Bitcoin exchange itBit stops supporting residents of Texas

In a statement made to CoinDesk regarding social media posts about itBit stopping services for residents of Texas, itBit said that they confirm that itBit is no longer supporting Texas residents at this time. 

Affected customers in Texas have until the 14th of April to withdraw their funds from the exchange. CoinDesk received an email sent to a customer of itBit about the change, which read:

“We regret to inform you that starting today, itBit will no longer be supporting Texas residents. Your existing account may not be used to trade on our exchange or OTC trading desk.”

Unfortunately many Texans are left in the dark, as not much more information has been provided by itBit or through customer interactions with the exchange other than the auto-email that was sent out to all affected customers.

New York based itBit bitcoin exchange holds state money transmitter licenses in all other U.S. states, and has a banking charter in New York. However, it appears the banking charter may not cover Texas, but it’s unclear if this change is initiated by the state of Texas or by itBit.

This past November, the Texas Department of Banking issued a new memo to all money service business license holders, such as itBit, revising the policy for domestic MSBs that conduct business from nontraditional office locations. In the memo, it says that all MSBs must hold an office location in the state of Texas in order for the state to perform audits. It also says,

Pursuant to Texas Finance Code § 151.601, MSB license holders shall provide, and the Department shall have full and complete access to, all records the Department may reasonably require to conduct a complete examination, and the records must be provided at the location and in the format specified by the Department.

Beyond the size and site of the examination location, the MSB must also provide for at least one employee to be physically present to assist with the examination. The employee must be knowledgeable about the MSB’s business operations and computer systems.

These requirements may have forced itBit to pull their services out of the state, as the ornery rules may put unneeded pressure on them which are cost inhibitive to the exchange to continue it’s operations in Texas.

It’s important to note that other bitcoin exchanges continue to hold state licenses in the state of Texas, such as Coinbase and Gemini.

SHARE
david@bitcoin.com'
David is a writer, researcher, and developer who is passionate about bitcoin and blockchain. He writes for Bitcoin.com, Blockchain.com, and is the founder of Bitcoinx.io (which was acquired by Bitcoin.com). David previously used to write and curate for Myspace and has worked in the fintech and payments space for over 15 years.