Most cryptocurrency users are familiar with the ShapeShift exchange service. Although they don’t require registration or verification, they have to adhere to some rules. It now appears the company is leaving Washington State due to regulatory tension. Companies require a license for blockchain service providers. This has forced the hand of this company and some other exchanges to no longer operate in this part of the US. Slowly but surely, the United States is alienating itself from the rest of the cryptocurrency world.
It’s never good to see regulation hinder cryptocurrency growth. While it is understandable regulators want some control over exchange services, they effectively force companies to shut down. Bitcoin and altcoins are not your average traditional assets by any means. They are decentralized without a leader or overarching company. Moreover, any company dealing with cryptocurrencies isn’t necessarily required to identify people using their services. That is, until a new regulatory draft is put in place demanding such measures. That is exactly what happened in Washington state last week.
ShapeShift Departs From Washington State
More specifically, the Senate Bill 5031 is the culprit in all of this. All cryptocurrency exchanges need to obtain a local money transmitter license. It is a bit similar to BitLicense in New York, with a steep price tag and no guarantee of approval. It is evident this requirement is not to the liking of ShapeShift and other companies. Bitstamp, Poloniex, Kraken, and Bitfinex all left this region in recent weeks. Washington state is not cryptocurrency-friendly by any means. Applying traditional rules to a decentralized form of money will never work, that much is evident.
ShapeShift issued the following comment regarding this decision:
“We believe the position that Washington’s regulators have taken is unethical, wasteful, and reckless. We cannot expect the same people, and the same thinking, that designed, built, and promoted the legacy fiat financial system to do what is needed to build a better alternative. Still, as a customer-facing service provider operating in hundreds of jurisdictions, ShapeShift AG takes regulatory compliance seriously. As such, we are terminating service to Washington. Unfortunately, this means that Washingtonians will be required to use less-secure, more-expensive services. As in New York, the future of finance will no longer flourish there.”
It is evident this decision doesn’t sit well with cryptocurrency companies active in the state. ShapeShift recently acquired hardware wallet manufacturer KeepKey. That headquarter will be moved to a different state as well. All jobs created by both companies in Washington are lost, thanks to a few regulators. It is evident these officials need to start thinking twice before making changes that hurt the local economy. Moreover, the state’s legislators clearly want nothing to do with the future of money whatsoever.
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