- Bittrex has had their application for a New York Bitlicense denied
- According to official correspondence, it was due to controversial AML and KYC standards
As Cryptocurrency moves into the mainstream, there have been moves by the government to formally recognize both its legitimacy and the business that surrounds it. One of the ways that this has been done is through the creation and handing out of the Bitlicense.
The Virtual Currency License, or Bitlicense as it is popularly called, is a license given out by the New York Department of Financial Services (NYDFS) to businesses that wish to deal in virtual currency. Having a Bitlicense means that such a business has been examined and given legal right to conduct dealings in the state of New York.
The coveted license has been given out a total of nineteen times so far to firms such as Bitstamp and Robinhood. Unfortunately, it seems Bittrex will not be joining this club for now as the NYDFS has denied their application in an April 10 letter to their CEO.
AML and KYC ‘failures’ to blame
According to the official letter of denial that was given to Bittrex CEO Bill Shihara, the reason for their denial was that the company had failed to meet up to certain standards of the NYDFS. The standards in question are Anti-Money Laundering (AML), Know Your Customer (KYC) and Office of Foreign Assets Control (OFAC) standards.
These have been shown to be very important in the process of receiving approval as the NYDFS has stated that they are adamant about the prevention of crime within thin the digital assets industry.
Four years down the drain
Bittrex’s application has been pending since August 2015 when they first applied and that have been able to operate in the state of New York under ‘safe harbor’ provisions by the NYDFS.
Unfortunately, this must now come to an end as their denial means that they have only until the end of today to cease all operations in the state and another 14 days to send a formal letter to the NYDFS to confirm that they have done so.
The letter also stated that the NYDFS had reached our to Bittrex to “address continued deficiencies and to assist Bittrex in developing appropriate controls and compliance programs commensurate with the evolving nature of the sector.”
While most news regarding the Bitlicense is about those who have successfully passed the assessment process, this is not the case with Bittrex.