That's what keeps exchanges from thriving, I guess. Buying and selling stuff with bitcoins is, at most, tax fraud *if* it does not get reported to the IRS. Same as buying and selling using US$ for what that's worth.

But exchanging money in an untraceable way for bitcoins, and then back, is kind of a big bright shiny red arrow pointing at the exchange service. I, myself, believe there's no such thing as "money laundering", only money that taxes weren't collected upon, but that's not the point.

What can I, if opening a small exchange, do to prevent being mistaken for a money launderer and still keep the anonymous part of the deal? I mean, tax-wise, I'm more than happy to report as profit all the local currency profit I make, and even report on the size of my bitcoin stash (though as a non regulated commodity, there's no way to accurately correlate their value to local currency). But how can I keep away from liability, if the service I charge for is used for doing unlawful stuff and I don't report on the color of underwear of everyone trading on my exchange?

Sorry for stealing the thread, feel free to tell me off

Yep.  That's why exchanges should register as Money Service Businesses (MSB), if they are making money.  They also need to adopt anti-money laundering (AML) protections.  Unsurprisingly, AML protection means not permitting huge sums of untraceable money to pass through your exchange without some sort of identification of the user.

Non-profit exchanges are on a little bit better ground, legally.  But they still need to adopt AML protections, if they want to avoid running afoul of the law.  (or move offshore)

Nevis seems popular these days (MyBitcoin uses it, I notice).

But even offshore, for United States citizens, means reporting to the IRS

• ownership interest in a foreign entity
• transactions between the United States and a foreign country

and possibly all bookkeeping of the foreign entity to the IRS.

This does seem to indicate that United States citizens could legally operate offshore, outside the jurisdiction of the Banking Secrecy Act, PATRIOT Act, etc. with regards to banking and currency exchange, as long as the transactions are reported to the IRS for taxing.

However, I Am Not A Lawyer and This Is Not Legal Advice.  ;-)

Nah, this is offshore: http://seasteading.org/

Well even if you go offshore you will still have to apply to the jurisdictions local financial regulators,
for licensing, as money exchange, transfer service, payment processing requires licensing from such authorities before any business is carried out.