New York rejects Bittrex Bitlicense application

New York

According to the press, the New York Department of Financial Services (NYDFS) decided to reject the BitLicense application from the Bittrex exchange.

According to the New York Tax Office’s official report sent to Bittrex CEO Bill Shihare, New York, Bittrex Bitlicense rejects the lack of stock exchange policies and controls against AML, Know Your Customer (KYC), and Office of Foreign Asset Control (OFAC) ). Bittrex ranked 54th in the CoinMarketCap list of digital currency exchanges in terms of adjusted trading volume.

The Bittrex case in brief
BitLicense is a set of regulations submitted by the Treasury Department of New York State, which is necessary to run a cryptographic business in a state that serves New Yorkers (NY).

Bittrex applied for BitLicense in August 2015. The exchange was under “safe harbor” conditions allowed by NYDFS, while the regulator considered its application. According to NYDFS, Bittrex has issued many compliance letters “to address the remaining gaps and help Bittrex develop appropriate control and compliance programs for the evolving nature of the industry”.

Bittrex Reactions to New York Decisions
Bittrex again expressed disappointment at the NYDFS decision and said the regulation “harms rather than protecting New York customers”. The exchange also explained its disagreement with NYDFS’s AML claims and its compliance practices.

Following the NYDFS decision, the cryptographic trading platform has stated that “it supports the risk assessment framework endorsed by a third-party consultant and fully trains all company employees in its AML policies and procedures.” and tracking all SDN OFN updates, checking clients after notification. ”

The standards in New York have been exceeded
Bittrex added that NYDFS sets capitalization requirements that exceed the requirements of any other state. These allegations were allegedly based on an existing hot wallet and cold wallet storage formula, regardless of the Bittrex coin range and ignoring the risk of frequent asset shifts from hot to cold storage.

In a press release, Bittrex said the NYDFS letter contains a number of factual inaccuracies that include, among other things, conducting transaction monitoring, risk assessment systems, and customer verification.

Is New York a cryptographic policy too strict?
NYDFS decided that Bittrex should stop all New York business operations by the end of April. Bittrex must also send a letter to NY NYO within 14 days to confirm that they have completed their state operations.

In a press release, following the reintroduction of the Tokens of Credit Act in the US Congress, legislators advocating digital assets have noted the need for policies that support innovation in the cryptographic sector. It is worth noting that in some states they have also referred to digital currency policies, including New York, as “burdensome” and “hard”.


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