It was only a matter of time until the BitLicense regulation started claiming more victims in the Bitcoin mining industry. Not only are individual miners under the scrutiny of becoming money transmitters, but mining pools and even cloud mining providers could be affected as well. Genesis Mining, one of the very few legitimate cloud mining companies, will no longer accept customers from the New York state area.
All But Destroying Bitcoin Growth In NY State
Applying for a BitLicense is a long, tedious, invasive and costly matter, and most Bitcoin companies are taking a stance in terms of forcing regulators to tone down the requirements sooner rather than later. While that process may take months, or even years, to have an effect, the exodus of Bitcoin companies in the New York state area is growing longer every day.
Even Bitcoin, cloud mining services, are not being spared, as they would also be forced to apply for a BitLicense because of their “money transmitter activities”. The generation and distribution of Bitcoin for monetary gain is labelled as money transmissions under this new regulatory framework and forces all mining companies and pools to apply for BitLicense.
Even though the financial cost is quite steep, the biggest issue comes in the form of customer privacy invasion by state officials. All Bitcoin companies complying with BitLicense are forced to collect and turn over all customer data to state officials for undisclosed reasons. It goes without saying that the Bitcoin community is not too happy with this “ludicrous” decision.
Regardless of how you want to look at BitLicense, the current version is hampering Bitcoin’s growth and adoption in the state of New York. In fact, Bitcoin companies have to jump through even more hoops than regular financial companies, which is not helping matters either. Bitcoin startups struggle to make ends meet as it is, let alone comply with these hastily drafted guidelines.
Exit Genesis Mining Due To Regulatory Reasons
Genesis Mining, one of the very few legitimate Bitcoin cloud mining companies in existence today, has decided to pack up their business and no longer deal with customers residing in the state of New York. Despite Genesis Mining being more than happy to comply and serve customers from all over the world, sometimes life throws a curveball you simply can’t deal with in a regular fashion.
“Genesis Mining will not be able to comply with the regulations set forth by the proposed BitLicense and as such, we will no longer be able to accept customers from the state of New York. All current customers will be able to continue their services, but going forward, no one with an IP address from the state of New York will be able to use our services.”
Free market innovation is a scary thought for policymakers holding a seat of power today. As a result, the BitLicense regulation was drafted and created an unnecessary obstacle that will all but kill technological innovation in the area. According to the Genesis Mining statement, the company firmly believes this is the exact intention of BitLicense: stifling Bitcoin growth in New York.
Source: Genesis Mining Blog
Images courtesy of NYDFS, Genesis Mining,Shutterstock