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I'm a software developer, and I want to make a website that allows users to sell bitcoin instantly for paypal cash without the hassle of an exchange - I don't even want to make a profit from it. The idea of it is to be a 100% fair exchange, instant, and no account/signup needed to encourage more people to use bitcoin.
Regardless, I was thinking last night and wondered if money laundering here is a concern? For example, a user stole bitcoins and sold it with my exchange. Is it the sellers responsibility to ensure funds are clean (since we are dealing with fiat cash)? What if someone buys bitcoin with dirty money and tries to sell the bitcoin on my exchange for clean the money? Would the seller be in trouble even though there is know way to know funds are legit? I am in the US.
3Anybody who accepts a reversible payment (paypal, credit cards, even bank deposits to some extent) for an irreversible one will quickly find themselves defrauded on a massive scale. The rest of these questions are for a lawyer. – Anonymous – 2017-11-08T02:54:07.047
Please research the answers on this site like How can I buy Bitcoin via a Credit Card or Paypal? and these.
– Jonathan Cross – 2017-11-08T03:11:22.6902@eponymous I'm talking about selling though- How can a seller defraud a user? Only I can do a charge back. Of coarse, allowing users to buy bitcoin with paypal would be too risky. – linux932 – 2017-11-08T03:11:55.773
@xFlare I misunderstood the question slightly, it's mostly a risk for the person receiving potentially stolen funds from paypal from you. PayPal chargebacks in particular can be extremely long reaching, there's not a solid way for customers to protect themselves against that. – Anonymous – 2017-11-08T03:56:02.150
@eponymous The opposite case is true because the OP is allowing people to sell their Bitcoin and is the one paying them with Paypal. – Willtech – 2018-05-09T09:31:34.083