ShapeShift Leaves New York After New Bitlicense

A few weeks back, we reported that New York had finally released their long awaited Bitlicense, which included 40 pages of rules and regulations that companies wishing to work with Bitcoins in New York had to comply with, besides purchasing a license for a fee of $5,000. 

At the time there was a general positivity regarding the Bitlicense. While many felt that it was far from ideal and that it might benefit the larger companies, it at least gave a clear way of operating legally with Bitcoins in the state.

The positivity also boosted from the fact that the architect behind the Bitlicense, Benjamin Lawsky, Superintendent of the New York Department of Financial Services, is to step down at the end of this month and many hoping that his replacement would losen up the rules.

While this may still happen, the Bitlicense has already driven out its first start-up from the state, as ShapeShift  announced that they will no longer operate in the state due to the new Bitlicense.

ShapeShift is a Bitcoin startup where users can exchange Bitcoins without registering an account, which is impossible to comply with in the rules of the Bitlicense. ShapeShift also felt that the Bitlicense would hold down their technological innovations and that it was better to just leave, rather than wait for a change.

Excluding New York Customers

Following the leave, ShapeShift also excluded all residents from New York from trading inside the platform, to avoid any legal trouble. When users from New York tries to visit ShapeShifts website, they get redirected to a site set up to explain how the Blockchain and Bitcoin can prevent identity theft.

“Bitcoin and blockchain technology have enabled a new standard of financial privacy and consumer protection… Unfortunately, in spite of the technological achievements that now protect consumers, some jurisdictions have legally mandated the continued extraction of sensitive private information.” A section of the states.

“Since New York has mandated unethical and dangerous data collection of users, we have no choice but to suspend service to that territory. We hope other jurisdictions will be less reckless with the private information of their residents. Finally digital commerce can be safe—if only regulators would let it happen.” Erik Veorhees, Chief Executive Officer at ShapeShift said to the press on Wednesday.

Not Affecting The Bitcoin

While this will not have any effect on the Bitcoin as a whole, it shows that the regulations that are being imposed around the globe needs to be better than they are today, to allow the technology to blossom and create something unique that we can use in the future.

ShapeShift will still continue their operations outside of New York, as there are no other states in the US that has currently regulated the Bitcoin or any other cryptocurrency. Hopefully we will see the rules lighten up in New York, allowing smaller companies to continue operating in the state as well as seeing that the tracking of customers doesn’t need to be as extreme as it currently is.

Coinzone Launches Bitcoin Merchant Services In Poland

The road to mainstream adaption of the Bitcoin seems closer than ever, with Bitcoins becoming increasingly popular around the world to own, accept and use. In the US and India, the cryptocurrency is being used a lot as a payment method in start-ups and in Europe there’s many places accepting it to save money in transaction fees.

Also the online gambling industry has embraced the Bitcoin, even the fiat-money industry who are saving tons of money in processing deposits and cash outs and are able to do it so much faster. But despite the good tendency, there’s still a long way to go before we are quite there.

It looks like Poland is the next place to embrace the Bitcoin and its good things, as Coinzone announced today that they have launched their Bitcoin merchant payment services there.

Coinzone provides merchants and businesses with the possibility to accept Bitcoins both in their online and land-based businesses through a simple and cheap integration. Once integrated, the customers will be able to accept Bitcoins in their native tongue and in their native currency, which will be exchanged at the daily exchange rate.

What makes Coinzone ideal for smaller, as well as larger, companies is the fact that there’s no monthly subscription fees or minimum amounts of revenue that has to go through them. This makes it a great tool for companies who are willing to reach out to a new crowd and adapt new technology, while saving money in fees.

“Coinzone’s payment gateway offers multiple advantages for merchants. Quick and easy to use and requiring no special hardware, our solutions offer a simple and secure way to accept Bitcoin with no associated risk,” explained Manuel Heilmann, CEO and Co-Founder of Coinzone.

“We’re excited to be part of such a vibrant Bitcoin market. Businesses in Poland are eager to attract growing numbers of Bitcoin users, and our launch will enable businesses large and small to respond to consumers with a convenient yet secure Bitcoin payment process that delivers an exceptional user experience.”

“Europe represents one of the fastest growing markets for merchants adopting Bitcoin. As the currency becomes increasingly mainstream, it’s changing the way people think about digital money. At Coinzone we’re committed to ensuring businesses across Europe are able to participate in this exciting new payment method – with a dynamic and highly functional solution that’s fully compliant to the local market they operate within,” concluded Heilmann.

If the Bitcoin adaption becomes a success in Poland, both in the online and the land-based industries, then we might see more countries join the wave and more companies be willing to try and accept the Bitcoin.

Overall this is a crucial step in the right direction for the Bitcoin and its quest to become mainstream. Reaching out to new people and companies will only help spread the knowledge of the cryptocurrency and with more understanding how it works, we won’t have to see more articles with “experts” claiming that the Bitcoin is not a currency.

You Can Now Margin Trade Bitcoins At Kraken

The Bitcoin has been gaining a lot of mainstream ground in the past years time, with many big companies embracing the cryptocurrency, as well as Bitcoin ATM’s popping up all over the world in large numbers.

The Bitcoin has always been a commodity that you would have to buy or mine to obtain, which has led to a decent amount of price swings in the past. While regular trading can be good and bad, it can be really good when it’s done by professionals trading large quantities at a time.

With large trading amounts, there’s a bigger need for Bitcoins to actually trade, which again in an ideal scenario will boost the Bitcoin value over time and make it more attractive for the mainstream public once again, as well as more companies.

Up until now there hasn’t been a lot of places where you could margin trade the Bitcoin against a fiat-currency, but there is now. The San Fransisco-based Bitcoin exchange company Kraken announced earlier this week that they have launched Bitcoin margin trading against the Euro.

Kraken is one of the leading Bitcoin exchange sites in the world, having massive volumes of Bitcoin trades done on a daily basis and they are even helping out in the Mt. Gox case.

Margin trading is basically where you place money on the value of the currency going up or down and you then sell your trade when you feel like it has hit the highest it can or when you have lost too much value on it.

It is very much like Forex trading, except from that you will be trading a virtual currency against a fiat-currency instead of a fiat-currency against a fiat-currency. With the swings that the Bitcoin encounters in value, it may just become the go-to currency for forex traders, as it is very good for making money.

To make things more like forex, Kraken has enabled the possibility for users to get leverage. Leverage is basically the option to trade with more money than you actually have, making your profits larger or in the worst case, losing your money faster.

Initially Kraken will offer customers the option to trade with 3x leverage, which means that if you gain 4%, you actually gained 12% and vice versa for losing. Within a short period of time, Kraken will even offer up to 20x leverage for those who wants it, making it possible to make 20x as much more as you otherwise would have done.

Margin trading will not be available to everyone from the start, as they have strict requirements in terms of verification to be able to do margin trading. It is quite simple to get enabled however, as you simply have to send in some personal documents if you wish to trade BTC/EUR on the market.

Kraken will not be charging any additional fees towards any margin trading done in their platform, charging only their standard Bitcoin exchange fee, which averages at around 0.10%. Positions open for more than 24 hours will be subject to an additional 0.05% fee however.

New York’s Bitlicense Rules Officially Released

New York has been looking into regulating the usage of Bitcoins for companies for a long time and while rumours have been circulating in regards to what exactly the Bitlicense rules would include, nothing has been made official – Until today that is.

Because today the official rules for the Bitlicense were released, which means that companies who wants to use the cryptocurrency now have an official guideline with rules to follow if they wish to operate in New York.

What’s interesting about the Bitlicense is that it might be the first step towards complete regulation in the US, with many other states expression interest in the Bitlicense. Ben Lawsky, Head of New York’s Department of Financial Services (DFS) officially released the rules and answered a few of the press’ questions.

The new regulations has a whopping 44 pages of rules, laws and guidelines on how to operate with Bitcoins in New York, which you can read more about here. 

The DFS has regulatory oversight over many companies, including banks and insurance companies. Amongst the companies regulated under them are Goldman Sachs and Barclays, proving that they are serious about the Bitlicense.

All companies who wants to operate in New York and use Bitcoins needs to obtain a Bitlicense, which costs $5,000, a mere cost for most companies. The fee is not refundable and the license can be revoked if a company breaches any of the rules stated in the Bitlicense agreement.

“No person shall, without a license obtained from the superintendent as provided in this part, engage in any virtual currency business activity.” The document states, making it clear that you cannot operate with cryptocurrencies in New York without a license.

But despite the low cost for a Bitlicense, it still won’t be easy for small startup’s and medium sized companies to obtain the license, as the agreement also states that every company needs a compliance officer. The compliance officer will be in charge of ensuring that the company follows all state and federal laws in regards to money transmission and money laundering.

This has led to some concerns from people who believes that the Bitcoin should be usable for all companies, not just the big ones who already makes a ton of money in the fiat-money industry. They fear that the Bitcoin industry will be taken over by the larger corporations and leave the small companies, who can use the Bitcoin the most, out in the dark.

“Getting that balance right is hard, but it is key. We want to promote and support companies that use new, emerging technologies to build better financial companies. We just need to make sure that we put appropriate regulatory guardrails in place,” Lawsky said to the press in a speech he held at the BITS Emerging Payments Forum in Washington DC.

While the regulations seems to not be ideal, it is at least a step in the right direction to boost the Bitcoin usage in the US and make the mainstream consumer more aware of the fiat-money alternative.