If someone were to sell bitcoins on localbitcoins.com in exchange for paypal my cash cards, which were then deposited into paypal. Is that legal as long as any taxable gains received in the transaction are paid? If the amount is under $500 per day and $4000 per month would there be any requirement to know the customer or comply with anti-money laundering laws?
There really arent any major laws related to it. All that matters is that you have to pay adequate taxes and thats it. There are no other such compliance laws. Moreover localbitcoins.com work because it is legal to sell btc. If it would have been illegal you wont have seen it operating on such a large scale. But yes I still prefer to use some different ways to sell your btc. This method is highly unsafe.