"Exchanges belong to the old way of thinking. "
Exchanges match buyers and sellers and comply with KYC/AML because they interact with fiat. Thatās how fiat moves into crypto, besides cash to crypto transactions via e.g. Localbitcoins. In Europe there are also escrow markets for bank-transactions, which are capped at circa 500-1000$.
Without fiat there is no USD to peg against. (thought experiment: what about pegging against gold?) As soon as one wants to transmit fiat over the wire one has to comply with fiat rules. Anything that goes anywhere close to āmoney launderingā will be shutdown quickly. Definition of ML depends on the scale (otherwise any cash transaction would be ML). Sending 500$ from peer to peer will not be a problem for regulators. Any wire transfer of more than say 100k$ or 1M$ will raise major red flags. Banks need to report large and suspicious transactions, of course also depending on the jurisdictions they are operating in.
One has to be extremely careful in ones definitions and attitudes. For example Bitshares is very lax in its approach, assuming a private company can issue stocks and money. Ethereum spend ca. 500k$ in legal fees to do a legal crowd-funder out of Switzerland (very complex process involving big law firms). Iāve spoken to several lawyers, regulators, etc. and that expertise is needed to understand what the rules are. On the flip side, if one waits for legal certainty on any new innovation, Bitcoin would not be where it is today. For many things there is not even a legal definition. Switzerland was the first to recognize a concept like crypto-equity a few months ago, via a SRO and interactions with the regulators.
