United States-based cryptocurrency exchange Bittrex has responded to the New York Department of Financial Services’ (NYDFS) denial of the company's BitLicense application in a press release published on April 10.

Earlier today, NYDFS denied Bittrex’s application for a BitLicense — which is required to conduct virtual currency related business in the state of New York — claiming that the exchange had inadequate policies and controls regarding Anti-Money Laundering (AML), Know Your Customer (KYC) and the Office of Foreign Assets Control (OFAC) standards.

In its response, Bittrex expressed its disappointment in the NYDFS’ decision and argued that it the regulation “harms rather than protects New York customers.” The exchange also explained its disagreement with NYDFS’ claims in regard to its AML and compliance practices.

Bittrex states that it “maintains a risk assessment framework, approved by outside counsel, and fully trains all company employees in its AML policies and procedures.” The exchange also stated that it “screens for SDNs [specially designated nationals] when a customer opens an account, and tracks all SDN updates from OFAC, checking our customer upon notice…”

Additionally, Bittrex stated out that NYDFS set up capitalization requirements that exceeded those of any other state. Those requirements were ostensibly based upon a pre-existing formula of hot wallet versus cold wallet storage, not taking into consideration the range of coins listed by Bittrex and ignoring the risks of frequently moving assets from hot to cold storage.

Bittrex claimed in the release that it offered a bond to cover the whole capitalization of all New York clients, but that was rejected. The exchange also outlined that the letter from NYDFS contained several factual inaccuracies in respect to the implementation of transaction monitoring, risk assessment framework, and checking customers, among others.

Currently, Bittrex is ranked 54th on CoinMarketCap’s list of digital currency exchanges in terms of adjusted trading volume. The exchange’s 24-hour trading volume is around $63.5 million at press time, having gained almost 6 percent over the past 24 hours.