Localbitcoin.com, one of the most private ,safe and rapid exchanges and marketplaces, has become the latest company to join various other companies such as Kraken and Bitfinex. This is the new stand that other Bitcoin companies are doing to make a stand against New York creating laws that prohibit the sale of Bitcoin without a virtual currency license (Bitlicense). When users from New York attempt to use Localbitfcoin.com they are shown a one-time message reading:
“As of August 8th the state of New York put regulation 23 NYCRR 200, known as the Bitlicense, into full effect making it a federal offense to sell virtual currency to New York residents or businesses without a license”
They also posted on their blog “This new regulation would require anyone selling Bitcoins through our service to acquire the BitLicense if they sell Bitcoins to residents of New York. As the Bitlicense is time consuming, expensive and difficult to obtain for anything but large companies we’ve taken the decision to protect our US based traders and not allow New York based users to use our service.
This new stand has pressured other small businesses as they could not afford to comply with the new regulations designed for large companies. The Bitlicense has received a lot of negative media attention due to the number of companies that cannot comply due to the $5000 fee which does not include additional costs.However other companies such as kraken do not accept the regulations due to reasons such not providing protection from unlicensed exchanges nor does it guarantee they will receive banking services.
One their blog they also commented “This is an unfortunate state of affairs and we hope that the regulation will in the future accommodate small time bitcoin sellers who do not have the possibility to comply with regulations made for big financial institutions.”
Hopefully New York will heed the warning these companies are providing and allow cryptocurrencies freedom again. However the few companies that will remain with their licenses will have plenty of customers and little competition in their way.