Shapeshift Pulling out of Washington State Due to New Regulations
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Regulation Madness?
I received a message from Shapeshift today saying that they would be withdrawing from the US state of Washington.
According to the message which you can read on their blog here:
"The state’s regulators have taken the position that a new law, “Senate Bill 5031”, should require a license for blockchain service providers operating in the state. Under this interpretation of the law, we would now be required to ask permission from Washington before we buy and sell our own property for our own account."
You can view a PDF of the final 29 page bill here.
It is basically a long list of rules that apply "to money transmitters and currency exchanges". On looking through the information (the parts of it that I understand) suggest a long list of actions that the exchange needs to take.
To me it looks like out of control bureaucracy/red tape with the purpose of making it overly onerous for anyone trying to operate a cryptocurrency exchange.
According to Shapeshift:
"We believe the position that Washington’s regulators have taken is unethical, wasteful, and reckless."
That makes sense - this kind of legislation takes a big toll on the operations of any company, particularly a growing tech company.
Shapeshift did not hold back in taking a sly dig at the possible motivation and reasons behind the new law:
"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."
My Thoughts
It may seem unusual but I think Shapeshift are spot on here.
As blockchains grow and the cryptocurrency ecosystem expands we will likely see more of this kind of thing.
It is sad because it means the innocent consumers in Washington lose out on opportunities to be part of the financial revolution - most likely due to lobbying pressure from the existing financial sector.
One of the best ways to get rid of competition is to lobby for the kind of regulations that make the competitor's business unviable and the financial sector has been very aggressive in this regard.
For the banks and the incumbent financial sector it makes economic sense to wield their power and resources in encouraging this sort of regulation.
They have the power to apply strong pressure on the politicians and buy the right people off.
I would not be surprised if we see more of this sort of thing.
It is a short sighted policy for the state as they are basically excluding themselves from a huge source of future wealth and employment.
Anyway let me know if you are in Washington State and what you think of this situation. Will you be using any workarounds? Are there any exchanges that won't fall foul of this?
Thank you for reading
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I'm a Washingtonian and we're used to this crap. Our state is just a microcosm of the whole US in general. Crypto is a serious threat to those in power and that power is going to try everything it can to stop any type of progress.
The great thing is that they won't be able to.
The old system is coming down and there's not going to be anything they can do about it. They don't get to control our means of storing value anymore.
If they embraced the change and technology they'd come out ahead, instead they do not understand it and are threatened by it and it's going to run them over.
That's the beauty of decentralization and blockchains. Sure regulation and crappy legislation can make it harder to play in crypto but it'll never be able to stop it all together. Especially once numerous user friendly decentralized exchanges and atomic swaps come online.
Welcome to the end of a very very long era of centralized financial control and manipulation. We're all going to have to put up with the death throws of the system and power through the crap, but in the end, we get the last laugh this time!
I don't think Washington is representative of the entire US. It definitely is not alone with it's aggressive stance on cryptos, but there are a few states that are actually friendly to crypto (tho the number is significantly smaller in comparison) and a healthy amount that I think are sitting on the sidelines on the issue and staying neutral for now. I don't think it'll stay that way for too long. I just hope more states take up the same stance that Nevada did.
https://www.coindesk.com/nevada-opens-doors-blockchain-startups/
This is pretty significant. No taxes or fees can be assessed against a company that receives blockchain based currency as compensation by a city or county? Crazy stuff.
I watched the maturation of the internet from it's infancy, and seeing a second disruptive technology (I'd argue moreso than the internet even, though you couldn't have the second without the first) enter the market and begin to stick it to the financial oligarchy we've suffered the last 100 years is definitely refreshing! Amazing time to be alive!
Great comment, it is good to remember that there are some governments trying to embrace the technology. Extremely smart on their part and it's going to pay big dividends.
I feel overall though the federal government and most states are not taking that position, which is why for me our state is like a microcosm of the current majority opinion and approach to cryptos. From my perspective, I just get a real sense of hostility, ignorance and fear from those in power which results in legislation that is nonsensical and a clear push to control and choke rather than embrace and invite.
It is definitely cool to be able to experience yet another truly disruptive technology once again in our lifetime. Fun times indeed :)
Yes I agree.
I'm a Washingtonian as well and hate to see this kind of news. I do agree, they will not be able to stop this revolution, no matter how many laws and regulations they try and pass. I wonder if this affects the Exodus wallet, as they use shapeshift to exchange cryptos.
May it be so!!!
Im in Washington too I really hope this doesn't mess with my Exodus wallet.
However, the amount of laws these criminals are passing proves that crypto is legit!
DONT EVER "GET USED TO THIS". I'm a WAwa resident, too and those asshats are OUR employees. Lets get a petition going. Not only will they get their grubby fingers out of the crypto market, they will open the use of Crypto to purchase marijuana.
The argument that "cryptocurrencies are used by criminals and terrorists" flies in the face of the undeniable fact that criminals and terrorists have LONG used Government (by BEING the governments) to accomplish their agenda before they had any other tools.
I agree with you 100%....humanity is moving into the golden age.
Great post
First the ICOs are banned in US and now exchanges are being banned(read as regulations). I think Chinese will benefit the most from these kind of extreme regulations. Looks like Chinese are doing a better job at regulating cryptocurrencies/ICOs to the right extent, just make sure that they are not stifling the innovation but making sure that innocent people are not being robbed off their money.
Will chinese be the new Super power once the crypocurrencies go mainstream? May be.
It's certainly possible - they already have a headstart in some respects.
China or maybe Russia....
Russia is making some major steps and moving really fast!
While that's true, I just read a story a few days ago about the finance minister or some top beaurocrat in Russia coming out saying that only "qualified" investors should be eligible to trade crypto currencies because it was hard to argue that "cryptocurrencies are not a pyramid scheme" and “For ordinary people, there’s no way because these are very dangerous investments that could lead to loss of money.”
Which I find hysterically ironic when you think about what he's saying.
Ah, good ol' gubment, doing it's best to save us all from ourselves! And helping their friends along the way. At least they're consistent!
Edit (link to the article): https://cointelegraph.com/news/suddenly-russia-plans-to-ban-cryptocurrency-sales-to-ordinary-people
Yea gooberment around the world is excessively goobery....
All the more reason to liberate, educate and take care of ones self!
Wow. There are many problems in USA with the cryptocurrencies
Could be worse, elites in Russia want to straight out ban it. I know one thing for sure, I'm writing my congressman, cos if they regulate it to death in my state which i doubt, I'll move to a state with better laws.
Yes definitely make it clear to him/her that this is unacceptable - the more people that do this the better.
Well hopefully some states will take a more mature approach as we have seen with cannabis.
May it be so∞§∞
Awwww!! This is sad. I still dont get why they will not support blockchain. I guess they are scared of transparency. A time will come where theu will have no other option but to romance the blockchain and decentralization technology.
Well some of them are embracing it. Those that don't will be made obsolete eventually.
Truth revealed decades ago on popular tv show: https://dtube.video/#!/v/ragetester/6xicf9st
Spread the word, save the world!
Feed the government! Or was I looking for a different f word?
well, this is normal.
there are so many places in the world that are embracing the technology.
and there will be logically places that wont.
so move out!
Congrats!!
Yes very true.
Don't worry decentralized exchanges are coming then wash state can't stop you. Government can slow crypto but not stop it
True.
They cannot stop this revolution! They will try though!
The US is rapidly becoming the void where no cryptocurrency innovation and business will take place. The rest of the world on the other hand....
How empires fall....
Yes it is sad.
Sad for the US, but I think some other countries will rejoice at the US shooting itself in the head.
Yes I'm sure some places will use this to their advantage.
I'm not surprised. There's a great deal of suspicion and mistrust of cryptocurrencies, mainly because the government can't regulate them, but they can try to shut down the cryptocurrency exchanges
Exactly. They can put pressure on points of centralisation - like exchanges.
That would probably be the best move. We have already seen the US trying to be the world's police by taking BTC-E offline despite the fact it is a foreign exchange.
It seems like the US would want to keep holding onto this fiat system as they benefit from it the most compared to the rest of the world whereas Russia is now becoming more supportive of blockchain.
It seems like Russia is going to be the first to be prosperous with blockchain technology while the rest of the world will try to catch up when the fiat system starts to deteriorate which we are already seeing with money being pulled out of the stock exchange and the depreciating weakening dollar.
I guess the worst thing is that US consumers are going to suffer as we have already seen BTC-E, Bitfinex and other services stopping the use of USD to buy crypto and prohibiting US users from using their sites.
Let's see how long the US can hold on to their failing system while other countries will start to prosper from the blockchain @thecryptofiend
Exactly and that is always the way it seems when there are powerful interests at work.
The legacy of the Obama administration... They passed so many regulations that it's almost counterproductive to start (or try to maintain) a company here in the US!
Yes but I bet the banks are lobbying heavily to push these sorts of things too.
Yeah..the banks are the looses with blockchain....lol
It will ultimately be their loss when they become redundant.
Banks lobbying to try and stop cryptocurrency @thecryptofiend?
Why does that not surprise me?🙈
#DrainTheSwamp
Lol it is shocking! See how many politicians get cushy jobs working for banks when they leave office.
You can take that to the bank (pun intended)! I hear the Rothschilds have invested in BTC. The rest of the global bankers can't be far behind. My concern is that they'll try to get enough to manipulate prices.
They have the ability to manipulate it in a negative way. Hopefully we are getting closer to the day when it won't be possible for even the richest people.
I'm sure that's their intention. I wanted to do a public post thanking you for your generosity but was reluctant without asking permission... In case you didn't want the publicity.
There is no need - also you are right I like to keep things low key.
Glad I asked... And thanks again. I'm transferring to bittrex a little at a time (not sure how much I trust those wallets!
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