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Bittrex has released an official statement regarding some accounts on the exchange that were flagged by the New York Department for Financial Services (NYDFS). It was alleged on Thursday that some users of the crypto trading platform were based in North Korea.
The state of North Korea continues to face heavy economic sanctions from the U.S. and most other countries worldwide, and this has led it to be one of the most significant sources of bad actors in the crypto space. A small group of North Korean hackers have been identified as being behind most thefts from individual users and crypto exchanges over the last few years, with the funds potentially being used to fund the country's regime.
Last week, the NYDFS pointed out to Bittrex that a few of its users had registered as being located in North Korea. As part of its due diligence and compliance with know-your-customer (KYC) rules, Bittrex decided to investigate the claims. At the start of April, Bittrex was denied a BitLicense by the NYDFS due to deficiencies in these areas, meaning that it was no longer able to operate in the New York state jurisdiction. The company may have been investigating with one eye on re-applying for a BitLicense at some point in the future.
Statement of allegations of North Korean accounts on @BittrexExchange. pic.twitter.com/Ttdb1NpoxM
— Bittrex (@BittrexExchange) April 22, 2019
Bittrex found that the accounts in fact belonged to South Korean users, who had mistakenly clicked the North Korea location option upon registration. This case had in fact already been investigated back in October of 2017.
Best exchange on this shady market now is Bittrex. Top customer support. Hopefully your shiny days will come back soon.
— Robb Stark (@RobbSta19598052) April 22, 2019
Some observers took the opportunity to praise Bittrex as being one of the better exchanges in the space, while others were critical of the NYDFS' policy towards crypto businesses in general, as well as pointing out that this type of KYC restriction would prevent ordinary citizens of North Korea from using crypto and perhaps freeing themselves from state control.
Dude....they've given out all of 10 fucking Bitlicenses in the last 5 years. I would go so far as to suggest that almost all of their licensees are subsidiaries of banks that are already licensed by the NYSE. Nothing but competition control for the old-world bankers......
— Frank Dashwood (@DJ_Erock23) April 22, 2019
People in North Korea should be the first to be allowed to buy crypto easily, they fucking starve and must go through huge troubles to even connect to the real internet.
— BitLife (@mirraxFTC) April 22, 2019