Kraken BTC Exchange: Farewell New York

[Denker]

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

Today Kraken discontinues service to New York residents.

Regrettably, the abominable BitLicense has awakened.  It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.  It’s at least a 40-man, bro.

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

[bryant.coleman]

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. 

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.

[BillyBobZorton]

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

Today Kraken discontinues service to New York residents.

Regrettably, the abominable BitLicense has awakened.  It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.  It’s at least a 40-man, bro.

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

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.

[eerygarden]

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

[Scamalert]

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

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.

[eerygarden]

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

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.

[bryant.coleman]

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.

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.

[unamis76]

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

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 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.

[ashour]

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.

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.

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.

[ajareselde]

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

[bryant.coleman]

Xapo did a great move and relocated to Switzerland since the government actually respects digital data privacy.

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.

[LiteCoinGuy]

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

Today Kraken discontinues service to New York residents.

Regrettably, the abominable BitLicense has awakened.  It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.  It’s at least a 40-man, bro.

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

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.

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.

[Denker]

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.

[dothebeats]

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.

[LiteCoinGuy]

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.

Good old days 

[biggus dickus]

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.

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.

[gentlemand]

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.

[Amph]

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

[randy8777]

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.

[Digit-0]

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

Today Kraken discontinues service to New York residents.

Regrettably, the abominable BitLicense has awakened.  It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.  It’s at least a 40-man, bro.

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

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