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Bittrex Crypto Exchange Quits US, Citing Unfavorable Regulatory Environment

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Bittrex Unhappy Over Rejection of Bitlicensce Application
Bittrex Unhappy Over Rejection of Bitlicensce Application

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Bittrex, a Seattle-based crypto exchange, has winded down its operations in the United States. This is after the exchange cited the uncertain regulatory environment surrounding its business. However, the exchange’s customers have 30 days to withdraw their assets from the platform. Notably, Bittrex will suspend all trading on April 14. However, the customers have until April 30 to withdraw all their verified balances.

Bittrex was established in 2014 by cybersecurity engineers, including Bill Shihara, Richie Lai, and Rami Kawach. Additionally, the platform co-founder Richie Lai took to his Twitter and noted:

It is not just economically viable to continue to operate in the current United States regulatory and economic environment. Regulatory requirements are often unclear and enforced without appropriate discussion or input, resulting in an uneven competitive landscape. However, operating in the United States is no longer feasible.

Lai further asserted that Bittrex users’ funds remain safe and are available for immediate withdrawal. Noteworthy, the platform team plans to focus on expanding Bittrex Global outside the United States.

 Bittrex Regulatory Struggle

Like any other crypto exchange, Bittrex has also had its share of problems with regulators. In earlier 2019, the New York Department of Financial Services (NYDFS) turned down granting its BitLicense to Bittrex. This came after the regulators cited deficiencies in its AML rules and compliance program, due diligence, and token and product launch control.

Additionally, in October 2022, Bittrex was fined $53 million by the Treasury’s Office of Foreign Assets Control and Financial Crime Enforcement for failure to prevent its customers from sanctioned countries, including Iran, from using the company.

However, Bittrex is among the oldest crypto exchanges in the crypto ecosystem. The platform started operations nine years ago and is ranked among the top 25 centralized exchanges in the market volume. The crypto exchange company is available in over 50 countries. On the other hand, Lai, the company co-founder, stipulated that “the exchange has never lost any funds or hacked before. It was technology, simple and elegant.” Nonetheless, he asserted, ” we said we will be the most secure fair trading platform out here while treating our customers fairly.”

Crypto platforms exiting the US.

Several crypto exchanges have been hit with civil lawsuits over the past month. However, Bittrex is the latest exchange to exit the US. In December, Nexo noted that it was shutting down its operations in the United States due to regulatory issues. Notably, Beaxy winded up its operations after facing charges from the Securities and Exchange Commission (SEC). Additionally, some prominent American exchanges are looking to international markets to dive growth amid the fears of a looming clampdown on crypto businesses in the US.

Earlier last month, the Securities and Exchange Commission (SEC) threatened a potential enforcement action against the US biggest crypto exchange Coinbase. The SEC sent a wells notice to the platform, identifying violations of federal security laws.

Recently, Binance and its CEO Changpeng Zhao were sued by the CTFC late last month, as its acquisition of Voyager assets was put on hold. Notably, a US-based crypto exchange, Kraken, previously settled with the SEC after being charged for not registering under securities laws. The regulators in the United States have increased their scrutiny of crypto companies, speculating that the authorities might be trying to do away with crypto.

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