The BitLicense fiasco doesn’t seem to end as the exodus of bitcoin businesses from New York State continues. Local Bitcoins and BitQuick have become the latest companies to get out of New York State.
The world’s largest peer to peer bitcoin market place has decided to pull out of New York State as it is impractical to apply BitLicense to the company’s business model. Being a peer-to-peer marketplace, if the company has to adhere to BitLicense, every individual seller on the platform will have to shell out $5000. The company announced its decision and the rationale behind it in one of its blog posts. The post clearly explains that New York’s legislation numbered 23 NYCRR 200 better known as BitLicense which makes selling bitcoin in the state without applying for the license a federal offence. So, anyone selling bitcoin using Local Bitcoins’ service without a license will be committing an offence.
BitQuick on the other hand decided not to serve the New York market as it considers BitLicense to be unfair towards the bitcoin community and digital currency businesses. BitQuick has joined the ranks of ShapeShift and GoCoin by joining their campaign to educate the general public about the way government is interfering with bitcoin, their privacy and security. Being part of the Please Protect Customers campaign, the company has publicly voiced its concerns about various aspects of BitLicense regulations.
The costs involved in registering for BitLicense and meeting compliance requirements are humongous and it is virtually impossible for many bitcoin startups to foot the bill. The CEO of BitQuick — Jad Mubaslat also voice similar concerns while mentioning that if all states in the United States come up with regulations similar to BitLicense then the companies would have to spend over $250,000 just to apply for the license in each state.
We have been seeing a lot of companies leaving the state and they continue to do so. We have to wait for a while before we can come up with a final count of the number of companies that left New York State.