Large Bitcoin Exchanges Cut Services in New York State after BitLicense Deadline

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by Tatsiana Yablonskaya · 3 min read
Large Bitcoin Exchanges Cut Services in New York State after BitLicense Deadline
Photo: SBA73/Flickr

Leading bitcoin exchanges refuse to comply with BitLicense regulations and make their services unavailable for New York residents.

Today 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. It’s becoming obvious today that not all the firms have managed to meet the deadline. Or didn’t have such plans at all. Let’s clear up the current situation on bitcoin market!

One of the largest bitcoin exchanges in the world, Bitfinex, announced today that it hasn’t and is not going on to apply for BitLicense. According to official 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.

Bitfines 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.”

The opinion of other bitcoin exchanges divided. The second largest exchange, Bitstamp, has chosen to get a license to continue the business.

The list of those who refused includes Kraken, Poloniex and Coinfloor. By the way Kraken has just recently announced its launching in Canada due to partnership with Vogogo so that now its services are available throughout the country.

Coinfloor not only ignored requirement of the NYDFS but in response blocked all US residents.

If now we observe mass refusal to comply with BitLicense, there are still companies that showed their attitude to the offered regulations before. Thus ShapeShift, a well-known digital currency exchange, announced that it was going to stop its service in New York state because of its rejection of BitLicense in the beginning of June. It stated “refusal to register the personal information of all users” as one of the main reasons.”

Bitcoin News, Cryptocurrency news, News
Tatsiana Yablonskaya

Taking strong interest in blockchain, cryptocurrencies, and IoT, Tatsiana Yablonskaya got deep understanding of the emerging techs believing in their potential to drive the future.

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