Shapeshift Pulling out of Washington State Due to New Regulations

in bitcoin •  2 years ago 


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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.

Screenshot 2017-08-30 17.52.21.png

The Shapeshift Notification.

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 :)

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!

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!

  ·  2 years ago (edited)

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

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.

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!

@thecryptofiend, @adr1an0, @arckrai, and all: We are there already! See https://vivaco.in/ for an introduction, and https://blog.vivaco.in/, which give much information about the project.

VIVA is an economic engine to spread the wealth equally, provide a sustainable-living level of retirement, and to decentralize power on an ultraledger fabric block-chain grid. VIVA is working diligently to be compliant with laws so as to be able to provide services and work from the inside to change the laws. (a simple battle strategy: infiltrate, divide, and conquer.)

VIVA, TradeQwik, Galaxy Vault, and VIVA.cash will all work hand-in-hand to bring radical change to the financial sector. Although VIVA and TradeQwik are successfully running (in beta), Galaxy Vault and VIVA.cash are slated to come on-line in the next few months. When they do, this will be HUGE! Digital and fiat currencies will work together rather than against each other.

Other facets, including blockchain voting, educational programs, social media platform (which pays fairly), and more are also in the works.

VIVA is up and running, and is already successful and sustainable!

Anyone is free to contact me, [email protected], with questions about VIVA, or if anyone wants to participate, I can help determine what is the best path for you to start.

I'm not sure how VIVA will get around these issues more than any other currency. Anyway I think these problems will be overcome with time.

VIVA is not just another crypto-coin. It is a three-tiered stable digital economy, built upon a scalable, ultraledger blockchain. It's stability was proven during this recent Bitcoin "crash." VIVA held it's value and actually gained a bit.

Check it out https://vivaco.in - and - https://blog.vivaco.in

If you find you have questions, I'll be happy to answer or find someone who can.

Sucks there pulling out of that state. It should be allowed anywhere. I dont understand it..

Yes but I think they may change their minds if they start seeing other states raking in money and jobs due to the crypto boom.

That's sad!! The government can try to stop the blockchain and crypto currencies, but it is the way of the future! The regulators should jump on board the train before they become obsolete...

Exactly.

Well this is a bunch of bullshit. Fuck this state. Looks like I am out of the crypto space now. Guess Ill put a couple things on paper wallets and call it over. I already didnt get the news on time and had my funds on poloniex taken when my account was shut down when they didnt feel like buying the license. The thing is they made bitcoin a legal currency here so they can tax it. I am sure this will happen in every state eventually. no doubt about it.

I would wait and see what happens. Maybe they change it to make it easier to follow.

All these businesses are left with the choice to buy a license to sell transfer funds using btc and they decline because really washington state is a small fraction of their earnings. I realized months ago when I found out about the bill that they could make bitcoin legal in every state and it would force these companies to go under because the only institutions that would be able to afford a license in all 50 states would be the big banks. The same thing happened with marijuana in this state. legalization is not decriminalization.

Interesting. That is kind of what I was thinking it kills the small player because they don't have the resources to deal with all the regulations leaving on the incumbents i.e. banks.

Exactly people in the space fail to acknowledge this fact. It will always take money to make money and if you dont have it you cant. The people that do will.

  ·  2 years ago (edited)

The United States is becoming hostile to blockchain innovation and will regret it because most of these companies will move to other continent. Tell them to contact me if they want to move to Germany or any other European country.

Yes indeed I think that is why places like Switzerland are becoming hubs.

You are correct, many American firms are moving out and if they dont do anything about it then the government will lose a lot of tax money and brains too (due to their greed and control frick attitude)

As a Washingtonian i have to say that so typical of this state. It is a sad but honest evaluation to say that they tend to chase out many forms of business due to restrictions they put on them. This state has much natural splendor and beauty but it is over shadowed by massive regulations and a very biased system that is influenced by a handful of long time contributors / business and legislators that are in desperate need of removal. I am not surprised by this in any way. This state is a tax hungry regulatory nightmare.

Thing is it would bring in more tax for them in the long term if they embraced these things.

Yes I totally agree but some of these legislators and many others in this states government are so intrenched and blinded by their routine of patting each other on the back and the lack of change has and is costing them as well as the residents of their state it is sad. instead of promoting new industry they just keep taxing the people.

Yes true.

  ·  2 years ago (edited)

Nevada is the safest place for crypto. They have already passed a "hands off" law regarding it. https://news.bitcoin.com/nevada-senate-opts-to-prohibit-tax-and-regulations-on-blockchain-technology/
Maybe Reno will be the new tech hub along with the Gigafactory? SF is close, but too expensive to live in.

Interesting - I suppose their gambling experience will also put them in a good place for making the most of this.

Politicians respond to their constituencies, by which I mean their donors. And so while the Washington legislature might be putting up roadblocks for blockchain-based businesses, I don't see this as an attempt to completely block it out so much as I see them looking to create new "revenue streams" for the state (notice the quotes) and setting up the system to favor incumbents. Banks are exploring blockchain tech, and the licensing won't be a big issue for them. The licensing is a barrier to entry to benefit incumbents, such as institutions like the banks, and so while blockchain tech is seen as a liberating force for the crypto-community, the powerful want to make sure they can leverage it to maintain control because they can't afford the disruption this tech will cause.

Yes I think you may be right.

So in Washington you are able to purchase weed in about every town with a greater population of 20k people. But you are unable to purchase Crypto and make investments how you see fit for your own financial future. Something doesn't add up. Maybe its because the State gets their cut of taxes on weed? Why not just push tax regulations on Crypto gains instead of banning it all together. Hopefully this will change as they start to realize that Crypto isn't going away.

Yes it is weirdly inconsistent - maybe the reason for the regulations is to build a foundation for taxation and they didn't take into account how onerous they would be.

Crypto in my opinion is unstoppable , they may seem temporary but looking at long term , crypto will take over

I think so.

those that want to keep their crypto better start thinking about how to go Galt on their digital assets

to start with, you'll need to build a fully off-the-books digital identity which never touches real you as far as IP's, handles, locales, specific devices, etc

I fear you are right. There may be an alternative in moving to states that are more forward thinking but that is a drastic measure and who knows if they will change their mind in the future.

a little TAILS goes a long way; keeping assets [EDIT: split amongst different wallets] and transactions small goes a long way.

My understanding is that transactions under 1 BTC are very hard to track

Keeping the points of origination and cashout anonymous will go a long way, too

Interesting. I need to read into this more.

Oh my god .

Are you in Washington?

No

They sure do blow a lot of hot air don't they....Almost like a scared dog backed into a corner here.......first they tell us NOT to invest in crypto because it isn't worth anything, then they show their teeth when they realize they are wrong. It's a threat to a failing system.

On the same note, how can crypto fall within any laws and guidelines when it isn't the same as the fiat currency they are talking about......????? Oh but, they can bend the rules to make them fit....that's right. LOL

government having problem lol they just can't control it like that

Right.

The US banks are threatened by the blockchain, until they can use it for their own benefit!

Yes I think so.

Oh god....What else is new.....
It is sad that the technologies, people and organizations that could help humanity the most IE blockchain, crypto, cannabis, free energy etc are shut down, regulated, killed, etc......

Dun Dun Dun DUN

Thanks for the post and also wanted to say thanks for the high quality content you re steem. Every time I come to ur profile to check YOUR posts I always find atlas one other post I want to read that you re steemed.

I am very grateful for your contributions here!

SteemON!

Thanks mate. Yes it is sad. In some part it is fear of losing the current control, in others it is likely financially motivated. I don't think this kind of thing can stop the blockchain revolution though.

May it be so∞§∞

Making it unavailable in Washington state seems like a desperate and extremely ineffective way at trying to slow down the crypto train which has no intentions of stopping.

Exactly.

Hey, Loved your post and your take on Shapeshift. Was student in the US and moved back to my country due to the uncertainty that prevails there not just in the crypto world but the technological environment too. Resteeming it !

Thanks.

Is the way the US state seeks to centralize the decentralized, because they can not allow anything that has to do with economics do not go through the FED, the truth is incredible, hopefully this revolution of the cryptomonedas make understand the bulk of the population That we want more freedoms in terms of our economies. Thanks for sharing, regards.

You're welcome. I think long term they can't suppress them.

Very informative post..Resteemed!

Thanks!

Too much regulations there. Maybe shapeshift can transfer here in the Philippines instead :)

:)

I don't know if this is of any help at all and you might know this already, you can get an e-citizenship of Estonia online and start your business there. Sorry if this is useless, just putting my 2 cents in there ;)

Thanks. You are right. In fact I remember reading about it earlier.

:)

The principal! He will give me TP! I would hate for my bungholio to get polio....Where I come from, we have no bunghole.

oh these regulations :( very sad to know about that

Yes.

In my opinion as the cryptones are growing they are going to be more regulations and obstacles that states put in all the countries, I am from Argentina, I work with xapo, virex, Aitm-Uphold, I had to update my accounts, sending a series Of documentation, once verified I can continue with my transactions. If he did not he could not work with them.
Thank you very much dear friend @thecryptofiend for sharing this information, your point of view and your experience
Have a great day

US is supposed to be the most liberal country out there. You can have big guns, but not digital coins. Strange!!

US is more like a collection of countries with some laws that apply in all of them and some that don't. I suspect some states will take a more enlightened approach to crypto.

  ·  2 years ago (edited)

As a fellow Washingtonian, it's important to stay on top of our opportunities to invest in cryptocurrencies. I've written a follow-up article listing companies that have went through the Washington State Compliance Process and are currently accepting Washington State Residents:

https://steemit.com/cryptocurrency/@gomain/washington-state-friendly-cryptocurrency-exchanges-and-businesses

The list will be updated as new companies enter the market within the state. Bitflyer is newest entrant into the Washington State Crypto Market.

ShapeShift is the exchange used by the excellent Exodus desktop wallet. I'm hoping these news won't affect Exodus negatively in any way.

Not sure.

Bleh!
Of course they want it under a hammer.
In their opinion if they even think anything rains money and they can't take a fat chunk of it, all the laws have o be changed so they can.

Danggg...that sucks!

So how does this work?

Do they ask you ahead of time on shapeshift if you're native to Washington and if so you can't participate in Shapeshift transactions?

I've never had to create a user account on Shapeshift so I'm trying to figure out how this is going to play out?

Anyone have any ideas?

~nX

I'm assuming they will have some kind of IP address checking. Not sure what else they can do.

NIce

How is it nice? Did you even read the title?

Everybody talks about how bad the Nazis are, how bad the Communists are. But do you realize that you in “The Greatest country in the World” hit the all time bottom? And as George Carlin was saying: "Nobody seems to notice, nobody seems to care".

This post is not about Nazis or Communists. Plus I'm not in the US.

I did not mean to offend you. But i think that all these restrictions are similar.

You didn't offend me. I just wasn't sure how it was related.

I am not surprise at all.

I suspect we will see more of this.

:((

nice...

You obviously didn't read the post. It is not nice at all.

I like your akun

?

Awesome

Shout out to VPN services

I suspect a lot of people will be using them more and more.

agreed

ShapeShift should maintain darkweb addresses on i2p and Tor.

They could but that is not protection against government crackdowns.

I like your post @thecryptofiend ...blessings

Thanks!

Very amazing work my dear friend @thecryptofiend and very nice cat. I wrote post about my trip in the town Sergeevka in the city Odessa part 3 + 1 little video in slowed down Look it's very interesting: https://steemit.com/travel/@bugavi/an-exciting-walk-through-the-streets-of-the-town-sergeyevka-with-the-sea-in-the-city-of-odessa-part-3-and-little-1-video-in

verry good

I would say it is bad.

I'm not at all surprised to see our state government creating regulations, it seem inevitable...

I am excited to see so many other Washingtonians here!

  ·  2 years ago Reveal Comment