The relationship between the cryptospace and the New York State Department of Financial Services has always been edgy, with some claiming that New York is hostile towards the cryptocurrency space. Even popular exchanges such as Kraken and ShapeShift have opted to move their operations out of city, owing to its regulatory stance.

The regulatory body requires businesses involved with cryptocurrencies to obtain a license, a BitLicense, sanctioned by the New York State Department of Financial Services [NYDFS], prior to starting its operations in the city. Companies such as Circle, Coinbase, Robinhood, Gemini, Xapa, and Coinsource, are among those that have been successfully conferred the license.

New York’s regulatory body was back in the limelight after news broke out that it had rejected Seattle-based Bittrex’s application for a BitLicense. This development broke after NYDFS granted a BitLicense to Bitstamp, a leading European cryptocurrency exchange.

Shortly after this, the NYDFS released a detailed report about the reasons for rejecting the application, with Bittrex responding to the report soon after. However, the differences in statements were soon highlighted by a Twitter user, @CasPiancey. The social media user tweeted,

“Problems with Bittrex’s response to the NYDFS – either Bittrex or the state of New York is lying or how I learned to stop reading and hate legalese.”

This was followed by the Twitter user listing down four points from both reports, each of which was contradictory to the other. The first was on internal policies, procedures, and controls, while the second point was pertaining to risk assessment. @CasPiancey said,

“1/ Bittrex claims they monitor transactions (I guess with human eyeballs constantly on watch bc they’re still working on the automation process). The NYDFS states that not only were internal policies & procedures inadequate – they’re possibly non-existent”

Statement by NYDFS

Statement by Bittrex

The Twitter user added,

“2/ While Bittrex states they, “maintain a risk assessment framework approved by outside counsel,” that’s not actually an interesting point at all. The NYDFS claims that a “framework” isn’t enough and doing weird sh*t like letting incomplete applications through is a problem.”

The third point was with regard to the exchange’s OFAC compliance procedure, where the regulatory body stated that Bittrex lacked a robust process to keep itself updated with OFAC’s list. To this, the exchange stated that it “screens for SDNs” when a user opens an account, adding that they track all SDN updates from OFAC and check their customers when notified.

@CasPiancey further stated,

“If you watched the Dirty Money episode about HSBC you know this is precisely how money launderers operate – barely alter names 4/ Either you transacted with North Korea or you didn’t, my dudes. There’s no in between. Literally, either New York or Bittrex is lying about this one.”

Frank Chaparro, a reporter for The Block, also agreed with the Twitter user. He remarked,

“Agreed. Either NYDFS is grossly incompetent. Or Bittrex is a shit show with zero controls and a complete lack of understanding about how to run a market.”

The post Bittrex vs NYDFS: Parties make contradictory statements after Bittrex denied BitLicense appeared first on AMBCrypto.

164 +