fortune.com / Daniel Roberts / JUNE 11, 2015, 4:38 PM EDT
It’s been barely a week since the BitLicense was released, and it has already driven a bitcoin startup out of New York.
ShapeShift.io, a bitcoin startup that allows people to quickly exchange digital currencies without an account or arduous signup process, has completely cut off service to New York in response to the state’s new regulatory policy for digital currency businesses. The BitLicense, which was finalized last week, sparked fear among the bitcoin community during its revision process over the past year, and now that it is out, has courted criticism for the various licenses and approvals it requires of companies that store and transmit money for customers. It is seen as too stringent and restrictive of innovation.
The BitLicense backlash began last week with official statements and responses from bitcoin startup executives as well as policy pundits. ShapeShift is the first business to promptly ‘get out of dodge’ in response to the policy. (Bitcoin wallet provider Xapo moved its headquarters to Switzerland last month, but stated that it was not out of fear of regulation.)
The company has suspended service to all users in New York State, and is redirecting its homepage for Internet visitors there to PleaseProtectConsumers.org, with a long note about the issue of identity theft and how bitcoin and the blockchain can prevent it.