Cryptocurrency Exchange Cryptsy Responds to CoinFire’s Allegations

By May 4, 2015Bitcoin Business
Click here to view original web page at www.newsbtc.com
Cryptocurrency Exchange Cryptsy Responds to CoinFire’s Allegations

Just by the end of last week, Bitcoin editorial website Coinfire published an article that directly/indirectly accused the cryptocurrency exchange Cryptsy of operating illegally in the majority of US states.

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As reported by Brandon, with additional comments from Advocate Adam Law, the Florida exchange had misinformed their customers about their compliance with laws and regulations, required to run a money service business in US states. It however also reported that the company has obtained a Money Service Business (MSB) license from FinCEN, but is still exposed to varying state laws that requires them to obtain additional permission before beginning to operate. An excerpt from the article:

“A Coin Fire investigation has found that while Cryptsy is fully registered with FinCen to operate a money service business, they lack the appropriate registrations and ability to operate legally in the majority of US states. The MSB registration number 31000061019575 returns to Project Investor Inc., which is doing business as Cryptsy.”

CoinFire further accused Cryptsy of ignoring their requests for comments on their state license numbers and various other issues.

Cryptsy Responds in Public

Project Investors, Inc.’s CEO Paul Vernon however responded publicly to CoinFire — a brand plastering exercise — in which he accused the investigation of being based on false premises. Vernon wrote that their company had never claimed to be fully licensed at state level, but are working towards obtaining MSB licenses which might take years as well.

“There is no company that is fully licensed at the state level in the US.  None,” he stressed.

On ignoring CoinFire’s repeated attempts for obtaining comments, Vernon said:

“Coinfire claims to have tried contacting us, but I’m unsure the method they were attempting.  I’ve not seen anything from them requesting information. Had they asked, we would have told them that we do not have state level licenses – just like anybody else who asks that question.  They certainly would not have had to call state by state requesting information because we would have told them we do not carry state licenses.”

In the latter part of his reply, Vernon reminded the media that Cryptsy was very well following the Federal MSB requirements, while citing multiple programs to comply with the law. They include the periodical submission of Suspicious Activity Reports (SAR) and Currency Transaction Reports (CTR), as well as “an extensive KYC programs in the industry, scrub accounts against the OFAC list, and perform Transaction Monitoring.”

“At a federal level, we are compliant,” Vernon rested his argument.

[Note: Due to being a Bitcoin news website itself, NewsBTC.com is in a typical competition with CoinFire. The article however does not mean to challenge or duel with its friendly counterpart. But it solely focuses on amplifying their investigation among masses.]

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