On March 31, Bittrex announced that it will be ceasing its operations due to the United States’ current “regulatory and economic environment.” Bittrex Global customers outside the US will not be affected, as per their official statement. Users’ funds will remain safe and available for withdrawal at any point during the winding down of US operations.
US Regulations Creating an Uneven Competitive Landscape
Bittrex co-founder Richie Lai mentioned that the US regulatory environment has created an uneven competitive landscape, ultimately impacting the company’s operations despite operating in the country for over nine years.
“Nine years later, the crypto ecosystem is very different. Regulatory requirements are often unclear and enforced without appropriate discussion or input, resulting in an uneven competitive landscape.”
Due to these obstacles, operating in the US is no longer feasible, leading the board of directors to decide on closing operations on April 30. Users must withdraw their funds before April 30. Trading will be permitted until April 14, 2023, for users with KYC requirements met.
“As I mentioned above, all customer funds are safe, here and ready for your retrieval (for users with KYC requirements met). We will permit trading until April 14, 2023, and you should withdraw all your funds by April 30, 2023.”
What is Happening at the Regulatory Level in the US?
Recent months have seen US regulators gradually reducing the flexibility previously granted to exchanges, despite compliance with evolving regulatory norms. This has become problematic for many firms, with some exchanges being forced to shut down or move their headquarters out of the US to avoid fines and unnecessary problems.
The US Securities and Exchange Commission (SEC) issued a Wells notice against Coinbase on possible violations of securities laws concerning its staking services and digital wallet on March 22. In response, Daniel Seifert, Vice President and Regional Director of Coinbase Europe, commented that “the US has left a void that other countries are eager to fill.” Regulators targeting the exchange could lead to it relocating to another country, just like Bittrex.
Binance was the latest exchange targeted by regulators, with the CFTC filing a lawsuit against its CEO, Changpeng Zhao and Binance.com, despite not having its headquarters in the US. This may demonstrate the country’s reach. Gary Gensler, the current head of the SEC, believes that all transactions on the Ethereum blockchain fall under the jurisdiction of the US. He also claims that most cryptocurrencies are securities, which could potentially harm the country’s crypto industry if adopted as common criteria among different regulatory instances.