OkCoin Exchange comes to the United States, but only to Californians

Twitter was all abuzz on Friday when Jason Lau, the Vice President of Business Development tweeted “We’re live in the US! @OKCoin is now serving Californians with more states and tokens to come!”

They are offering deposits and withdrawals in US Dollars (USD) and support trading in Bitcoin, Bitcoin Cash, Litecoin, Ethereum and Ethereum Classic. But, the service is only available to residents of California.

This news is fresh on the heels of San Francisco based Coinbase which announced plans for a Japanese market focus. Their Vice President, Dan Romero, said this will “accelerate the global adoption of cryptocurrency.” According to the Coinbase website, they operate in 33 countries, but Singapore is the only Asian country on the list thanks to its crypto-friendly government.

Does this mean the regulators are finally starting to approve trading applications and licenses for cryptocurrency exchanges?

The answer is unclear.

The journey to California for OkCoin was a long one; they filed a money service business (MSB) registration with the U.S. Financial Crimes Enforcement Network (FinCEN) back in November 2017. The legal entity behind the application is OKCoin USA Inc and is based in Mountain View, California. These are healthy signs however; Li Lin, co-founder and chief executive of Huobi, noted at the time that registering with FinCEN does not resolve all of the possible regulatory issues that come with operating within the U.S.

From our extensive compliance background and research, we share the concerns of Li Lin. In the United States, financial transactions are overseen by bureaucracies that are run by turf-controlling bureaucrats.

What this means is each agency thinks cryptocurrency oversight belongs to them. The SEC thinks every crypto is a security, the CFTC thinks everything is a commodity and money transfer and so on… I think you can get the point.

Knowing the system is the first step in navigating; first and foremost is a unanimous decision on what a utility and security token actually are. The more vague a definition is, the more bureaucrats will try to pull power to their corner.

Bridge Protocol believes that we will see exchanges regulated like banks and financial institutions. There will need to be extensive documentation, flagging of transactions and most importantly; anti-money-laundering (AML) compliance. We have spoken with many large exchanges and they are just starting to think about compliance. The space has evolved very quickly; exchanges try to service their customers and meet constant security threats.

Compliance has been last on their list.

The costs will be massive for compliance, unless other solutions are refined quickly.