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One of the leading cryptocurrency exchanges has been denied in their application for a virtual currency license. The New York Department of Financial Services has given the exchange 60 days to leave the state.
The New York Department of Financial Services has officially rejected Bittrex’s application for a virtual currency license, as reported by Reuters. The license was required to operate in the state.
Before the rejection, the exchange was operating under the terms of being a “safe harbor” which is allowed while a company is waiting for confirmation on their license. Now being rejected, the New York regulatory has given the exchange 60 days to close their doors in the state.
Although the Bittrex team was disappointed by the news, the ban only applies to New York State. The exchange is permitted to operate in the rest of the country. As a parting gift, Bittrex said on Twitter that they would be instituting 0% trading fees until they formally leave.
The New York regulatory gave a few reasons why Bittrex failed to receive the virtual currency license.
Firstly, the regulator noted “deficiency in exchange’s capital.” Secondly, the exchange failed to pass certain anti-money laundering requirements. As such, Bittrex could not demonstrate adequately that it was conducting its business fairly.
Another issue was over the Bittrex failing to properly account for customer records. Most transactions were missing tax identificaiton or customer names. In fact, many of the aliases on the exchange had names such as “Donald Duck” and other nonsensical names which raised eyebrows.
It is unclear whether or not Bittrex will reapply for the license in the future.
Why was Gemini able to receive a proper license from NY regulators and Bittrex wasn’t? Let us know your thoughts below.
Image courtesy of Bittrex.