Seattle-based cryptocurrency exchange Bittrex has been rejected a much-coveted BitLicense by the New York Department of Financial Services (NYDFS). This is the first snub by the US regulator in two years.
Multiple reasons for the rejection
The exchange received multiple deficiency letters from the US regulator, but there are still some concerns.
‘Throughout Bittrex’s application process, the Department worked steadily with Bittrex to address continued deficiencies and to assist Bittrex in developing appropriate controls and compliance programs commensurate with the evolving nature of the sector,’ states Daniel Sangeap, deputy superintendent and deputy counsel at NYDFS.
In its letter that was published on Apr. 10, the NYDFS explicitly explains why Bittrex didn't get the green light.
Inadequate capital, inadequate due diligence while launching new tokens, and inadequate customer due diligence are among the main reasons why the exchange didn't join the exclusive club of crypto startups that managed to obtain a BitLicense. Speaking of the latter, the examiners found out that a substantial number of aliases, such “Elvis Presley,” “Donald Duck,” “Give me my money”, were used in identifying accounts at Bittrex.
Leaving New York
Getting a BitLicense allows crypto-related companies to operate in the state of New York and do business with its residents. In 14 days, Bittrex is supposed to present. a plan of how it is going to wind up its business with the existing customers that reside in the state.
As reported by U.Today, crypto brokerage Tagomi managed to pass the test, becoming the 18th company to get access to the biggest financial market in the world.