MonetaGo, one of the US-based Bitcoin exchanges, has announced they will be shutting down for good. The company tweeted that regulation was a key hurdle it could not overcome.
Also read: Bitcoin Not to Blame for National Guard Credit Card Fraud
As most Bitcoin enthusiasts are well aware of, running a financial company in the US requires adhering to specific guidelines. Moreover, every state has the right to issue their own set of additional regulation as they see fit. In New York, there is BitLicense, which makes it expensive and difficult to operate a Bitcoin business in the state.
MonetaGo BitLicense Denied?
MonetaGo applied for their BitLicense at the end of 2015, together with a handful of other companies. Going through this process is subject to a hefty fee, and there is no guarantee enterprises will obtain their license in doing so. Now that the exchange is shutting down permanently, it appears they did not obtain their BitLicense.
Although the details regarding this decision remain rather vague, the company informed its users of the impending closure. MonetaGo sent out an email to all of its customers, stating the following:
We are writing to inform you that MonetaGo will soon be closing our Bitcoin exchange. The date for closure of the exchange is set for one week from today, Friday, 3rd June, 2016.
We thank you for your patronage over the past year. Going forward our team will be focusing on providing blockchain solutions.
Given the fact users only have one full week to access their account seems to confirm the BitLicense not being granted. Companies who apply for this license and fail to obtain it must shut down their services after receiving the verdict. It appears as if that is what MonetaGo is doing. Moreover, a Tweet by the company seems to further validate this train of thought:
“Regulators have good intentions with unintended consequences” #fintech #regulation #compliance https://t.co/7xg7otEnBb
— MonetaGo (@Monetago) May 26, 2016
Is There Anything Positive About BitLicense?
That seems to be a valid question right now. Albeit this regulation has been in effect for nearly a year now, there are very few companies who have obtained their BitLicense. MonetaGo was one of the few companies willing to put the effort in to secure it, and they were seemingly rejected.
In March of 2016, it became apparent only one BitLicense has been granted over an eight-month period. These numbers are not at all promising, and beg the question whether or not regulation is indeed useful. Bitcoin exchanges adhere to traditional AML and KYC guidelines already, and there should be no need for further regulation.
Bitcoin itself cannot be regulated in the first place, as there is no central control or authority. Companies dealing in Bitcoin conduct identity verification checks already, and there is little more they can do. Moreover, blockchain technology allows for all transactions to be traced in real-time, adding a layer of transparency not found in any other form of money.
What are your thoughts on MonetaGo shutting down completely? Let us know in the comments below!
Source: News Tip Via Email
Images courtesy of MonetaGo, Shutterstock, NYDFS