A 2019 bill aimed to establish legal definitions for " blockchain” and “ distributed ledger technology.” Senate Bill 5638 also proposed to give the same legal status to documents and signatures "generated, communicated, received, and/or stored using distributed ledger technology" as any other legal document. Regulators recognized that SB 5031 resulted in a blockchain-unfriendly reputation for their state and have moved to remedy that in recent years. The latter released a statement taking issue with being "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." ShapeShift had not long before acquired KeepKey - a Seattle-based hardware wallet manufacturer - but announced that it would be permanently relocating the division and all its jobs out of the Evergreen State. These obligations caused the exit of major exchanges from Washington, including Bitfinex, Kraken, Poloniex, and ShapeShift. In addition to posting a surety bond of up to $250,000, exchanges must undergo third-party audits of their data systems and hold non-tradeable reserves equal to the volume of cryptocurrency maintained as customer deposits. State Bill 5031 - passed in 2017 - defined cryptocurrency exchanges as money transmitter businesses and required them to register as such before operating in the state. The Washington State Department of Financial Institutions describes its mission as "striv to protect businesses and consumers while not unnecessarily impeding the development of new technologies that might improve existing payments systems or create alternative payment systems." While the resulting laws have provided some much needed clarity about the laws applying to the blockchain space, they have also forced out a number of exchanges which find the regulations too onerous. Washington has also taken an active approach to recognizing and regulating Bitcoin and cryptocurrency operations. The presence of these innovative and rapidly growing companies in the state has not been without controversy and a string of well-publicized legal battles in courts, both state and federal. Washington's technology industry in concentrated in the Seattle area, which has launched leading companies like Microsoft and Amazon. Chapter 1 Bitcoin & Cryptocurrency Trading in Washington
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