Bitcoin Exchange ShapeShift Protests Against BitLicense, Suspends NY Service

In light of the new bitcoin regulations imposed on virtual currency businesses based in New York, ShapeShift, a cryptocurrency exchange platform, has decided to shut down its operations in the area.

The timely announcement came after the company launched the first iOS Bitcoin trading app at the Apple’s World Wide Developers Conference (WWDC).

During a CNBC interview, ShapeShift chief executive and entrepreneur Erik Voorhees released the following statement:

“We either would have to do something we’re not comfortable with or leave New York. It’s a moral and ethical stand we’re going to take. ShapeShift does not store any currency or user information, thereby eliminating the risk of users’ funds being compromised in a Mt. Gox-type attack. The same security principles will apply to the newly introduced mobile app as well.”

The bitcoin licensing rules set forth by Benjamin Lawsky and the NYDFS earlier this month applies several proactive data-gathering guidelines designed to thwart digital fraud, money laundering and other criminal activities.

In particular, Voorhees has conflicting views about recording customer information for Know-Your-Customer (KYC) compliance. He clarified that the company is willing to provide generic data on wallet addresses, IP logs, and devices.

However, the bitcoin advocate, who founded Coinapult and draws experience from BitInstant, takes a firm stand on consumer privacy and feels customers’ names and addresses are off limits.

Because of this, the business finds the rules to be anti-competitive and risky for users who are concerned about protecting their identity.

“Identity theft is an epidemic, more costly to society than many other forms of theft and crime,” mentioned Voorhees. ”

“Bitcoin has finally solved this problem, by enabling 100 per cent secure transactions without attaching your private information. Now, New York wants to mandate that consumers continue to be put at risk, even though technology has provided a solution to identity theft.”