Poloniex Quits Washington State as New Exchange Rules Become Active

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. 

Also read: Fork Watch: Take Extra Precaution When Trying to Access Post-Fork Tokens

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.

Washington's Bitcoin Exchange Rules Become Active

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.

Washington's Bitcoin Exchange Rules Become Active

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.

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  • Government hasn’t taken care of our fiat currencies…that’s the reason bitcoin and other altcoins are so attractive. They grow while or fiat tanks.

    • Not surprising. Washington is the stinkiest criminal swamp in the Nation. They hate the freedom and transparency that the cryptos bring. They also rely on the infinite supply of FIAT currencies to bribe Washington politicians and they don’t want other currencies competing with their dirty FIAT…

      • PNWtech

        Washington State is not a criminal swamp. Way to many trees. Did you read the article?

        • Luis Fernando Aguila Vdj Leon

          Is an attack on the freedom of citizens

  • Just another step in the direction of governments trying to figure how to regulate, control and cash-in on the blockchain technology. Not surprising. At the same time, it can be a good sign with their willingness to accept the validity of bitcoin. Hard to say, it is still early, but awareness is what propagates growth, so time will tell…

    • Angelo Jamaica

      I burried my cryptos in the back yard and a metal detector cannot find them.

  • William Wanklyn

    Consumer protection by regulation is not my idea of a good thing. I would prefer strong enforcement of fraud cases in the court, and easy access to judicial review.
    As we see here, the regulation is disenfranchising Washington residents.

    • Angelo Jamaica

      Its called bank protection. The consumer is always bending over and now instead of 110 you get zapped with 220. I have a crypto but plug so they can kis my but.

  • Liberty88

    Washington State hasn’t pulled their head out of their ass – one of these days they’ll understand – but for now they’re run by libtards.

    • Angelo Jamaica

      Then they should vote these fkrs out of office.

      • Jake

        I never voted for those basterds in Eastern Washington we believe untirely different then they do in Western Washington

  • Angelo Jamaica

    Let me get this straight, You passed a law to protect banks and make it legal to steal the customers deposits by calling them creditors. This is funny, I gave my account to my girlfriend overseas, problem solved. It is in her name now and if she runs with it so much the better at least these ^#@&^E*&^E*^E*E are not getting any part of something that does not exist LOL

  • Angelo Jamaica

    Just move your cryptos to the Cayman Islands just like all the crooked politician store their fiat off shore. If anything just tell the hell the russians did it and I got hacked. Now poooofff they are gone. That is something that these bastards understand.

  • Angelo Jamaica

    Just take a good look at the picture of the producer of this article and I do believe the expression on his face says it all. But in the meantime lets have a little fun with it.
    NEO all the way to the next GALAxie. 🙂 It stated I cannot reply to your post Assfirstnews because you are not active, just fyi.

    • Sterlin Lujan

      What? I do not understand what you are trying to say. Mind clarifying?

  • It is much worse than reported. The law is online to read. Fact is they do not regard the exchange, they ignore it and redefine them as Money Transmitters and exclude all other government services that do the same without their requirements and auditing. Also, a Money Transmitter is a “person” as they defined, (19) “Money transmitter” means a person that is engaged in money transmission.They built a law tailored specifically to virtual currency in parenthesis in the definition (18) Money Transmission. Their definition for #30 Virtual Currency is (30) “Virtual currency” means a digital representation of value used as a medium of exchange, a unit of account, or a store of value, but does not have legal tender status as recognized by the United States government. “Virtual currency” does not include the software or protocols governing the transfer of the digital representation of value or other uses of virtual distributed ledger systems to verify ownership or authenticity in a digital capacity when the virtual currency is not used as a medium of exchange. It means Washington Legislators want exchanges or person acting as a Money Transmitter( a licensed person or delegate) to track and assure any virtual currency transmission through licence requirement of the State. Intrusive and very expensive and possibly will cover any individual person to person transaction. I think they are setting up for personal seizures. The more you read the law the more you do not want to do virtual currency transmissions within Washington State.

  • How to make your citizens even more poor, well done Washington! One more step to economy’s death.

  • Todd Hoch

    I feel for you Washington residents. I live in Hawaii and our retarded government legislated Coinbase and other US based exchanges out of Hawaii. I struggle to buy crypto.

    • Sterlin Lujan

      Try localbitcoins.com maybe?

  • grapesodabanked

    Government and the future cannot coexist. A choice will have to be made.

    • Definitely the future when it comes to High IQ items. I don’t consider someone in need of government assistance and protection when you are taken or convinced in a confidence scam in cryptocurrency, virtual currency, digital assets or the like. It is pretty obvious that your noodle is not up for the subject when you cannot figure out where the weirdness goes. And the same goes for building a Law regarding these subjects, should not be allowed to vote or preside over High IQ items. They have security clearances for those who can keep a secret and very small risk of being leveraged to tell secrets. I think the same should be done for Lawmakers, an IQ clearance. Maybe this might bring coexistence for them and the future? By the way…I am John Galt…

      • Your ignorance as well as your arrogance is your limitation.

        • A lot in Life is that truth is a hard pill to swallow. It is only a matter of time and demonstration of misuse of power that the affected powerless will rise up. All you have to do is read the exemptions the Lawmakers have given themselves, the raises they have given themselves, the side deals they have given themselves and the participation they have reaped after they have created for themselves. The very reason Carter, Reagan and Clinton had a line item Veto. A clue; A US Senator from Maine is wealthier today after he cut out a special deal for his State and participated in building a business the Law allowed after his participation in pushing it through his committee. You first have to be willing to seek the Truth in order to be influenced by the Truth. There are many more in all parties and even some more unethical within the State Congresses. I am only limited by what they do not record and I agree less than the truth has been recorded.

  • chech0

    All regulations are bad, just look at new york it drove all bitcoin bussines away. Normally regulations are made to grant profits to politicias, its mafia that hurts the little guy, it prevents the little guy from participating in the economy, without regulations the little guy can participate in the economy, with regulations he is out since the extortion fee could be bigger than his profits. A true capitalist society lets everyone participate in the economy. Most regulations by far restric your freedoms, the regulations that grant you freedom are very rare and broken by the regulators. The USA constitutions grants you freedoms but the enforcers break the law. As bitcoin price goes up I expect more regulations to come into existence contradicting the few laws that grant you rights.

  • sjs

    Slowly but surely their grip tightens.

  • John Kaswandik

    Fishy! Gemini has been handed a monopoly in Washington state.

  • Not surprising. Washington is the stinkiest criminal swamp in the Nation. They hate the freedom and transparency that the cryptos bring. They also rely on the infinite supply of FIAT currency to bribe Washington politicians and they don’t want other currencies competing with their dirty FIAT.

  • Jake

    This is why I hate Seattle and Olympia they dictate how we feel at Eastern Washington it’s ridiculously how different we are I’m all for making us a different state now I half to get a fu***** license to exchange bitcoins… That’s not going to happen.

  • If somebody wants to risk there money that is nobodies business but theirs.

  • Sean Michael

    Show me one thing the Government ever touched that did not end up as messed up as a “Soup Sandwich. Bungling bureaucracies are nothing more than another stumbling block in road to inhibit innovation.

  • Allan Harris

    Authorities getting involved with something the common man created for himself and already they display how they can F**k your business over while disguising it as protection and a helping hand. They did absolutely Zit to get crypto where it is today.

  • John Dozier

    Thanks for the tip Uphold looks great!