Icelandic exchange for Auroracoin

[Skarfurinn]

We are making an exchange that will have aur ~ isk trading pair.

We do not have a launch date yet but when the time comes it will be hosted on the isx.is domain.

[Bimmerhead]

Any updates on the progress of the exchange?

Until the exchange is ready to open, you might want to populate isx.is with a landing page where people can sign up to get notifications.

(ex. https://wordpress.org/support/topic/plu ... -mailchimp)

[Skarfurinn]

We have had some delays with the exchange but I will be able to give an more exact date soon.

I intend to set up this kind of landing page for the exchange soon.

[Skarfurinn]

We finally have a good speed on this development and we should be up and running for the initial closed beta test in about 40 days, hopefully sooner.

I will keep you guys updated.

[BioMike]

How is this project going? Have you thought about possible financial regulation in iceland?

[Skarfurinn]

This is actually going quite well. I expect to be able to start closed beta in 2 weeks time.

Yes we have considered all the financial regulations. We started there before anything else. The thing is that cryptocurrency is not considered to be a currency but a property so the exchange does not fall under any laws for your typical currency trading.

We have sent official letters to the central bank, the financial administration and the tax office to ask if they have any regulation or limitation that would apply to us and all responses directed to one announcement that the central bank did related to crypto currency. That is that you are not allowed to get an exception from our currency controls and get foreign currency to buy cryptocurrency.

We both sent a letter to the central bank and I called them as well to ask if there were any restrictions for a person to own cryptocurrency (lets say gotten from mining or in direct trading) or for them to buy or sell cryptocurrency for Icelandic Króna and in both cases they said that no regulation or law restricted that.

We have also made sure that the bank knows what we are doing and we have been working on a detailed disclaimer for the exchange, where for example the users are actually buying credit on our exchange which they can sell back to us at any time for the equal value. This means that we are not actually storing money for anyone but just buying and selling a product in the form of credit.

[Bimmerhead]

Will your exchange also be selling bitcoin and other altcoins, or just Auroracoin?

[Skarfurinn]

It will sell Bitcoin as well but for the first months we will only sell Auroracoin.

[BioMike]

We have also made sure that the bank knows what we are doing and we have been working on a detailed disclaimer for the exchange, where for example the users are actually buying credit on our exchange which they can sell back to us at any time for the equal value. This means that we are not actually storing money for anyone but just buying and selling a product in the form of credit.

I don't get that. If you call the credit "krone" and one of those has the value of 1 krone... how would that be different? Just a different name?

An other thing that surprises me is that there are no money laundering regulations? Your exchange could be used for that, none of the authorities mentioned that?

Would it be possible to trade on your exchange, even if you never withdraw any krones? (For people from abroad, to just do trading)

[Skarfurinn]

Well if you want to store other peoples money you fall under a category of regulations and complicate things a lot. If you sell people credit you are not storing their money.

Our exchange is only for people with Icelandic social ID. After you register on the exchange you need to authenticate yourself through Íslykill which is the same identification service that people used to identify them self for the airdrop claim. So anyone who does any kind of trading on our exchange is known.

Then if a user wants to deposit ISK into our exchange they deposit to our bank account and it will automatically be credited to their user account in a few minutes. The thing is that the user has to deposit from their own account with the same social ID as was registered on the exchange. We have will fetch deposit information from the bank through their B2B service every few minutes and we match the depositors social ID with the registered social ID's in our database and if we find a match we credit the amount to that user.

Then if a user wants to withdraw from our exchange he will be given fields to input his bank account information and it has to be a bank account that belongs to that users social ID, else the user will get an error message during his request as we will query the bank during the users request to see if the account provided belongs to the authenticated user in our system.

So all KYC is actually handled by the bank as everything go through them eventually. So as a tool for money laundering this would be a poor tool IMO, we have given a lot of thought on this. We will do our best to keep all the users information secure and we will not give any information to a third party. The only exception to this would be to comply with the local authorities.

I hope this answers your questions. If you have some more questions, I'll be happy to answer them.

[Dinobotta]

I don't get that. If you call the credit "krone" and one of those has the value of 1 krone... how would that be different? Just a different name?

The credit thing is a technical. The bank that will handle the exchanges bank account does not want customers to have a direct claim on the bank account, only the company that owns the exchange has a direct claim to the bank deposits. This is the reason that when someone deposit into the exchange they are buying credit on the exchange called ISK for Icelandic kr. Then when you want to withdraw your exchange credit (ISK), the customers are acutally selling the exchange credit (ISK) for Icelandic kr.

An other thing that surprises me is that there are no money laundering regulations? Your exchange could be used for that, none of the authorities mentioned that?

The exchange will comply fully with all money laundering regulations. The only way to deposit into the exchange is via a local bank where the costumers credentials are checked against a government social ID system that verifies them. When customers wants to withdraw ISK it can only go into a local bank account with a matching social ID. So the origin of all ISK that will go into and out of the exchange will be checked by the local banking system.

The exchange will also comply with the Financial Authorities, the police or the Central bank if they want information on individual customers, if they are investigating money laundering.

Would it be possible to trade on your exchange, even if you never withdraw any krones? (For people from abroad, to just do trading)

To begin with the exchange will limit customers to customers with a Icelandic social ID and a Icelandic bank account. You can be a foreign resident and get a Icelandic bank account and a social ID. If you send USD via swift, sell it for ISK and deposit it into the exchange you can.

Perhaps we will consider opening the exchange up for anyone to trade AUR/ISK but limit withdraws in ISK to customers with Icelandic social ID and an Icelandic bank account.

[Dinobotta]

Speculation on how market mechanics will change when the new exchange will open:

To start with the new exchange will only trade AUR/ISK. The exchange will be closed to foreigners, because of the currency controls. So there will only be supply and demand from Icelanders on the exchange. This will limit the supply of AUR to only the people who got some from the airdrop and are holding AUR, i.e. the miners will have to sell AUR on Cryptsy (or other exchanges) unless they want ISK and have Icelandic bank accounts. (I'm assuming most of the miners are not Icelanders at this point in time)

I think this setup will create a different market than other exchanges offer, where we separate Icelanders from the foreigners. My hopes are that this will remove downward price pressure from miners on the new exchange to begin with and perhaps limit incentive to sell AUR for BTC and BTC for USD. In other words there might be a buyers market on the new exchange and a sellers market on Cryptsy (or other exchanges).

I can be totally wrong, perhaps Icelanders who got AUR from the airdrop just want to sell them for ISK in one transaction, not going through BTC->USD and perhaps ending up with selling USD for ISK. And perhaps foreign buying interest will increase more when the crypto community realizes that the AUR experiment is taking off in the Icelandic economy.

This market separation can also create two prices for AUR/ISK. The price on the new exchange and another via AUR/BTC/USD/ISK trade through other exchanges. There will be a one way bridge from the new exchange to other exchanges via AUR deposits, and limited only to Icelanders. I‘m speculating what effects this will bring to AUR/ISK price on the new exchange vs. trading the AUR/BTC/USD/ISK crosses.

If this happens, "two prices for AUR/ISK" how do you think it will play out.

Any thoughts on this topic?

[sorin]

There is a recent precedent in Venezuela, for multiple exchange rates.

This are a good reads that explains the trouble with different exchange rates:
http://www.bloomberg.com/news/articles/ ... ange-rates
http://www.investopedia.com/articles/03/022603.asp
The answer is simple: "two prices" for a currency are always bad.

[BioMike]

Thank you for the replies. This makes things much clearer for me.

[ukaurora]

any updates about the exchange ?

[Dinobotta]

We had a bit of a setback about two months ago. Our developer had to much on his plate and quit. I think Skarfurinn has found one or two developers for the project and will be recruiting in the coming two weeks.

[Skarfurinn]

The exchange is now near completion and we expect to start beta testing in the next week or two.

Any Icelander who is interested in participating in the beta test can go to isx.is and register.

[Soltantgris]

Excellent ! Just too bad i can't test it.

[Skarfurinn]

Well the ISX exchange development is going well and we will start the beta test in a few days.

I thought I would post a few screenshots for anyone interested in the exchange.

This is the users account overview page. Here the user can see his funds in Aur and ISK, how much is frozen in orders, how much is waiting for withdrawal and other exchange related info.

This is the deposit page. Here on the left side the user can see his default Auroracoin address that was generated when he created the account, both in text form and QR code. The user can create as many addresses as he likes but with the limitation of 1 every 24 hours and is able to access his address book from here as well. On the right side he can see the exchange's bank information and information on how to deposit ISK to the exchange. The process is quite easy for the user as he only needs to transfer the ISK to the provided bank account and the funds will be added to his account within 5 minutes from his transfer. We query the bank account through the banks API and when there are some new transfers into the account the exchange will match the social ID of the depositor with his social ID on the exchange. We are able to do this as all users will need to authenticate themselves through island.is when they create their account and through that process we are provided with their social ID.

Then we have the orderbook. The chart is a bit funky here but that's just because the orderbook wasn't populated when I took this screenshot.

The buy and sell page. This is the simple view where users can just input the amount of AUR they intend to buy or sell and press the submit button. That will create a market order and they will buy or sell the amount they specified on the market price. The page is set like this by default so that non-experienced users that can do a simple transaction without having to think about advanced trading. Users that don't just want to buy at a market price and want some more trade features can check in the advanced features box to get the extra options. You can see those on the next picture.

Here is the buy and sell page with the advanced trade features turned on. As soon as those features are turned on the default type of order will be set to limit order instead of market order so the user can now start to specify the price he like to set for his order. On top of that the user will have the option to create stop orders as well.

On this page the user can see all his open orders and from here he can edit or delete those orders.

This is the trade overview page where the user can track all the trades he has made.

And finally the withdrawals page. Here the user can withdraw both his AUR and his ISK. The Auroracoin withdrawals are as simple as specifying a Auroracoin address and the amount to withdraw and of course he has to verify the withdrawal by either email or 2fa with Google authenticator or both. To withdraw ISK the user only needs to specify his bank account and amount to withdraw. If he has not specified a bank account he will need to do that first. The user can store multiple bank accounts to withdraw to but all of them must be registered to the same social ID that he registered when creating his exchange account. Withdrawals will be paid out two times a day on business days between 8-10:00 in the morning and 19-21:00 in the evenings.

[Soltantgris]

Just to bad I can't register and use. This is instantly the exchange I trust the most, by an insanely large margin.

Good job guys - I know the road has been long - the waiting was worth it !