Bittrex fails to get BitLicense in New York State

Posted 11 April, 2019

Within days BitLicense headlines again appeared in the media. The New York Department of Financial Services announced its decision regarding the license application filed by the cryptocurrency exchange Bittrex based in Seattle. This time, the fortune turned away from the platform since it faced a denial.

The company wrote in the statement:

"Bittrex is saddened and disappointed in today’s decision by the New York Department of Financial Services (NYDFS), which we believe harms rather than protects New York customers. "

According to the decision released by NYDFS, it was stated that the company's regulatory compliance policy fails to meet the state requirements. Moreover, the authority commented that the compliance officer seems to have an insufficient qualification.

The State regulator informed the exchange about the policy gaps, including AML compliance, in several notices. However, Bittrex did not pay attention to these issues as NYDFS stated.
In the letter, NYDFS also cited insufficient measures in terms of the Customer Identification Program, Know Your Customer and Customer Due Diligence as it was discovered during the review. It was noted that many transactions on the platform did not have required tax identification number or client's names. Along with these findings, the regulator also mentioned inaccurate addresses or foreign references "without corresponding translations".

With this decision, the exchange has got 14 days to cease all operations in the State as well as draft the plan for suspension of providing services to the residents. Moreover, Bittrex has to "wind down or transfer" funds of New York residents from the safe custody within 60 days beginning from the date of the letter.

At the same time, Bittrex released a statement on its official website as a response to the NYDFS determination. The company opposed this decision adding that such position of the regulator " harms rather than protects New York customers "

"First, and foremost, we adamantly disagree with NYDFS’ claims and allegations in regard to our anti-money laundering (AML) and compliance practices. Corporate responsibility is in our DNA...," stated the company.

The exchange stressed in the statement that the samples provided by NYDFS dates back to 2017, but since then the platform's team updated and boosted its customer identification system, including limited access to accounts that failed to comply with new verification standards.

Bittrex filed an application for cryptocurrency license back in August 2015.

For reference, another American cryptocurrency exchange Bitstamp was luckier and reportedly received BitLicense just a day before.

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11 April, 2019 13:32

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