Bittrex is leaving the United States, Choke Point or no Choke Point, and it’s blaming Uncle Sam. “It’s just not fiscally sustainable for us to continue operating in the current regulatory and economic environment in the United States,” said co-founder and CEO Richie Lai in a statement to customers in the country on Friday. “Regulatory standards are frequently ambiguous and implemented without adequate discussion or consultation, resulting in an uneven competitive field.”
With exchanges such as Coinbase, Kraken, and Binance all receiving legal scrutiny from multiple US regulators in recent months, a growing chorus of industry observers is pushing for regulatory clarification as the issue begins to take on political overtones ahead of an election year. On Thursday, Galaxy Digital CEO Michael Novogratz said the crypto business was “under attack” from US officials and that he believed “Operation Choke Point 2.0,” a name used by some to speculate about the likelihood of a bigger, coordinated crackdown, was real.
Earlier this week, Securities and Exchange Commission Chief Gary Gensler stated that he did not believe the industry required further legislation. According to The Block research director Steven Cheng, while recent regulatory difficulties may have played a factor in the exchange’s decision to leave the country, they are likely not the sole reason. “Their volume in the United States is low enough that it isn’t worth the effort to continue operating,” he said, citing the planform’s bitcoin volume of $4.5 million in the previous 24 hours.
According to The Block data, Bittrex was one of the major exchanges in the United States, with a nearly 23% market share of USD support at the start of 2018. It fell to less than 1% in 2021 and has not recovered since.
The exchange has had its fair share of issues with the country’s regulators. The Office of Foreign Asset Control and the Financial Crimes Enforcement Network announced $29 million settlements with the corporation in 2022 for alleged facilitation of sanctioned transactions between 2014 and 2017. The New York State Department of Financial Services refused the company a BitLicense, which was required to operate in the state, in 2019.
When questioned if the business was attributing all of the lost market share to regulatory issues, a spokesman referred to Lai’s prior remark as well as more FAQ on the subject. Consumers outside of the United States will be unaffected.
According to Lai, all customer monies are secure, and withdrawals for users who have satisfied the verification requirements will be processed until April 30. “Regulatory standards are frequently ambiguous and implemented without adequate debate or participation, resulting in an unfair competition landscape,” he stated, adding that he would move his emphasis to “assisting Bittrex Global in succeeding outside of the United States.”