Eobot Quits NY, Thanks to BitLicense

Eobot, a cloud based Bitcoin mining company has decided to pull out of New York State after being disappointed with the state’s licensing requirements for Bitcoin and other cryptocurrency related businesses. Eobot becomes the second company after ShapeShift.io decided to shut down its New York operations as they didn’t want to share user details and personal information in accordance to New York BitLicense terms.

In an announcement on its website, Eobot states that the company will be ceasing its operations within the State of New York from July 1, 2015. It further requests users from New York State to withdraw all the coins that they might have in their accounts before next month. According to the company, it was forced to comply with BitLicense regulations if it had to operate inside the State of New York. Implementation and maintenance of these compliance standards is also highly cost intensive which companies like Eobot aren’t comfortable spending.

The final version of BitLicense was released early this month by the outgoing superintendent of New York State Department of Financial Services (NYSDFS), Benjamin Lawsky. Even though the final version was the outcome of over a year of deliberations, drafts and amendments, it left a majority of Bitcoin community disappointed. In the name of customer protection, BitLicense goes a bit too far to effectively strangle innovation in the cryptocurrency sector. New York State’s BitLicense compliance requirements are said to be tougher than federal regulations for banks.

While itBit became the first Bitcoin Company to be granted BitLicense by the New York state, Switzerland based ShapeShift.io became the first Bitcoin Company to turn down BitLicense and pull its business out of New York. Eobot has become the second company to look away from the Empire State. Unless BitLicense is amended to make it easier for cryptocurrency based business ventures, New York may well lose its spot in the new digital economy of the future.