Cryptocurrency exchange Bittrex recently denied its connections with North Korea. It said that the two users mistakenly registered their country as North Korea.
A scuffle over embargoed nations continues
Bittrex confirmed that it is not allowing residents from North Korea and other US embargoed countries to use its services. The Seattle-based company said that the allegations from the New York state regulators that it allowed two North Korean citizens to open accounts on its platform are baseless.
“After reviewing the two alleged accounts provided to us on Thursday, we informed NYDFS that Bittrex had previously investigated these users in Oct. 2017.”
The company has also denied any wrongdoings on the part of their clients and explained that two South Korean residents, who were registering new accounts, mistakenly select North Korea as their country from the dropdown menu. Bittrex confirmed via country identification, physical and IP addresses that the two clients were from South Korea and it was only a small mistake from the users. It added that the platform would be ready for any questions from the authorities.
What does US law suggest?
As per the current laws of the US, financial service providers, including crypto ventures are prohibited from doing business with embargoed countries. This list includes North Korean, Cuba, Syria, Iran and the Crimean region. The businesses are also not allowed to do business with people who had economic sanctions levied on them by the US federal government.
In 2018, Cryptocurrency exchange Bittrex announced its new terms of service according to which citizens or residents of any country, state or territory that is embargoed by the US will not be provided service from the company. The guidelines were issued as many US sanctioned countries were reportedly using digital currencies to evade economic restrictions levied on them. Cryptocurrencies helped these countries circumvent the international financial system, which they were isolated from before. Countries like Russia, Iran, and Venezuela have already revealed plans to launch their own digital currencies.
Bittrex was denied a BitLicense by the New York Department of Financial Services (NYDFS) earlier this month. The authorities claimed that the crypto exchange has insufficient AML rules and compliance program. It also lacked due diligence and control over the product and token launches on the platform. The state regulator said that the exchange did not demonstrate an ability to conduct its business fairly, carefully, efficiently and honestly.