Poloniex, a Delaware-based digital currency exchange and one of the most popular trading venues for alternative digital assets, will be closing its doors to residents of New Hampshire temporary basis, citing new virtual currency regulations in the state.
The exchange has informed all existing New Hampshire users to withdraw any remaining funds by October 6, 2016. As part of the suspension, existing New Hampshire clients have been blocked from trading and new registrations from the state have also been halted for the time being.
While Poloniex has been quick to implement the restrictions, the exchange explained that services in New Hampshire may resume at some point in the near future, pending the acquisition of certain licenses:
“Our legal team is working closely with the State of New Hampshire Banking Department and other regulatory agencies to verify that changes in their statutes apply to the services offered by Poloniex and to seek licenses where necessary.”According to new crypto-currency statutes passed at the beginning of this year, anyone who facilitates the exchange between a virtual currency and fiat currency is classified as a money transmitter, which requires a license and a $100,000 bond, in addition to several other fees. The new rules do not apply to digital currency users, who use digital assets for purchasing goods and services.
New Hampshire regulators claim the new rules are designed to offer additional protections to the general public, however, critics say digital currency startups will be at a disadvantage due to higher startup costs. Additionally, the new rules are very vague when it comes to classifying digital currency miners.
Virtual currency legislation and the industry as a whole is still in the nascent stages, and these sort of disruption are to be expected, states Poloniex:
“This is a nascent industry; as the regulations around it mature, these types of service disruptions may not be entirely avoidable, but we have been and will continue to be proactive in educating regulators and monitoring both existing laws and upcoming changes to these laws so that we can limit interruptions wherever possible.”