State BitLicense Requirements Forcing Bitcoin Mining Firms to Move Away from New York!
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The New York State BitLicense and its requirements are forcing bitcoin mining companies to move away from the state and refusing to serve or do any business at all with residents of the State of New York.
The company has made an announcement recently on its website that all residents of the State of New York in the US who are in or accessing Eobot for their bitcoin transactions should withdraw all coins and cease all mining with the firm because the company will cease its connections from within New York State starting July 1, 2015, reports CCN. LA.
Eobot allows the mining of Bitcoin, Litecoin, BlackCoin, Namecoin, Dogecoin, Dash, Reddcoin, BitShares, CureCOin, StorjcoinX, Monero, Counterparty, Stellar, ByteCoin, Peercoin, NXT, and MaidSafeCoin.
The New York State BitLicense is a new regulation implemented by the New York State Department of Financial Services (NYDFS) to have an oversight on bitcoin mining transactions in the state.
The final BitLicense rules were released at the beginning of June on the NYFDS website. According to Ben Lawsky, head of the NYFDS, the goal of the BitLicense is to establish a balance between protecting consumers and allowing software developer the ability to create bitcoin products.
But in order to apply for licensure with the NYFDS, bitcoin mining companies need to shell out a fee of $5,000 which is meant accordingly to offset the cost that NYFDS incurs in processing and reviewing the application, along with any relevant materials. In addition the NYFDS is also requiring extra fees to licensees for additional applications related to the license.
This new imposition or regulation has turned off a number of Bitcoin mining companies operating in New York State as such regulation is non-existing in other major markets in the world.
Two pull outs in two days
Eobot’s recent pull out announcement from New York State also follows the closing of the BTC Guild mining pool on June 30, 2015 also because of the New York State BitLicense.
BTC Guild disclosed that while they do not have an office in New York, their pull out is basically meant to say that they would no longer be accommodating any business with New York residents after the end of this month, a transaction which the NYFDS can claim jurisdiction and enforce its regulations on BTC Guild.
With Eobot’s pull out happening in July 1 and BTC Guild’s opting out on June 30, that would be two pull outs in two days from the New York State as a result of the New York State BitLicense.
Other fallouts
In addition to the upcoming pull outs, there are also other fallouts from other bitcoin mining firms as a result of the New York State BitLicense regulation.
Switzerland-based cryptocurrency exchange ShapeShift also announced last week that it is suspending service to residents of New York State as a result of the BitLicense regulation.
Erik Voorhees, founder and CEO of ShapeShift, explained that BitLicense collects an ‘Orwellian’ amount of information on users and creates security risks. It also re-connects personal information to transactions that would be anonymous otherwise.
Unlike in the traditional money systems, governments simply print more money when they need to, in bitcoin, money is discovered. Computers around the world mine for coins by competing with each other.
Bitcoin mining is the process of confirming bitcoin transactions between people over a bitcoin network and keeping a record of it in a general ledger. It is actually the network that keeps all the transactions and puts them into a list called block. The miners’ job is to confirm those transactions and record it in the general ledger
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