“Failure to meet the licensing requirements of DFS, primarily due to deficiencies in Bittrex’s BSA/AML/OFAC compliance program; deficiency in meeting the Department’s capital requirement; and deficient due diligence and control over Bittrex’s token and product launches.”
Bittrex said they “fully dispute” the findings of NY’s DFS and have worked with them to meet all requirements since first applying for the BitLicense all the way back in 2015. In an e-mail to their customers, they said they are leaving New York:
Bittrex apparently begun Initial Exchange Offerings (IEOs), but last month they canceled the first such IEO on their platform with the exchange seemingly not actually carrying out any such IEO as far as we can see.
The status of IEOs within US, especially in regards to crowdfunding exemptions, is currently unclear, but this might be the main reason for the denial.
There are also suggestions that individuals were able to sign up for trading on the platform with names like Donald Duck, Elvis Presley, and other “clearly false names” according to a statement by DFS.
Bittrex strongly denied DFS’s statements, saying in a somewhat detailed reply:
“Sample included by NYDFS was taken from 2017. Since then, we have mandated full customer identification, including the requirement that all customers submit government-issued ID and a ‘selfie’ which is then compared against the ID to ensure a match; we have disabled all accounts not meeting this enhanced verification standard. This is the industry standard not only in virtual currency but also in traditional banking .
The letter mentions accounts with names that did not match. There were less than a dozen of these names in total and none of these accounts were ever active and none of these accounts ever made a trade. The fact that these accounts were unable to trade demonstrates the effectiveness of our diligence process, rather than a deficiency as NYDFS alleges.”eval(ez_write_tag([[300,250],'trustnodes_com-medrectangle-4','ezslot_0',144,'0']));
Making it quite unclear just what exactly is going on here, but apparently Bittrex had only 35,000 customers in New York out of 1.7 million.