Bitcoin Exchanges Kraken and Bitfinex Cut Services in New York

UPDATE 9th August 21:00 UTC: An earlier version of this article indicated that Bitstamp, not Bitfinex, had withdrawn services from New York.


kraken bitcoinKraken and Bitfinex, two of the largest bitcoin exchanges by investment funding and daily trading volume, have indicated they will not be applying for licenses to operate in New York.

The development is the latest in the ongoing debate over the BitLicense, New York’s state-specific regulation for bitcoin businesses, which continues to be a lightning rod for criticism from both within the bitcoin community and more widely among mainstream technology advocacy groups. State regulators had previously set 8th August as the submission deadline for business already serving consumers in the third-largest US state by population.

So far, more well-capitalized exchanges including New York-based Gemini and itBit as well as Bitstamp have applied for a BitLicense. Smaller businesses including merchant processor GoCoin and altcoin exchange Poloniex, however, recently revelead they would not continue efforts to reach customers in the state.

Based in San Francisco, Kraken and its executives have long had a contentious relationship with US regulators, withdrawing services from the domestic market in early 2014 and stopping all US dollar services until October. US dollar trading is still not available for US residents.

The exchange wrote:

“While we’re sure that the protection from New York law enforcement is valuable, it comes at a price that exceeds the market opportunity of servicing New York residents. Therefore, we have no option but to withdraw our service from the state.”

In statements to CoinDesk, Powell suggested the move was likely to affect the “several thousand” clients of the exchange. Despite the sometimes political rhetoric, however, Powell implied there were also strong business motivations behind the action.

“The increasing competition in the US did play a role in the calculation,” Powell said. “We don’t see the

Originally appeared at: http://www.coindesk.com/bitcoin-exchanges-kraken-and-bitstamp-cut-services-in-new-york/