Coinsetter, the bitcoin exchange for active traders headquartered in New York City, today announced that the company has submitted an application for the BitLicense with the New York Department of Financial Services (NYDFS). Coinsetter is now authorized to legally service New York customers during the application review process, and New York residents are welcome to open an account at the official website.
This action highlights Coinsetter’s commitment to providing sustainable coverage to New York customers. Coinsetter CEO Jaron Lukasiewicz said, “While we serve a global user base of bitcoin traders, New York has long been Coinsetter’s home. We are happy to announce that Coinsetter will continue to be headquartered in New York City, a global capital of banking and financial technology, and to serve customers throughout New York State.”
“While sometimes a controversial topic in our industry, regulatory licensing is a requirement for bitcoin exchanges in some states. Fulfilling our licensing requirements plays an important role in providing sustainable service to customers over the long term. Some exchanges have decided to discontinue operations in New York. We will take a more difficult path in order to make sure New York residents continue to have a high quality bitcoin exchange available to them,” he added.
Monday, August 10, was the deadline that New York Department of Financial Services imposed for all bitcoin exchanges to apply for a license known in bitcoin world as BitLicense. Regulations were released on June 24, 2015 and the activity of companies dealing with cryptocurrencies should have been licensed by August 10, 2015.
One of the largest bitcoin exchanges in the world, Bitfinex, announced that it hasn’t and is not going on to apply for BitLicense. According to company’s statement “they have chosen not to apply for a license at all.”
Bitfinex now starts to cut off bitcoin services for all New York state residents who have to withdraw their cryptocurrency holdings from its accounts by August 15, 2015. The company apologizes for such inconvenience but strongly recommends not to put off this compulsory measure; otherwise funds will get exchanged to US dollars at market rates. Management of the company calms customers down saying that their access to USD balance will be unrestricted. From now New Yorkers will not be able to make any bitcoin transactions within Biftinex account except lending US dollars to other users.
Bitfinex explains their policy: “There are many factors to our decision, however we hold our users’ privacy in very high regard, and seeing how we are an international exchange with a high percentage of users coming from outside of NY, adhering to the BitLicense would put these users’ privacy at risk and it would compromise the privacy of our employees (having to send finger prints to the NYDFS). There is a slew of other reasons behind our decision like how much time it takes to go through the application as well as changing our system to comply with their regulations. In sum, we didn’t view it as worth our time or the best for our users’ interests.”
CoinSpeaker asked Coinsetter’s CEO Jaron Lukasiewicz: “How difficult is it to get a BitLicense and why other companies don’t do this?”
He answered: “Unless you have spent a lot of time (and money) working to understand it, the BitLicense is a complicated endeavor. There are many reasons why companies have chosen not to apply, including high costs, regulatory requirements and uncertainty of approval. That’s a high hurdle for many companies, but it is necessary for companies that are committed to operating in the state.”