Most notable, however, was the reasoning the company gave for the abrupt move. It suggested that the changing attitudes of US regulators were to blame for the service shutoff.
“We feel the regulatory environment in the US is becoming increasingly hostile toward Bitcoin, and more specifically toward exchanges trading in digital currencies.”
In the post, Vault of Satoshi spoke out harshly against the Financial Crimes Enforcement Network (FinCEN), which it said has made it “impossible” to run its business in a way that is compliant with regulations.
“We’ve made repeated attempts to comply with FinCEN regulations, but their online form submission process will not allow us to post reports from our headquarters in Ontario, Canada.
They refuse to accept printed paper reports, and their drop-downs don’t include Canadian options, making it impossible to the file the required documentation properly in order to comply.”
Despite repeated attempts to gain clarity from FinCEN on how it could best move ahead with its regulatory compliance in light of these issues, the company said its questions have gone unanswered.
The statements are notable given that fellow exchange CoinTrader recently had its accounts closed by a partner bank in Canada. At the time, CoinTrader cited the worsening regulatory environment in Canada as the impetus for its partner bank’s decision to cut its services.
The high cost of compliance
In addition to the lack of clarity from major regulatory bodies, Vault of Satoshi suggested that the state-by-state requirements for operating an exchange in the US were the biggest roadblocks. The company described setup and compliance costs for this process as “astronomical”.
Yet, Vault of Satoshi didn’t close the door to its US business permanently, saying it will “be exploring re-launching on a state-by-state basis”.
Still, it noted that no timeline for such an action is yet in place.
What’s next for customers
Vault of Satoshi also detailed how service would change for current US-based customers in the post, suggesting they would only be able to conduct coin-to-coin trading, a service that is not yet launched on the site but that will debut in the coming weeks.
US customers that were in the process of being verified will not be able to complete this process. The company did issue a timeline for when customers could expect refunds to be given.
“Any dollars currently in your account will be refunded to you via check, which you should receive within [two to three] weeks’ time.”
Vault of Satoshi was also apologetic to its users for the service setback, suggesting that the decision, while in the best interest of its business, was not made lightly.
“We deeply regret that we can no longer service your cryptocurrency exchange needs, and we’ll do everything we can to re-gain your business and re-launch in your country in the near future, stronger than ever before.”