“Land of the Free” is what many called the United States. Indeed, America is one of the freest places on Earth, just not for those in the Bitcoin and broader crypto asset space. Announced late last week, the Seattle-based Bittrex will be blocking its U.S. clients from accessing an array of cryptocurrencies, accentuating that local regulators are looking to or are already cracking down on this embryonic industry.
Bittrex Blocks 32 Crypto Assets
In a blog post published Friday, Bittrex, a well-known regulated crypto exchange centered around altcoins, revealed that it would soon be disallowing users in the United States from trading 32 cryptocurrencies. Although most assets mentioned are not well-known, the list includes QTUM, STORM, GO, and ENG — all popular ICOs during 2017 and 2018’s mania.
By June 21st, the coins mentioned will not be available to be bought or sold through Bittrex, but through Bittrex International instead — the firm’s Europe-based venture that is focused on its non-American clientele.
Users may “withdraw or continue to hold in their Bittrex wallet affected Tokens/Coins for as long as Bittrex International supports a market in those Tokens/Coins.” It is important to note that the post made no mention of direct regulatory pressure from an entity like the United States Securities and Exchange Commission (SEC).
This recent move comes just a week or two after Poloniex, Circle’s fully-fledged cryptocurrency exchange play, made a near-identical move, but for a load of different assets. Per previous reports from Blockonomi, Poloniex blocked the markets for Ardor (ARDR), Bytecoin (BCN), Decred (DCR), Gamecredits (GAME), Neo’s GAS, Lisk (LSK), NXT, OMNI, and Augur’s REP for its American clients.
And in a surprising move, Binance has been required to disallow cryptocurrency traders in the U.S. and over two dozen other nations from accessing the website of its decentralized exchange. Users can still interact through Binance’s blockchain through other means, like wallets and third-party service providers, just not through the official website. The legendary crypto startup may be doing this in response to 2018’s EtherDelta case, during which the Ethereum decentralized exchange’s management was fined tens of thousands for facilitating unregistered securities.
U.S. Regulatory Scene Heating Up
These cases of so-called “geo-blocking” or “geo-fencing”, while not a likely result of direct government oversight, goes to show that the regulatory scene for cryptocurrency in the United States is getting worse. In fact, when Poloniex revealed that it would be delisting the aforementioned coins for its U.S. market, the Goldman Sachs-backed firm wrote:
“Today’s action is a result of regulatory uncertainty in the US market. Specifically, it is not possible to be certain whether US regulators will consider these assets to be securities.”
Indeed, the SEC has begun to encroach on the cryptocurrency space, which was widely untouched by regulators throughout 2017 and early-2018. Just last week, the financial regulator revealed that it would be suing Kik, the Canadian social media firm behind popular $100 million ICO KIN.
The SEC argues that the Canadian firm was running an unregistered securities offering under U.S. federal law. It was even implied that KIN was a ploy to “make a ton of money”, with regulators citing the fact that Kik’s social platform “has never been profitable” and had no intentions to become monetized in any notable fashion.
In a related tidbit of news, the SEC’s Jay Clayton recently doubled down on his skepticism of Bitcoin exchange-traded funds (ETF) in an interview with CNBC. The Chairman stated that he still sees concerns with the custody of BTC and market manipulation of the underlying market, which comes in stark contrast to Bitwise’s assertions that the market is ready.
It isn’t clear where the SEC will strike next, but it seems to be starting with the relatively small fish to then move up the proverbial cryptocurrency food chain.