Bitcoin Forum

http://blog.kraken.com/post/126244351097/farewell-new-york (http://blog.kraken.com/post/126244351097/farewell-new-york)


So after Bitfinex, Kraken is the next exchange saying good bye to NY customers due to NEw York states BitLicense.

The New York Department of Financial Services and Benjamin Lawsky will be extremely happy after reading this news. But the most happy bunch will be the bankers. They have banished Bitcoin from one of their strongholds.  ;D

I was told that the just the non-refundable application fee alone amounts to $5,000 per year. In addition to this, there are various other charges. Not a great deal for the exchanges, which don't see that sort of revenue in a whole year.

Everyone and their brother involved in Bitcoin that has a business based on NYC are leaving as we speak. It just makes no sense when you can freely get your ass out of an over regulated hell. The guy that created Xapo has moved as well. Soon no one will be based in NYC and the BitLicense will probably be a thing of the past.

Finex out. Kraken out. Bitstamp are applying for a license though.

Why dont Kraken just get the Bitlicense instead of whining?
I mean a exhange of their size should have a whole army of law specialist to sort out these issues in a short time.

I guess it sets a precedent. Its a hoop to jump through and all that would follow is many many more hoops.

Because it is just not worth it. They will be forced to rise their transaction fees and commissions, and they will not be able to remain competitive. As I had posted earlier, the Bitlicense is not cheap. It costs $5,000 in initial fee + admin fee and taxes.

Kraken is a mostly European-based exchange. Their volumes in the United States are quite low. Trade volumes by Kraken users from the NY amounts to some $8 million per year (according to my estimates). Kraken is getting revenues worth some $40,000 from NY, and possibly a profit margin of around $4,000 (assuming a 10% margin). If they pay $6,000 to $7,000 in Bitlicense, that will put them in a loss.

This was to be expected. Many companies will just probably flee NY to avoid issues. Despite this, BitStamp is apparently applying for a license.


I don't really see this as just whining. As said before, obtaining this license involves high costs that exchange operators are not prepared to face. Not counting the law specialists fees...

It's good that not every company applies for the license. We can't just bend to their will and to their strict regulation. People leaving NY serves a protest.

I agree, there is no point to operate in NY anymore. Service like Kraken or Bitfinex will be "bullied" by regulators to pay higher taxes or give out more  private customer information. Xapo did a great move and relocated to Switzerland since the government actually respects digital data privacy.

I'm not surprised this happened, and overwhelming list of reasons they placed on that blog post clearly shows that there's nothing good to hope for
(for them) in NY. This whole bitlicence nonsence is killing bitcoin bussines there, which seams to have been the point of it from the start.

Doubt it will help, but people should try to make some chance: (from blog post)
"You can write the NYDFS Superintendent here:  http://www.dfs.ny.gov/insurance/nyins_super.htm"
"You can write the NY Governor here:  https://www.governor.ny.gov/contact"

cheers

Switzerland is not 100% immune from the clutches of the American authorities, but they are a tough nut to crack. Previously there were some incidents in which the Americans gained access to user information from a number of the Swiss banks. That that was achieved after a lot of blackmailing (the Americans threatened to ban the Swiss banks operating in the US) and it took a lot of time.

No.

Complying (filing for BitLicense)

    BitStamp (https://mobile.twitter.com/nejc_kodric/status/630309296245489664)
    Coinbase (no recent source, but assuming based on previous comments, e.g. https://blog.coinbase.com/2014/09/10/coinbase-responds-to-new-yorks-recently-proposed/)
    Coinsetter (http://www.coinsetter.com/blog/2014/03/11/coinsetter-apply-new-york-state-bitlicense/)
    DCG - Bitcoin Investment Trust (https://mobile.twitter.com/DCGco/status/629703816687038465)
    MonetaGo (https://mobile.twitter.com/Monetago/status/628612332466405376)

Complying (via trust charter)

    Gemini (https://bitcoinmagazine.com/21342/winklevoss-twins-file-trust-application-nydfs-gemini-bitcoin-exchange/)
    itBit (https://www.itbit.com/blog/questions-from-the-community-itbits-trust-charter)

Leaving (blocking NY residents)

    BitFinex (https://www.bitfinex.com/pages/announcements/?id=51)
    Bitcoinpaygate (https://www.reddit.com/r/Bitcoin/comments/3gcedf/bitlicense_the_rundown/ctwu8uk)
    Circle? (no recent source, but assuming based on previous comments, e.g. http://www.coindesk.com/circle-bitlicense-block-new-york-customers)
    Coinfloor (https://www.reddit.com/r/Bitcoin/comments/3gcedf/bitlicense_the_rundown/ctwwe6s) Blocks all US customers
    Kraken (http://blog.kraken.com/post/126244351097/farewell-new-york)
    Paxful (http://blog.paxful.com/paxful-cannot-service-new-york-state-residents/)
    Poloniex (https://twitter.com/Poloniex/status/627647475638210560)
    ShapeShift (http://www.cnbc.com/2015/06/10/company-leaves-new-york-protesting-bitlicense.html)


Maybe Kraken will join in 1-2 years.

New York's BitLicense to Bitcoin is what England's red flag act was to automobiles.
What NY is doing is self harming behaviour. But when they finally realize it it will be too late.

Sadly, there is not much these exchanges can do but to comply to the authorities or to flee to avoid further complications to their operations. Idk but it seems that the unregulated concept of bitcoin will soon be meeting an end, which I think isn't that acceptable. Oh well, money is money, and as long as there is money, the authorities will always get themselves involved.

http://img2.encyclopedie-incomplete.com/local/cache-vignettes/L500xH363/red_flag_act_1878-4ff5e.jpg

Good old days  :P

The exchanges can move to a new country but how long until those countries start making their own bit licenses? Japan is considering regulating Bitcoin exchanges after the Mt Gox fiasco. If there's money in it for them other countries will follow New York's lead. Any new York based exchange now has to give the government a piece of the pie. Japan would no doubt like a piece of the pie from its own exchanges.

The bitlicence is a good cautionary tale for anyone else thinking of dropping some regulations. It's quite clear that the crypto scene is too small to support something so costly for such a small demographic.

I do think accountability is important when other people are entrusting you with their money. The 'free market' is not going to stop some asshole like Karpeles from ruining lives. There's gotta be a way of implementing it without strangling a nascent scene.

it's not a big loss if you think about it in this way, in a not very distant future bitcoin should aim to get rid of exchange which are actually pointless, people should be encouraged to pay with bitcoin directly and not to dump for shitty fiat

it was a matter of time. if even bitfinex isn't willing to do the extra effort needed, then kraken surely won't. not that big of a deal.

for me thats a good decision, and im pretty sure that others will follow them, well done Kraken.

Why only new York? And how long until the other 49 states implement this?

It's state level and every state decides its own laws. NY is the US capital of finance so it's unsurprising that they'd introduce something first. Others might well be watching to see what happens but they're under no obligation to introduce anything similar.

Isn't that good news? NY is associated with Wall Street, that's the old world. Let BTC thrive everywhere else. This will push the idea that BTC is in a different league than all the big corporations and stock brokers which do business in NY. Besides, everybody I know thinks of NY as a great place to visit but an awful place to live. So long, NY.

There are a lot of countries out there, which are not very hostile to Bitcoins. A few examples are Switzerland, Singapore, Belgium, Brazil, Denmark.etc. There are at least 50 or so nations, where Bitcoin users face no harassment from the government. Even in the United States, there are places where Bitcoin usage is not discouraged.

I don't think so, the main goal of these companies are to generate profit so if they actually made an profits from the NY user base they would have stayed there and requested a bitlicense. But they probably show that NY is time/money wasting and decided to move out.

I for one am glad they didn't apply for a license. It would be a very bad thing if regulations like BitLicense became the standard.

Source: http://www.coindesk.com/ny-bitcoin-business-45-days-bitlicense/ (http://www.coindesk.com/ny-bitcoin-business-45-days-bitlicense/)

High Finance is centered in NY and naturally they are more aggressive about defending fiat money.

After all, the entire planet is at risk. US$ centric fiat money is the perfect vehicle to enslave the planet. Bitcoin to them is just as much of a threat as Adolf Hitler.   ;)

Not the least of which is the team of lawyers for one month just for the application according to bitfinex.
no doubt at least one lawyer on staff together with compliance  people thereafter.

It is not just exchanges that are leaving NY. ArtByte (formerly AppleByte) the digital currency supporting artists around the world has left NY because of the cost and complexity of the BitLicense.


Here is a clip from the announcement:

Due to the requirements of the NY BitLicense, ArtByte has decided to withdraw from the New York market.

So the following services are no longer available to New York residents:


Social media tipping apps
Official pool server
The Orchard (faucet server)
Grants and awards

The ArtByte Foundation is a non-profit corporation dedicated to supporting artists around the world, through the technology of digital currencies. Although we believe regulation is good for the digital currency industry, the complexities and costs of complying with New York's far-reaching regulations far exceed those of any other jurisdiction.

We prefer to allocate our funds to supporting artists around the world. It is a shame that the artists of New York will be unable to participate.

Can't a new coin be created, with completely new protocols, to circumvent this?

They can not regulate any coin. So this is not needed. What they are doing is regulating companies dealing with crypto currencies. And that implies all of them and not only Bitcoin. So it is right of those services to leave NY state if they can not handle the fees or don't agree with that stupid exaggerated KYC/AML. What NY is doing right now is pushing the innovation out of their area and it's citizens have to swallow that bitter pill to just be allowed to use companies like coinbase who will fully comply.

Bad example, various Wall Street companies provided Hitler with money and war materials. And they did the same for the Allied powers too. Hitler wasn't much of a threat to Wall Street when you look at it that way.