The New York State Department of Financial Services (NYDFS) may be cracking down on exchanges. NYDFS sent a letter to Bittrex concerning its 2015 application to engage in
“Virtual Currency Business Activity.” The letter also contains claims that Bittrex failed to comply with the provisions of licensing requirements, such as “implementing an effective BSA/AML/OFAC compliance program (as well as other measures) to protect customers and the integrity of the virtual currency markets.”
In addition to the letter, NYDFS also made a statement to the media, including CoinDesk. The statements show that the main issue with Bittrex is that the platform may break with a program called the OFCA to detect infringement into sanctions imposed by the federal government against several countries and companies. In addition, there is concern that Bittrex allowed two North Korean accounts on its exchange. The platform responded, stating in part
“There are no users from North Korea trading platform. Bittrex took allegations from New York Department of Financial Services (NYDFS) seriously.”
Another issue is that the platform allegedly shirks responsibility for coins listed on the exchange. The entire letter can be read in one of the links listed above.
“At its core, the New York DFS is overstepping its regulatory authority and changing rules and guidelines on the fly. The sheer fact of the matter is that, despite all of the supposed concerns the NY DFS has claimed, it was willing to agree to a supervisory agreement with Bittrex and grant a BitLicense in January 2019.”
The CoinDesk article and Bittrex’s response can be read here.