The New York Department of Financial Services (NYDFS) has denied a BitLicense application from the Bittrex cryptocurrency exchange on April 10.
In a letter to Bittrex CEO Bill Shihara, NYDFS explained that the exchange had inadequate policies and controls regarding Anti-Money Laundering (AML), Know Your Customer (KYC) and Office of Foreign Assets Control (OFAC) standards.
Bittrex applied for its BitLicense — which is required to conduct virtual currency related business in the state of New York — in August, 2015. Bittrex had been operating under the terms of a “safe harbor” permitted by NYDFS while the regulator considered its application.
According to NYDFS, it had issued multiple compliance letters 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.”
NYDFS has ordered Bittrex to cease all business operations in the state of New York by tomorrow, April 11. Bittrex must also submit a letter to NYDFS within 14 days, confirming that they have shuttered operations in the state.
In a press release issued yesterday following the reintroduction of the Token Taxonomy Act in the United States Congress, pro-crypto lawmakers noted the need for policies that would foster innovation in the crypto sector. They also characterized the digital currency policies of some states, like New York, as “onerous” and “heavy-handed.”