Delayed Bitcoin ETFs, subpoenas, and blockchain businesses forced to close, Bitcoin regulation in the U.S. is hardly encouraging innovation. If you’re looking for friendly pastures for your cryptocurrency company, avoid these three states at all costs.
1. New York
New York has consistently hit the top of the list for its unsympathetic Bitcoin regulation. Its infamous BitLicense has been called out as “regulatory overreach” by many a key figure in the industry. These include ShapeShift’s Erik Voorhees and Kraken’s Jesse Powell.
Speaking at Consensus in New York last year, Voorhees stated:
Here we are two miles from the Statue of Liberty and you cannot sell CryptoKitties in the state without that license. That’s the absurdity of what’s happened here.
Powell meanwhile spoke out against the former New York Attorney General Eric Schneiderman. He sent Kraken a request for customer information a full three years after the exchange had stopped doing business in New York.
New York’s BitLicence has forced many a crypto company out of the state, highlighting the fact that regulation at a federal level is needed.
Under the stipulations of BitLicence, exchanges have to disclose all information about their entire global client base. This is something not only abhorrent to most customers but also potentially illegal. Other countries have different privacy laws from the United States.
However, a change may be on the horizon. New York’s Governor Andrew Cuomo recently signed a digital currency study bill creating the first cryptocurrency task force in the US. This will comprise technology and blockchain experts, as well as investors and researchers.
The task force’s goal is to promote a healthier cryptocurrency economy while protecting New York investors. Time will tell if it’s a success or yet another case of regulation on steroids.
2. Rhode Island
Rhode Island recently earned a place on this list as one of the worst states for Bitcoin regulation. Senator Sheldon Whitehouse labeled cryptocurrencies as an easy way for “foreign interference” in American elections. He also laid out new tax regulations for virtual currencies.
The new Rhode Island Senate Bill No. 251 is called “An act relating to taxation — sale and use tax–non-collecting retailers, referrers, and retail sale facilitators act.” Apparently, the intention of the bill is to:
Assess sales tax on marketplace facilitations, including those that provide cryptocurrencies used by buyers to pay for services.
In other words? Make doing business a whole lot harder for blockchain businesses in the state. Wall Street veteran and cryptocurrency supporter Caitlin Long was quick to criticize on Twitter.