NYC Regulators To Not Provide Crypto License To Bittrex
The New York State Department of Financial Services (NYDFS) has refused to issue a license for working with digital assets to the American Bittrex exchange. The department motivated its decision by the fact that the company does not comply with legal requirements, and the top manager of the exchange is not competent enough.
A letter, addressed to Bittrex head Bill Shihara, has been published on the NYDFS website. It identified the shortcomings of the exchange, which included noncompliance with the norms of countering money laundering, inexperience of employees, incorrect procedure for verifying tokens when listing them, and so on.
In particular, the department drew attention to the lack of due diligence measures and the fact that most of the transactions did not provide important tax information and real user names. Regulators assume that the exchange easily allowed for transactions of shady customers who could be on the sanction list. For example, several users logged in under obviously false names of Elvis Presley and Donald Duck.
According to the regulator, the exchange ignored the comments and did not correct its mistakes. Therefore, the NYDFS ordered the platform to shut down all operations in New York State within 14 days. Besides, Bittrex should return all traders from this jurisdiction their funds that are in the custodial vault within the next 60 days.
Bittrex representatives disagree with the NYDFS accusations. They stated that the situation with shady users refers to 2017. Since then, the verification system has been improved, they added.
In addition, the New York City Authority allowed the exchange to offer only 10 cryptocurrencies to state residents. Considering that over 200 positions are traded on Bittrex, the company rejected such conditions.
Previously, Bitstamp, one of the largest bitcoin exchanges in Europe, received a license.