ShapeShift Halts Washington Services

Announcements, Crime, FinTech, News, Regulation | August 31, 2017 By:

Cryptocurrency exchange ShapeShift will halt operations in Washington state because of local regulatory policies.

Washington state legislators passed Senate bill 5031 in April. The new law, which took effect in July, aims to regulate money transmitters and currency exchanges in the state, including digital currency operators. Any entity or individual who wants to operate a digital currency exchange in the state now needs to apply for a license and contract with a third party auditor to monitor and inspect their system to ensure its transparency and integrity.

In a blog post, the ShapeShift team said that they believe that this position – like the position taken by New York regulators in the similar BitLicense case – endangers customers, stifles growth, and generates unnecessary frictional costs for young innovators.

“We believe the position that Washington’s regulators have taken is unethical, wasteful, and reckless,” said ShapeShift. “We cannot expect the same people, and the same thinking, that designed, built, and promoted the legacy fiat financial system to do what is needed to build a better alternative.”

Earlier this month, ShapeShift acquired hardware wallet KeepKey, which is based in Washington. KeepKey will now move its headquarters away from the state.

The ShapeShift team also encouraged other US states to work with proficient organizations like Coin Center, which understand blockchain and digital asset technology and the value it brings to society, in planning more responsible policies.