Two of the largest bitcoin exchanges have decided to halt services in New York rather than comply with the state’s new licensing requirements.

Kraken and Bitfinex joined a chorus of opposition to the controversial regulation, which requires bitcoin businesses to pay $5,000 for a “Bitlicense.” State regulators had set Monday as the submission deadline.

“While we’re sure that the protection from New York law enforcement is valuable, it comes at a price that exceeds the market opportunity of servicing New York residents,” San Francisco-based Kraken said in a news release. “Therefore, we have no option but to withdraw our service from the state.”

Hong Kong-based Bitfinex said all New York residents must withdraw all bitcoin balances currently held on the exchange by 4 pm EDT on August 15, the company said its website.

“We sincerely apologize for any inconvenience or issue that this may cause,” Bitfinex announced. “We continue to monitor the evolving regulatory landscape in New York and elsewhere in an effort to offer superior service, consumer protection and security, and to remain compliant with applicable laws.”

Besides paying New York a $5,000 fee, bitcoin companies must submit their financial track record, leadership profiles, legal history and plans for running the company in the future – one of the most extensive reporting requirements faced by bitcoin companies anywhere in the world, according to 99Bitcoins.

“While $5,000 might not be much for a major and established firm, it could prove to be an insurmountable barrier for a startup company,” 99Bitcoins said.

CoinDesk reported that more well-capitalized exchanges including Gemini, itBit and Bitstamp have applied for a BitLicense, while smaller businesses including merchant processor GoCoin and altcoin exchange Poloniex have said they would not continue efforts to reach customers in New York.

“We don’t see the entire NY exchange market being worth the costs associated with compliance with the BitLicense, and we sure don’t see the point in bleeding out over a red ocean,” Kraken CEO Jesse Powell told CoinDesk.

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