New rules for cryptocurrency exchanges in Washington State

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cryptocurrency exchanges

Recently, there were enacted legislative changes about cryptocurrency exchanges in the state of Washington. Those legislative changes equate the cryptocurrency exchanges to the companies that make money transfers. As a consequence, that will oblige them to obtain the appropriate license from the Department of Financial Institutions of the State.

New law for cryptocurrency exchanges

The law came into force on Sunday, July 23. In addition to obtaining a license, the cryptocurrency exchanges operating on the territory of the State must periodically undergo an independent cybersecurity audit. They also must fully reserve their customers’ deposited funds.

Ethereum Classic

In April, both chambers of the state legislature approved Bill 5031 and sent to the governor for signature.

Let us remind you, the fiercest opponents of the new rules are the following crypto currency exchanges Poloniex, Bitfinex, Kraken, and Bitstam. All of these cryptocurrency exchanges ceased their work in the state of Washington due to a complicated regulatory environment. Reminder, the state capital of Seattle has one of the popular cryptocurrency exchanges Bittrex.

Earlier situation

If you remember, before that, the Governor of Nevada signed the bill, which prohibits taxation of blocking transactions.

Senator Ben Kickhefer introduced the draft law in March. The purpose of the normative document is to create a legal framework for the use of records and contracts based on the blockchain. According to the document, the state authorities can’t levy taxes on transactions from blockchain. They also can’t license the activities of companies working with distributed registry technology.

Earlier, this kind of law came into force in Arizona State. It recognized the legitimacy of signatures stored in the blockchain, and the use of smart contracts.

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