Bitfinex Bans New York State Residents due to BitLicense
Bitfinex has been one of our favorite exchanges due to it’s trader friendly nature. Features like margin funding, advanced trading features and other such things we’ve covered in our article here. These features allow an advanced trader to trade upon Bitcoin price speculation. Recently, Bitfinex has banned New York State residents from using Bitfinex due to their lack of a BitLicense. Being a large company, Bitfinex should be able to obtain a BitLicnese quite easily, but they are rejecting many customers due to this legislation. In various other states including New Jersey for now do not require this Bitlicense to utilize their full trading capabilities as of the time of this writing.
This leads us to the question just exactly how much regulation can and will be put going forth into cryptocurrencies by central regulating authority figures in the future. All we can do is speculate how far regulation will go to directly affect Bitcoin and the transactions surrounding it. The whole purpose of Bitcoin is a form of currency away from the grips of more traditional banking financial institutions.
But the immediate impact for us today is that we can longer access the functions on the Bitfinex exchange unless we file for an official license for bitcoin transactions with the proper regulating officials. Let me just state that having full capabilities on most major exchanges Bitfinex included comes with a large set of hurdles to begin with. BTC-E for example as it stands won’t accept transactions to cash out in the United States. Now in the state of New York we are no longer able to use Bitfinex to buy on margin, short sell, trade, and lend bitcoins at interest. Bitfinex Bitlicense requirement is just another hurdle residents in effected states must go through in setting up a fully functional account on the exchange.
Don’t Expect Bitlicense to go Away Anytime Soon
New developments will continue to occur within the bitcoin ecosystem. We’ve seen changes to the blockchain, updates to bitcoin security and the failure of exchanges. A degree of order and regulation in this space is necessary to maintain order to prevent misuse of BTC. However part of the appeal of BTC is its self-reliance, it’s ability to stand alone as its own currency away from traditional central currencies issued by authorities. The question is just what level of outside intervention to ensure the development of btc is necessary and what amount of regulatory oversight is acceptable before it begins to infringe on the very foundation of BTC.
The effects of Bitlicense