Bittrex, Inc. (“Bittrex”) is a US-based company that owns and operates one of the world’s largest cryptocurrency exchanges. Bittrex’s digital asset exchange platform allows approximately 1.67 million global users to trade over 200 cryptocurrencies. Bittrex offers two separate platforms, Bittrex and Bittrex International. The former is designed for use by U.S. customers, who are permitted to trade fewer cryptocurrencies than customers on the International platform.
Bittrex applied for a “License to Engage in Virtual Currency Business Activity” (i.e., a “BitLicense”) from the New York Department of Financial Services (“DFS”) on August 10, 2015, and applied to engage in money transmission activity under the New York Banking Law on July 27, 2018. Bittrex, which has approximately 35,000 New York customers, continued to operate in New York under a “safe harbor” exception granted by DFS, which permits applicants to engage in virtual currency business while their applications are pending.
On April 10, 2019, DFS denied Bittrex’s applications and ordered Bittrex to cease operating in New York immediately and to wind down its business in New York within 60 days. In denying Bittrex’s application, DFS stated that Bittrex failed to meet DFS’s licensing requirements primarily due to (1) deficiencies in BSA/AML/OFAC compliance programs; (2) deficiencies in satisfying DFS’ capital requirements; and (3) deficiencies in the due diligence of, and control over, token and product launches. In response, Bittrex stated that it had “worked diligently with NYDFS to address their questions and meet their requirements since first applying for our BitLicense in August of 2015” and “fully disputes the findings of the NYDFS.”