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Bitcoin Exchange Bitstamp to Exit Washington State Due to Regulatory Constraints

Last Updated March 4, 2021 4:52 PM
Rebecca Campbell
Last Updated March 4, 2021 4:52 PM

Luxembourg-based bitcoin exchange Bitstamp has announced that after recent regulatory constraints imposed by the State of Washington, it will cease to serve customers from The Evergreen State, effective 20 December.

One Reddit user posted the letter , concerned it may be a phishing attempt, which stated:

We kindly ask you to withdraw your funds by 20th December 2016 by means of bitcoin or international wire. Your account will be closed after the deadline has expired.

As one of the leading bitcoin exchanges that operates out of Luxembourg, the U.K., and the U.S., it hasn’t provided any clear reason regarding the regulations in question that forced its decision.

The letter adds:

We sincerely apologize for the inconvenience. We are actively working to restart our services within the State of Washington and we will inform you as soon as the situation is resolved.

Earlier this year Bitstamp became the first fully licensed bitcoin exchange in Europe permitting it to operate as a payment institution across the European Union, and further subjecting it to numerous anti-money laundering (AML) and know-your-customer (KML) regulations.

Is Bitstamp Protecting Itself?

In a bid to increase its currencies, Bitstamp announced in June that its clients would be able to trade Euros for Dollars. It marked the exchange’s entry into the biggest traditional currency trading pair in the foreign exchange market.

However, given the recent news regarding a federal judge approving the Internal Revenue Service (IRS) summons requiring bitcoin wallet and exchange Coinbase to disclose transaction records of bitcoiners, Bitstamp may simply be protecting itself from additional problems that it might face.

Pro-Regulatory Moves in Washington D.C.

And yet, despite this news in the State of Washington, the nation’s capital Washington D.C., has been taking positive steps with the advancement of blockchain and FinTech in recent months.

In September, Coin Center, a Washington D.C.-based non-profit and advocacy center focusing on public policy issues facing bitcoin and blockchain technology formed a Congressional caucus focused on studying the new technology.

Its aim is to help policy-makers understand decentralized, open technologies such as bitcoin and ethereum blockchains.

Washington D.C., is seeing a number of blockchain and Fintech related developments.

Earlier in the year, the Office of the Comptroller of the Currency (OCC) opened a forum bringing together thought leaders to help overhaul outdated financial legislation by considering new technology such as the blockchain.

Of course, while pro-regulations are being made for the advancement of blockchain and FinTech in some states, in others they are taking place at a slower rate.

For now, it remains to be seen what impact Bitstamp’s announcement will have on the State of Washington and whether Bitstamp will, at some point, serve its customers there again in the future.

Featured image from Shutterstock.