![]() These obligations caused the exit of major exchanges from Washington, including Bitfinex, Kraken, Poloniex, and ShapeShift. In addition to posting a surety bond of up to $250,000, exchanges must undergo third-party audits of their data systems and hold non-tradeable reserves equal to the volume of cryptocurrency maintained as customer deposits. State Bill 5031 - passed in 2017 - defined cryptocurrency exchanges as money transmitter businesses and required them to register as such before operating in the state. The Washington State Department of Financial Institutions describes its mission as "striv to protect businesses and consumers while not unnecessarily impeding the development of new technologies that might improve existing payments systems or create alternative payment systems." While the resulting laws have provided some much needed clarity about the laws applying to the blockchain space, they have also forced out a number of exchanges which find the regulations too onerous. Washington has also taken an active approach to recognizing and regulating Bitcoin and cryptocurrency operations. The presence of these innovative and rapidly growing companies in the state has not been without controversy and a string of well-publicized legal battles in courts, both state and federal. Washington's technology industry in concentrated in the Seattle area, which has launched leading companies like Microsoft and Amazon. Chapter 1 Bitcoin & Cryptocurrency Trading in Washington
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