Bittrex has decided to cease its global operations under intense regulatory pressure. Customers are prompted to withdraw their funds as soon as possible.
UK-based cryptocurrency exchange Bittrex Global announced that it would terminate all trading activity globally, starting from December 4. After that effective date, customers can only withdraw their assets as part of the wind-down process.
“Effective Monday 4 December 2023, all trading activity on Bittrex Global will be terminated. After 4 December, customers will only be able to withdraw. Please log in and withdraw all assets,” according to Bittrex Global’s new update.
Another One Bites The Dust
Upon the termination, Bittrex immediately ceased its referral program and promotions. While the firm did not specify the deadline for asset withdrawal, it encouraged users to withdraw their assets as quickly possible, as liquidators may set the withdrawal deadline in the future.
The firm noted that all customer funds are safe and withdrawable. Bittrex also warned that customers should avoid making deposits on the platform as it could result in permanent loss. Plus, users with USD holdings will need to convert their USD holdings to either EUR or cryptocurrency before they can withdraw them.
Bittrex Global announced that it would end its U.S. operation following the court approval on October 30. It was, however, not a spontaneous move. Earlier in March, the exchange revealed plans to exit the powerhouse market, citing the ongoing regulatory challenges.
Last year, the U.S. Treasury Department held Bittrex accountable for violating sanctions and anti-money laundering (AML) laws. As a result, the firm paid a substantial administrative fine of $29 million.
In May 2023, Bittrex was hit by a legal lawsuit by the U.S. Securities and Exchange Commission (SEC). The exchange promptly agreed to pay $24 million to settle the case.
Kraken, another major cryptocurrency exchange, has faced challenges in the U.S. legal environment. The exchange has been the subject of regulatory scrutiny and legal actions from the U.S. SEC.
Previously, the SEC charged Kraken with offering unregistered securities in the form of its staking service, which allowed users to earn rewards for holding certain cryptocurrencies. Kraken settled the charges by agreeing to pay a $30 million penalty and to cease offering the staking service to U.S. residents.
In a surprising turn of events, the SEC reignited the legal battle with Kraken on November 20, filing a new lawsuit alleging unregistered securities offerings and commingling of customer and corporate funds. Unlike its previous conciliatory approach,
Kraken this time chose to fight back, vehemently denying the SEC’s accusations and pointing to the lack of supporting evidence.
Transition in Crypto Exchange Landscape
Bittrex’s announcement comes in light of Binance’s landmark settlement with the U.S. Department of Justice. As part of the plea deal, Binance founder Changpeng Zhao (CZ) will resign as the firm’s CEO and no longer be able to join the executive board.
With CZ now stepping down, Richard Teng becomes the new CEO of Binance. Many believe that this change in leadership could indeed lead to a shift towards full compliance for Binance. On the other hand, there may be other exchanges that offer more, and don’t have to comply with regulations.
Binance’s new CEO has a strong background in regulatory compliance, having previously served as the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market and the Chief Regulatory Officer of the Singapore Exchange.
In the coming months, it is likely that we will see a consolidation in the cryptocurrency exchange market, with smaller exchanges struggling to compete with larger, more compliant players. We may also see a shift towards more regulation in the industry as governments around the world seek to protect investors and prevent money laundering.