US cryptocurrency exchange Bittrex, which was a leader in the US market, had an unhappy end and closed its doors in the country after shrinking its volume by around 99%. Now experts disagree about the real reasons for this crash while Bittrex blames it on regulatory uncertainty.
Bittrex announces its departure from the United States of America due to unfair regulation
In a letter to US exchange clients, Richie Lai, co-founder of Bittrex and CEO of its US subsidiary, announced that cryptocurrency exchange Bittrex, which was founded in 2014 by three Amazon graduates, has decided to pull out and exit the US market.
“Today, Bittrex has begun the process of winding down its US operations. Don’t worry, all customer funds are safe and available for withdrawal. However, it is not economically feasible for us to continue operating in the current US regulatory and economic environment.”
Richie Lai – co-founder of Bittrex and CEO of its US branch –
With crypto and digital currency exchanges like Coinbase (NASDAQ:COIN), Kraken and Binance coming under legal scrutiny from several US regulators in recent months. Industry watchers are increasingly demanding regulatory clarity. Where regulatory requirements appear to be insufficiently clear and inappropriately imposed without discussion.
Richie Lai justified the withdrawal of Bittrex from US soil by regulatory obstacles and lack of clarity in the regulations. Where he added:
“Nine years later, the crypto ecosystem is very different. Regulatory requirements are often unclear and imposed without proper discussion or input, leading to an uneven competitive landscape. We have made great strides towards maturing the crypto space. However, the business is no longer in US as possible and we will focus on helping Bittrex succeed outside the US.”
Excerpt from Richie Lai’s letter
Some players in the crypto sector believe that the cryptocurrency industry is under fierce attack from US regulators. And that there is a broad and coordinated campaign to eliminate or completely centralize digital assets.
The exchange also said that all customer funds are safe and ready to be refunded to users who have met verification requirements. Trading will be closed on April 14, 2023, and US clients must withdraw all their funds by April 30, 2023.
What are the reasons behind Bittrex’s decision to leave the US?
Although recent regulatory issues and fear of exposure to regulators may have played a pivotal role in the exchange’s decision to leave the US soil. But that may not be the only reason, according to some analysts and stock exchange data.
In 2013, Richie Lai, Bill Shihara and Rami Kawach founded Bittrex, it was all about technology. The Amazon (NASDAQ:AMZN) graduating trio built API technology that was ahead of everyone else at the time. And they provided the best offline cold wallet solutions. Their exchange was never hacked.
Bittrex was one of the largest exchanges in the United States. The market share of USD support was nearly 23% at the beginning of 2018. But it collapsed to less than 1% in 2021 and has not recovered since.
The size of the stock market has also diminished significantly in the United States. So that it is no longer worth the effort to continue maintaining operations. While the platform’s bitcoin volume does not exceed $4.5 million only in the past 24 hours.
However, the platform did not link its dwindling size and stagnant operations to its decision to exit the United States. And when Richie was asked if the company attributed all the lost market share to regulatory problems, that this issue would not have repercussions on the global stock market!.
The exchange has also had its share of disputes with regulators in the United States. In 2022, OFAC and the Financial Crimes Enforcement Network announced settlements of $29 million with the exchange over its alleged facilitation of sanctionable transactions between 2014 and 2017.
In your opinion, did the regulatory tightening in the USA cause the Bittrex market to shrink by around 99%? Share your opinion and discuss the other opinion on our Arabic channel on Telegram.