and broadcast here, on BitcoinTalk, and on /r/bitcoin.
Be truthful, upfront, and, most of all, careful. When in doubt, talk to a lawyer.

Colin Dean

Posted 2013-08-07T13:19:05.670

Reputation: 6 559

Are you aware of the workings of other major countries like England etc? – Pacerier – 2013-08-15T14:40:17.517

@Pacerier: I am not, but the basics not involving the government are likely similar. It's safe to assume that every country has some kind of financial crimes watchdog like FinCEN. – Colin Dean – 2013-08-18T19:48:39.613

You should clarify who your answer applies to. It seems very specific to the United States. – zkilnbqi – 2013-11-24T07:35:42.473

Sorry, I perhaps erroneously assumed that FinCEN was more well-known than it is. – Colin Dean – 2013-11-24T15:26:11.057

You should clarify your particular experience/expertise/qualification(s) in the field(s) that you answer applies to. – Willtech – 2018-04-29T03:20:59.210

It's sound like, what a legal limit on selling potatoes. In otc, e.g. irc channel, p2p selling can't be limited anyhow, while you can find person who buys. – None – 2013-08-07T19:01:18.233

Thanks for the feedback I've updated my question title to reflect my concerns – David Silva Smith – 2013-08-10T14:09:06.963

Legal issues / banking issues selling Bitcoins to people OTC?

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