The United States-based cryptocurrency exchange Bittrex tweeted on April 22 that claims of North Koreans using its platform to trade in cryptocurrencies were false. The exchange stated that the regulators in New York had made mistakenly identified two of its users as North Koreans.
NYDFS Claims North Korean Users on Bittrex
Earlier this month, the NYDFS (New York Department of Financial Services) had denied Bittrex’s application for a BitLicense on grounds that the exchange had inadequate policies as well as controls in place with regard to AML (Anti-Money Laundering), KYC (Know Your Customer) and OFAC (Office of Foreign Assets Control).
The NYDFS also stated that it had sent Bittrex numerous compliance letters, asking the exchange to address deficiencies in these areas. The regulator also said that it had told the exchange that it would help it develop appropriate controls as well as compliance programs corresponding to the continuously evolving nature of the cryptocurrency industry.
The agency then flagged off 2 users’ accounts that it claimed belonged to people who were residents of North Korea. This country is sanctioned by the NYDFS.
According to the agency’s executive superintendent for banking, Shirin Emami, when the regulator’s examiners checked a sample of the cryptocurrency exchange’s user base, two accounts had been identified as based out of North Korea.
Emami also said that more such accounts could exist. She said that at least one North Korea-based account had been active in 2017 and that the agency had also found two accounts from another sanctioned country – Iran – that had been active this year.
Bittrex’s Response to the Regulator
The same day that the agency made these accusations, Bittrex issued its rebuttal. The exchange stated that it did not have any accounts from either Iran or North Korea in 2019.
The exchange explained that it had investigated the same two users in October of 2017. Bittrex stated that the two users were residents of South Korea who had selected North Korea from the exchange’s drop-down menu by mistake.
Bittrex said that in its investigation of the two users, it found that their country identification and physical as well as IP addresses showed that they were from South Korea.
A Bittrex spokesperson also said that the company did not have anything to add with regard to the accounts allegedly based out of Iran.
The NYDFS spokesperson did not respond for requests for comments.