San Francisco-based Bitcoin exchange Kraken Refuses to Embrace BitLicense

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San Francisco-based Bitcoin exchange Kraken Refuses to Embrace BitLicense

BitLicense a brainchild of Benjamin Lawsky is facing rejection from stakeholders as a number of Bitcoin companies are not just leaving New York but also criticizing the controversial law openly. The mass exodus of Bitcoin companies is the latest development in the ongoing debate over the BitLicense, New York’s state-specific regulation for Bitcoin businesses.

The latest name to criticize BitLicense is San Francisco-based Bitcoin exchange Kraken. The organization in the blog says:

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.

BitLicense Have Notoriety to Stop Bitcoin Companies Operating

It appears crystal clear that BitLicense though meant to regulate Bitcoin business could have heavy impact on the companies operating. Earlier, the state regulators in New York set 8th August as the submission deadline for business already serving consumers in the third-largest US state by population. However, the responses show only one thing, no company is willing to surrender to the law that can threaten their existence.

Only a few well-capitalized exchanges including New York-based Gemini and itBit as well as Bitstamp have applied for a BitLicense. A large number of smaller businesses including merchant processor GoCoin and altcoin exchange Poloniex, however, recently revealed they would not continue efforts to reach customers in the state.

Ready to Move Out from New York

Kraken on the other hand has come openly to oppose BitLicense as it says that there are several reasons for their decision not to embrace the regulation. For instance, according to them there is no user-support from New York banks, no guarantee of enforcement against unlicensed competitors and reduced customer protection for all New York-based users and traders.

Doing this, Kraken has become the third company to leave New York over the last two weeks, following the lead of Bitcoin exchange BitFinex, boutique Bitcoin exchange Poloniex and Bitcoin peer-to-peer marketplace Paxful. The flight of Bitcoin business from New York could be serious dent for the overall financial technology.

The Bitcoin exchange has explained to the users that it may resume its services in New York in the future if the New York Department of Financial Services decides to reduce the requirements of the BitLicense and reduces the compliance, application and legal costs involved.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com