At least three digital currency firms have followed ShapeShift’s lead in abandoning operations in New York because of the state’s polarizing BitLicense.
Poloniex, an American cryptocurrency exchange, has left New York because of BitLicense’s restrictions and limitations, reported Bitcoin Magazine. The publication reported that for a relatively small enterprise such as Poloniex, the license’s requirements for digital currency startups to pay a $5,000 non-refundable application fee to operate and maintain their services in New York is a challenging demand to meet.
“There are always pros and cons to regulations like BitLicense, but from a small business perspective, BitLicense is both limiting and frustrating,” said Poloniex founder Tristan D’Agosta to Bitcoin Magazine. “For a small business like ours, a $5,000 non-refundable application fee is a nonstarter. Consider what would happen if every state in the union followed suit – it would cost $250,000 just to apply for licenses in all 50 states.”
Moreover, the current iteration of BitLicense requires digital currency startups and exchanges to satisfy a long list of qualifications before they can be licensed to operate legally. Bitcoin Magazine said that for most small startups and exchanges, it’s quite challenging to meet all the requirements and comply with the set of regulations outlined in BitLicense.
“In the case of BitLicense, once you pay the application fee, you’re then facing a long list of qualifications that would disqualify most small businesses,” said D’Agosta. “As a result, we find ourselves in No Man’s Land, where we very much want to service our New York customers, but we are not big enough to qualify