Just as other exchanges such as Kraken and BitFinex are pulling up roots and leaving New York because of the controversial BitLicense program, New York-based digital currencies exchange Coinsetter has decided to stay and has submitted a BitLicense application to the New York Department of Financial Services.
CEO Jaron Lukasiewicz said that despite reservations, he has decided to bite the bullet.
“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,” Lukasiewicz said. “We have had a couple of customers close their accounts in protest to the BitLicense over the past week, but our company has not historically appealed to the anti-regulation crowd in general. As a long time bitcoiner, I certainly understand this sentiment, but as an exchange owner, my regulatory requirements are clear and not something I will avoid.”
As was reported by Bitcoin Magazine on Tuesday, digital currencies exchange Kraken became the third company to leave New York over the last two weeks, following the lead of BitFinex, boutique bitcoin exchange Poloniex, and bitcoin peer-to-peer marketplaces Paxful, BitQuick, and Local Bitcoins.
Earlier this year, Erik Voorhees, CEO of ShapeShift.io, stopped serving New York clients, calling the BitLicense requirements “Orwellian” and “just like North Korea.” Bitcoin business Xapo moved its corporate headquarters to Zurich.
Unlike the Winklevoss twins’ Gemini exchange, which has applied for a trust charter and is expected to launch soon, Coinsetter is legally allowed to continue operating during the application review process, and New York residents are able to open an account online.
In May, itBit became the first exchange to win a BitLicense when they were granted a trust company charter from the New York Department of Financial Services.
For smaller digital currencies businesses such as Poloniex, the non-refundable $5,000 application fee as well as a long list of necessary qualifications are formidable and make it even harder for smaller startups to compete against the larger exchanges.
Both MIT’s Digital Currency Initiative and the Washington D.C.-based Coin Center have commented that the onerous regulatory burden placed on New York companies will discourage new innovative startups and create an investment “chill” for digital currencies businesses.
Jessie Willms is a planet earth based former government and political researcher and communications officer helping to document the FinTech revolution and its impact on traditional institutions and governments. You can follow Jessie on Twitter at @WILLMS_.