Today, ShapeShift joins some of the world’s most innovative blockchain technology companies in leaving the State of Washington.
The state’s regulators have taken the position that a new law, “Senate Bill 5031”, should require a license for blockchain service providers operating in the state. Under this interpretation of the law, we would now be required to ask permission from Washington before we buy and sell our own property for our own account. Moreover, we would be required to spend hundreds of thousands of dollars to maintain a license, only to extract our users’ personal information and store that information for hackers to steal.
We believe that this position – like the position taken by New York regulators in the BitLicense – endangers customers, stifles growth, and generates unnecessary frictional costs for young innovators. Worse, it does so for little to no gain for the State’s residents. Because ShapeShift is noncustodial, there is no more risk of loss to our customers than to the customers of a snack machine.
We believe the position that Washington’s regulators have taken is unethical, wasteful, and reckless. We cannot expect the same people, and the same thinking, that designed, built, and promoted the legacy fiat financial system to do what is needed to build a better alternative.
Still, as a customer-facing service provider operating in hundreds of jurisdictions, ShapeShift AG takes regulatory compliance seriously. As such, we are terminating service to Washington. Unfortunately, this means that Washingtonians will be required to use less-secure, more-expensive services. As in New York, the future of finance will no longer flourish there.
ShapeShift recently acquired one of the world’s leading hardware wallet companies, KeepKey, which is based in Washington. KeepKey will now be moving its headquarters away from the State permanently. The jobs it has already created and will continue to create will leave with it as well.
We encourage other US states to work with proficient organizations like Coin Center, which understand this technology and the value it brings to society, in drafting more responsible policy.
-The ShapeShift Team
To learn more, visit PleaseProtectConsumers.org.