Back in April, Washington politicians finished piecing together and finalizing the regulations for bitcoin exchanges. Those guidelines and rules are now active. Lawmakers pushed Senate Bill 5031 through the House and Senate, and it was signed into existence by governor Jay Inslee.
Bill Requirements for Bitcoin Exchanges
The rules declare that anyone who operates a cryptocurrency exchange within Washington must apply for a license from the State. They must also contract with a third party auditor and have their system disrobed and inspected.
The bill states, “For business models that store virtual currency on behalf of others, the applicant must provide a third-party security audit of all electronic information and data systems acceptable to the director.”
Lawmakers also created a rule that says exchanges have to have a bond associated with their business. The figure of the bond has to be tied to the amount of currency transacted in the previous year.
Reaction From Popular Exchanges
As a result of the new law, major exchanges Poloniex and Bitfinex said they would cease conducting business in the state. The new regulations do not seem to jibe with their goals and ability to serve the customer. However, the exchange Gemini has already been granted approval and a license to begin allowing Washington-based clients to buy and sell on their exchange. The Poloniex website read:
After careful consideration of the Washington State Department of Financial Institutions’ interpretation of its financial services regulations, Poloniex will suspend Washington account creation until further notice. For existing Washington customers, you will receive an email with instructions on how to wind down your account.
What do you think about Washington’s new regulations? Do you think these are good for bitcoin and cryptocurrency exchanges? Let us know in the comments below.
Images via Shutterstock
Have you seen our new widget service? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool and you can customize by size and color. The widgets include price-only, price and graph, price and news, forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power.
Purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here.