The extensive regulations resulting from the recent implementation of the BitLicense has caused BitQuick, world's second largest peer-to-peer bitcoin trading platform, to restrict access to New York-based users.
BitQuick is the latest company to pull its services from New York. GoCoin, Poloniex, BitFinex have already announced the suspension of their services. However, big names in the cryptocurrency ecosystem including New York-based Gemini, itBit and Bitstamp have already sent their applications for a BitLicense. New York users are being redirected to PleaseProtectConsumers.org for better information in this regard.
The BitLicense imposes a hefty fee of $5,000 to all applicants, along with several regulatory standards that would be required to be continually met.
"$5,000 for a new startup is a deep expense. When you're talking about many companies who are in pre-seed stages, they don't even stand a chance to try," said BitQuick.co Founder Jad Mubaslat, "New York isn't a problem now; we'll have to wait for them to come around. But if other states followed suit, there would be a serious chokehold on innovation. Innovators would flee to unrestricted states or territories. Not to mention the state by state regulatory framework in place right now is a mess to begin with."
BitQuick added that the regulation not only discriminates against small start-ups but also puts consumers at risk. Companies will be required to maintain in-depth database of their customers which are prone to frequent hacks these days.
