Leading cryptocurrency exchange Bittrex is closing its New York business due to the rejection of its BitLicense application by New York Department of Financial Services (NYDFS).
Bittrex customers received an email informing them that all trading activities in New York will cease by close of business today, April 11. Users who reside in New York are advised to withdraw coins by latest June 2019 when accounts will be officially closed.
The NYDFS rejected Bittrex’s application citing failure to demonstrate that it will adhere to proper conduct.
According to the rejection letter, approval of New York’s BitLicense, which allows a company to conduct cryptocurrency-related activities, including operating an exchange, requires an applicant’s ability to demonstrate full compliance with the provisions of the licensing requirements.
“This includes implementing an effective BSA/AML/OFAC compliance program (as well as other measures) to protect customers and the integrity of the virtual currency markets…
Based on the Department’s extensive review of the information submitted and the Department’s recent review of Bittrex’s operations, the Department hereby denies the applications due to the applicant’s failure to demonstrate that it will conduct its business honestly, fairly, equitably, carefully and efficiently within the purposes and intent of the provisions of Title 23 NYCRR Part 200 and Article 13-B of the New York Banking Law, in a manner commanding the confidence and trust of the community.”
Bittrex has issued a public announcement in response, rebutting the claims made by the NYFDS and explaining its position.
“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 and our commitment to regulatory and compliance guidelines is second to none. More specifically, today’s letter contains several factual inaccuracies that we feel must be addressed.”
Bittrex does not believe it was provided with an opportunity to comment on the Department’s findings before they were made public.
Based in Seattle, Bittrex is listed as the 49th largest crypto exchange by trading volume, according to data compiled by CoinMarketCap with 24-hour trading volume of $105.8 million. It has been working on the Universal Protocol Platform with several member organizations. The blockchain coalition is designed to facilitate the seamless, decentralized exchange of tokenized assets on a single blockchain.