Poloniex Blocks Bitcoin Trading Services In New York Following Controversial Bit License Requirement

Poloniex a very popular U.S. based cryptocurrency trading exchange platform will block New York residents from services beginning August 8th 2015. Users of the site have been issued an email warning letting them know they must remove funds if they reside in NY.

“In accordance with the New York State Department of Financial Services, Poloniex will no longer be allowed to provide services to residents of the State of New York starting on August 8th, 2015. If you are a resident of New York, please take appropriate measures to withdraw your funds by 11:59pm Eastern Daylight Time on August 7th, 2015. For more information or for further assistance, please contact our support staff by going to poloniex.freshdesk.com.”
— Poloniex Bitcoin Exchange

On the 24 of June the BitLicense was adopted by New York legislation and is now recognized by The New York State Department of Financial Services (NYDFS).

Bitcoin and virtual currency businesses must apply for a license within 45 days from its initial announcement of which August 8th is the deadline for all virtual currency operations to comply.

“Any person engaged in virtual currency business activity that fails to submit an application for a license within 45 days of the effective date of this regulation shall be deemed to be conducting unlicensed virtual currency business activity.”
— BitLicense Transcript

Recently, Shapeshift another very popular cryptocurrency exchange based in Switzerland also blocked services in the State of New York in protest of the BitLicense.

Founder Erik Voorhees believes the license is unethical, and exposes personal user information creating Please Protect Consumers in protest against mass data collection and sharing of personal user information. ShapeShift was praised by many in the Bitcoin community for it’s stance against state regulation and data collection.

Andreas Antonopoulos tweeted to fans after this announcement and his perception of what Shapeshift accomplished:

“Kudos to ShapeShift for refusing to become a honeypot of PII just to satisfy NY regulators.”
— Andreas Antonopoulos

Data collection is believed by the community to be unethical after revelations recently revealed by Edward Snowden about the illegal surveilance of millions of America citizens by the NSA.

More companies are expected to follow Shapeshift and Poloniex in protest of unethical as well as unconstitutional and unreasonable regulation. Let this message speak loud and clear to other states such as California that these types of unwarranted regulations will only stifle innovation and most likely block your state from participating in the development of an amazing and phenomenal technology.

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Since mid 2014 we have witnessed the mass extinction of many of the altcoin exchanges that had been in existence at the beginning of 2014.

The question is “what happened”? Many say it is due to regulations while others attribute the disappearance to fraud and abuse.

While a few cases can be chalked up to the above mentioned causes, noting some of the well known examples of Mt. Gox, MintPal and CryptoRush there are still many unanswered questions.

During the same time period and almost simultaneously the number of “Bitcoin Only” exchanges began increasing on a massive scale and yet have not experienced any situation similar to what was experienced with the altcoin exchange, why?

If regulation is the cause why do we see an increase in “Bitcoin Only” exchange and a decrease in the altcoin exchange?

Do not get me wrong, regulation does play a roll and as we have seen recently the popular altcoin exchange “ShapeShift” has left the state of New York in protest of the new bit-license, ShapeShift simply moved to a more suitable location that does not have such “Orwellian” measures in place to maintain corrupt, centralized, financial control. That said, it is possible to get around regulation, even ItBit who by the way chose to remain in New York, found a way to work around regulation in a way that absorbs the impact of regulation and protects it’s users privacy to a certain extent.

Fraud is also another problem that affects the altcoin exchange and it seemed for a while it was almost systematic, hackings here, hackings there, we all understand fraud is a serious problem when it comes to finances however why were “Bitcoin Only” exchanges untouched? Why is it that the onslaught of hacking incidents were targeted at the altcoin exchange? Now, it is reasonable to say that hacking theft or fraud, in some cases can be attributed to an inside job like that of Mt.Gox however, the majority of cases were perpetrated by hackers on the outside, the hacking of Poloniex a popular altcoin exchange is an excellent example of outside interference. Since the attack, Poloniex has beefed up it’s security and is now one of the most used and trusted altcoin exchanges on the planet.

It seems that there is a selective process going on that may or may not include an assassination campaign targeted at the altcoin exchange. The rug is being pulled out from under the feet of the initial foundational concepts and ideals that came together to create Bitcoin and the blockchain in the first place. This technology has always been based on consensus which now is slowly fading to black as most exchanges in existence today are not taking this into consideration. Instead of allowing the community to choose which currencies get listed on an exchange as was initially in place, now the exchange itself makes those decisions which could be considered a conflict of interest to say the least.

Where is it all leading?

Are we witnessing a hostile takeover? Is Bitcoin being co-opted by nefarious parties for their own nefarious purposes? Thus, it would stand to reason that if this is the case, “competition is a sin” as the late J.D. Rockefeller proclaimed, unfortunately altcoins are competition and represent a threat that must be dealt with.

There is a battle waging in the world of digital currency and there are signs of this battle all over the place, if you look close enough, you will notice that something is amiss. There undoubtedly is an attack being carried out against altcoins and the altcoin exchange. If you look closely at the big picture you will begin to see something that is very familiar but extremely bad for bitcoin and the whole ecosystem, what you will see are the beginning stages of the harnessing of bitcoin and the blockchain by individuals who want nothing more than to centralize and control it, they are the same individuals who drove the current fiat system into the ground and now they are attempting to infiltrate and co-opt our only lifeline to financial freedom and possibly a world where transparency in all things is possible.

Those of us who have helped to develop this technology to this point realize what is going on and recognize the importance of educating the masses not only on the technology but also on the threats to our freedoms as we know them today if this technology falls into the wrong hands.

Do not let history repeat itself!