Following the passing of Senate Bill 5031, new regulations for digital currency exchanges are now effective in the state of Washington, CoinDesk reported.

Introduced this January, the bill is sponsored by Senators Jan Angel and Mark Mullet. It was sent to Governor Jay Inslee for approval in April and was signed within a couple of days. According to the details on Legiscan.com, the regulations went into effect on July 23, 2017.

“"Money transmission" means receiving money or its equivalent value (equivalent value includes virtual currency) to transmit, deliver, or instruct to be delivered to another location, inside or outside the United States, by any means including but not limited to by wire, facsimile, or electronic transfer”, the bill states.

Digital currency business would now be required to maintain reserves in relevant digital currency and equivalent to the funds they hold on the behalf of their customers:

“A licensee transmitting virtual currencies must hold like-kind virtual currencies of the same volume as that held by the licensee but which is obligated to consumers in lieu of the permissible investments…”

Citing these regulatory changes, a number of cryptocurrency exchanges have already backed out from the state – Bitstamp discontinued its services in the Washington state in December 2016, followed by Poloniex and Bitfinex. However, Gemini obtained approval to serve customers in the Washington state last month.

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