Bittrex fails to obtain BitLicense, New York regulators cite poor internal controls

According to NYDFS, Bittrex failed to demonstrate compliance with the state's financial regulations and lack of a consistent set of criteria for making token listing decisions.

The agency claimed that it had issued Bittrex with "Several deficiency letters" from the start of the multi-year application.

The NYDFS also accused Bittrex of "Lacking adequate due diligence in launching tokens or products." The statement revealed that some coins were listed despite not having the necessary paperwork, which is at odds with the exchange's own listing policy.

In at least one case, the agency found that a token was listed on Bittrex without having a listing application on file.

Some experts within the crypto community are outraged by the rejection, especially considering Bittrex has a reputation as a more "Conservative" cryptocurrency exchange in terms of compliance.

Bittrex has been waiting for a license from NYDFS for 3.5 years!!! New Yorkers, why do you tolerate this agency? "Bittrex Statement on the New York Department of Financial Services Decision" https://t.

The exchange also contested the terms of a supervisory agreement put forward by the regulator which would only allow Bittrex to offer 10 cryptocurrencies out of its current 200 plus listings.

Bittrex claims the agreement would have caused material damage to the exchange's basic business model.

"This would have prohibited Bittrex from listing coins that are offered to New York residents by other BitLicensees. NYDFS reserved the right to order us to withdraw coins at any time. Additionally, DFS would be able to prohibit offering tokens to NY residents, even if other NY BitLicense holders were able to offer the tokens."

Following the rejection, Bittrex now has 14 days to demonstrate to NYDFS that it has fully ended all operations in New York-which cannot be appealed.