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Bittrex Leverages Chainalysis KYT Tool to Enhance Security and Regulation Compliance

Cryptocurrency exchange Bittrex will use Chainalysis Know Your Transaction (KYT) to meet new and existing regulatory and compliance standards, and establish a safer, more secure platform for their users.

Yesterday, Chainalysis Inc. announced the deployment of its real-time transaction monitoring software solution to the US-based blockchain trading platform Bittrex.

Enhanced Compliance

Chainalysis KYT software enhances the compliance and transparency of cryptocurrency exchanges, like Bittrex, by monitoring large volumes of cryptocurrency activity and identifying high-risk transactions on a continuous basis, feeding the exchange more accurate data on each of their users. By leveraging the software, businesses can identify transactions that require the most immediate attention utilizing real-time data with alerts and filters for levels of risk exposure.

“As our business continues to grow, having a thorough and reliable transaction monitoring system in place is crucial in demonstrating our commitment to compliance,” said Bill Shihara, CEO, Bittrex. “Chainalysis KYT is an important tool in having an effective anti-money laundering program by helping us prevent, detect, and address unlawful behavior.”Earlier this year, Chainalysis expanded Chainalysis KYT, its anti-money laundering (AML) compliance solution, to cover the most popular cryptocurrencies, including Ether, Bitcoin Cash, Litecoin, top stablecoins and ERC-20 tokens such as Tether, Maker, and Dai, with additional cryptocurrencies coming soon.

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Bittrex Exchange Halts Services In 31 Countries Due To Regulatory Risk

Bittrex, a U.S-based blockchain platform that provides real-time trade execution, dependable digital wallets, and industry-leading security practices, has just recently announced the shutdown of operations in 31 countries of the world. These countries were not just suspended but to be blocked owing to crypto regulatory uncertainty. This implies that the customers from these restricted countries can no longer access the Bittrex platform.

The below list comprises of the affected countries:

Afghanistan, Egypt, Bosnia-Herzegovina, Botswana, Cambodia, Central African Republic, Democratic Republic of the Congo, Côte d’Ivoire, Ethiopia, Eritrea, Ghana, Guinea, Guinea-Bissau, Guyana, Iraq, Laos, Lebanon, Libya, Maldives, Pakistan, Sri Lanka, Somalia, Sudan, South Sudan, Trinidad and Tobago, Tunisia, Uganda, Vanuatu, Venezuela, Yemen and Zimbabwe.

Since all account access and trading for the customers from these concerned countries will be closed on Tuesday, October 29 date at 19:00 UTC/21:00 CEST, the management warns them to withdraw all their coins and tokens before the said date. However, if your balance is not up to the minimum withdrawal amount for the wallet, you will be unable to withdraw it.

The report stresses that the minimum withdrawal for all coins in the platform must be higher than the fee by three times.

The report also says that all the concerned customers should reach out to Bittrex Customer Support if they ever need additional assistance. The customers can reach the Bittrex customer support by submitting a request in the right corner of the support interface or by connecting with Bittrex agent using the live chat.

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Poloniex and Bittrex Added to Ongoing Class-Action Lawsuit Facing Tether and Bitfinex Over Bitcoin Price Manipulation

US cryptocurrency exchanges Bittrex and Poloniex have been added to a class-action lawsuit that alleges billions of unbacked Tether stablecoin were used to manipulate Bitcoin price.

The two US exchanges have been added as defendants in an ongoing lawsuit against Tether and Bitfinex. Poloniex and Bittrex have been summoned to appear to the court because of their alleged involvement in the manipulation of Bitcoin price during the bull run in 2017.

No place to hide

Although in the initial lawsuit only Tether and its sister cryptocurrency exchange Bitfinex were named, the plaintiffs now added two more crypto exchanges in the updated lawsuit submitted on June 3.

On June 3, the court document was amended to add crypto exchanges Poloniex and Bittrex to the list of defendants. The amended court lawsuit alleges that Bittrex and Poloniex aided in the purchase of Bitcoin using billions of unbacked Tethers.

The plaintiffs, who dragged Tether and Bitfinex to court in October 2019 for artificially inflating Bitcoin price, are the ones who made the current filing on June 3.

The lawsuit claims that Tether issued billions of its USDT stablecoins without backing them with the US dollar and bought Bitcoin from the spot market, therefore pushing the demand of the leading cryptocurrency.

The lawsuit reports that Tether and Bitfinex manipulated the prices of Bitcoin all the way to its an all-time high of $20,000 in December 2017. The plaintiffs claim that Tether issued billions of its USDt stablecoins to itself out of thin air that it then moved to crypto exchange Bitfinex, which purposely used those USDT to buy and inflate Bitcoin price between 2016 and 2017. Tether and Bitfinex are sister companies. The two companies share executive management.

The plaintiffs claim that Bitcoin’s bull and its consequent crash would never have occurred if it were not for manipulation using Tether.

The plaintiffs, named as Pinchas Goldshtein, Aaron Leibowitz, Jason Leibowitz, Benjamin Leibowitz, and Matthew Script, are all US citizens who bought various cryptocurrencies during the time in question. These investors claimed to have suffered economic losses because of Bitfinex and Tether market manipulation. They are seeking reparations for losses they incurred when the Bitcoin bull finally crashed.

After the Bitcoin price reached a peak value of $20,000, it began nosediving. Bitcoin then continued losing 84% of its value by 2018 December, declining to a low of $3,191. Consequently, the rest of the crypto market followed, with several cryptocurrencies losing more than 95% of their value, and since then several have never recovered.

Has judgement final come for 2017 ICOs? Class-action lawsuits name hosts of crypto defendants

Bitfinex and Tether have been at the center of USDT controversy associated with market manipulation. In November 2019, another lawsuit dragged the two companies to court for Bitcoin price manipulation. But the two firms defended themselves and dismissed the class-lawsuit as “ridiculous” allegations.

Meanwhile, several major cryptocurrency exchanges are also facing class-action lawsuits for multiple reasons. In April this year, BitMEX, Binance, Block.One, and others were named in 11 class-action lawsuits filed in the United States alleging them for misleading investors into purchasing unregistered assets and violating federal securities laws. It remains to see how the rule of law will take its course.

Privacy Coins Monero, Dash, and Zcash to be Delisted on Bittrex, Dash Unhappy with Decision

Bittrex will be removing privacy coins Monero, Dash, and Zcash from its trading platform soon.

The announcement explained that effective on January 15, 2021, Dash, Grin, Monero, and Zcash trading pairs will be removed from the platform. Although no further explanations have been given by the cryptocurrency exchange to justify the delisting, many have hypothesized that this may be a move to ensure that the trading platform is compliant with cryptocurrency regulations, such as know-your-customer (KYC) and anti-money laundering (AML) policies.

Bittrex may have opted to play on the safe side, with regulators increasingly seeking to investigate privacy coins and their involvement in cybercrime. Privacy coins have long been attractive to criminals for their ability to obfuscate transactions, the amount sent digitally, the wallet address, and the identity of both the sender and the receiver.

Dash bites back

Upon the announcement that Bittrex will delist it, Dash has however commented and claimed that its privacy coin was no more private than the biggest cryptocurrency by market cap, Bitcoin. Through its official account, Dash tweeted:

“From a technical standpoint, Dash’s privacy functionality is no greater than Bitcoin’s, making the label of ‘privacy coin’ a misnomer for Dash. We have reached out to @BittrexExchange to request a meeting with their compliance team. Hopefully this will be rectified soon.”

Crypto regulations in the US tightens

Bittrex’s decision to delist privacy coins comes at a time when the cryptocurrency industry has increasingly been scrutinized by lawmakers struggling to regulate such a budding and dynamic sector. The US Treasury Department has recently issued an announcement proposing new KYC guidelines for cryptocurrency transactions.

The Financial Crimes Enforcement Network (FinCEN) has suggested that unhosted wallets should be monitored and cryptocurrency transactions should be compliant with traditional AML laws for fiat.

Exchanges in the US may be looking to avoid sanctions, especially now, as a critical eye has increasingly been directed towards the crypto sector. Recently, the Securities and Exchange Commission made a bold move and slapped Ripple with a lawsuit for selling unregistered securities through XRP. The lawsuit was enough to make XRP’s price drastically plummet, sending the cryptocurrency’s market value down by more than 50%.

US Treasury Fines Bittrex Exchange $29m for Multi-Year Sanctions Violation

Washington-based cryptocurrency trading platform, Bittrex Has been fined the sum of $29 million by the United States Treasury Department through the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN).

The fone, tagged as the single largest levied by the OFAC on a digital currency trading platform, became necessary, considering Bittrex failed to implement adequate compliance programs, thus helping some of its users to evade established sanctions.

According to the OFAC announcement, the trading platform “failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its platform to engage in approximately $263,451,600.13 worth of virtual currency-related transactions between March 2014 and December 2017.”

The regulator noted that preventing these banned users would have been easy if the exchange prevented their registration based on their IP addresses at the point of registration. The FinCEN violation involved failure on the part of the trading platform to institute appropriate Anti-Money Laundering (AML) measures, thus creating a weak channel for the laundering of illicit financial proceeds.

“When virtual currency firms fail to implement effective sanctions compliance controls, including screening customers located in sanctioned jurisdictions, they can become a vehicle for illicit actors that threaten U.S national security,” said OFAC Director Andrea Gacki. “Virtual currency exchanges operating worldwide should understand both who—and where—their customers are. OFAC will continue to hold accountable firms, in the virtual currency industry and elsewhere, whose failure to implement appropriate controls leads to sanctions violations.”

The US Treasury has been more alive towards cryptocurrency service providers all year long, first coming into the limelight in May when it banned crypto mixer, Blender.io and subsequently when it added Tornado Cash to its list.

While the industry made no fuss about the Blender ban, that of Tornado Cash has been received with so many objections, all of which have spurred industry giants like Coinbase Global Inc to fund targeted lawsuits and advocacy stunts.

Crypto Firms Make Job Cuts Amidst Ongoing Crypto Winter

This week, many cryptocurrency companies have eliminated jobs in response to the current crypto winter. However, these companies have chosen to keep “impactful” people on staff as they prepare for a “longer slump.”

At least 216 jobs were cut across three different cryptocurrency companies. These companies are open-source software laboratory Protocol Labs, blockchain data firm Chainalysis, and cryptocurrency exchange Bittrex. Each of these companies reduced their workforce by 89, 83, and 44 employees, respectively.

In a blog post dated February 3, Juan Benet, CEO of Protocol Labs, the firm that introduced Filecoin (FIL), said that the company will be cutting jobs because it needed to concentrate its workforce “against the most impactful and business-critical projects.”

He claimed that the firm had come to the conclusion that it was in the best position to “weather this protracted winter” by eliminating “89 jobs,” which is equivalent to around 21% of its staff.

Given that the cryptocurrency business is now experiencing “very tough” conditions, Benet said that the firm should “plan for a lengthier slump.”

Meanwhile, on February 1, Bittrex CEO Richie Lai emailed the firm’s workers to notify them that the company would be reducing its employment in order to “maintain the long-term health” of the business.

On February 2, the email was shared inappropriately on Twitter. Lai claimed that despite the fact that the leadership team has been “working vigorously” over the last several months to decrease expenditures and boost efficiency, the efforts have not achieved the “results required.” Lai added that the efforts have not delivered the “results necessary.”

Lai went on to say that the current state of the market necessitated a reevaluation of the company’s approach and a readjustment of its “investments with the new economic climate.”

On February 2, 2018, records pertaining to employment in the state of Washington indicated that Bittrex had eliminated 83 positions.

According to statements made by Maddie Kennedy, director of communications at Chainalysis, to Forbes on February 1, the firm let off 44 of its 900 workers, which represents around 4.8% of the workforce. Kennedy said that those who were let go were “mainly in sales” at the company.

The announcement of these layoffs follows reports that in January, at least 2,900 employees were let go across 14 different cryptocurrency organisations.

Among those companies, Coinbase saw the most personnel reductions, with 950 employees losing their jobs on January 10th.

During this time, rival cryptocurrency exchanges Crypto.com, Luno, and Huobi each laid off about 500 employees, 330 employees, and 320 employees, respectively.

Bittrex to Shut Down U.S. Platform

Cryptocurrency exchange Bittrex will close its U.S. platform on April 30, according to an announcement from the company on Friday. After nine years of operation, Bittrex co-founder and CEO Ritchie Lai stated that the current U.S. regulatory and economic environment made it “economically unviable” for the exchange to continue operating in the country.

Lai cited unclear regulatory requirements that are enforced without appropriate discussion or input, resulting in an uneven competitive landscape as the reasons behind the closure. He added that operating in the U.S. was no longer feasible for Bittrex.

Despite the shutdown of its U.S. platform, Lai assured customers that all their funds are safe and available for withdrawal. The closure will not affect Bittrex Global, which operates in Europe, Canada, and South America, among other locales, and will remain open for trading.

Bittrex’s decision to shut down its U.S. platform is not the first time a crypto exchange has faced regulatory hurdles. In recent weeks and months, U.S. regulators have increased their oversight of crypto-related companies. Coinbase recently disclosed receiving a Wells Notice from the U.S. Securities and Exchange Commission (SEC), while Kraken paid a $30 million fine in a settlement with the same agency after shuttering its crypto staking service.

Binance and its CEO and founder Changpeng Zhao were also recently named in a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC). The complaint alleges the offering of unregistered crypto derivatives products in the U.S.

The crypto industry has been grappling with regulatory challenges in the U.S., with some companies choosing to exit the market altogether. However, other companies, like Bittrex Global, continue to operate and expand their reach in other parts of the world.

Bittrex Global operates in over 100 countries and recently launched a new platform for institutional investors. The exchange’s closure of its U.S. platform may be a strategic decision to focus on expanding its operations elsewhere.

The crypto industry is still in its early stages, and regulatory challenges are expected to persist. The industry’s stakeholders will need to work with regulators to find a balance between innovation and compliance to ensure the healthy growth of the industry.

Bittrex to Wind Down US Operations

Cryptocurrency exchange Bittrex has announced that it will be winding down its operations in the United States due to a challenging regulatory and economic environment. The company’s co-founder and CEO, Richie Lai, stated that as the cryptocurrency ecosystem evolved, regulatory requirements have become increasingly “unclear” and “enforced, without appropriate discussion or input,” leading to an uneven competitive landscape. This environment has made it economically unviable for Bittrex to continue its operations in the United States.

Founded in 2014 by three cybersecurity engineers, Bittrex offered features such as a full-service API, near-instant atomic transactions, wallet infrastructure, and offline cold wallet solutions. However, the winding down of Bittrex’s US operations is a reminder of the challenges faced by cryptocurrency businesses navigating an uncertain regulatory environment.

The company’s founders have decided to focus on helping Bittrex Global succeed outside the United States. Bittrex clarified that US customers do not have to worry about the safety of their funds, as all of their capital is safe and available for withdrawal. The platform shared that it will permit trading until April 14, 2023, but advised customers to withdraw all funds by April 30, 2023.

Bittrex’s decision to wind down its US operations is not an isolated incident. On March 3, Ripple CEO Brad Garlinghouse warned that the Securities and Exchange Commission’s regulatory approach puts the US at “severe risk” of missing out on being an attractive hub for the next evolution of blockchain and crypto innovation. In a Bloomberg interview, Garlinghouse suggested that the crypto industry has “already started moving outside” of the US because the country’s crypto regulation is “behind” other nations like Australia, Japan, the United Kingdom, Singapore, and Switzerland.

The regulatory environment for cryptocurrencies in the US has been a subject of debate and discussion for some time. While some states, such as Wyoming, have taken a more lenient approach to cryptocurrency regulation, others have been more restrictive. In addition, the Securities and Exchange Commission (SEC) has been criticized for its lack of clarity regarding which cryptocurrencies qualify as securities and which do not. This lack of clarity has resulted in several high-profile legal battles between the SEC and cryptocurrency companies.

Despite these challenges, the cryptocurrency industry continues to grow and evolve. While Bittrex may be winding down its US operations, other exchanges and companies are likely to step in to fill the void. It remains to be seen how the regulatory environment for cryptocurrencies will evolve in the coming years, but one thing is clear: the demand for cryptocurrencies and blockchain technology shows no signs of slowing down.

Bittrex Faces Potential Legal Action from US SEC

The US Securities and Exchange Commission’s (SEC) enforcement division is reportedly considering recommending legal action against Bittrex, a Seattle-based cryptocurrency exchange, over alleged violations related to investor protection. Bittrex’s general counsel, David Maria, confirmed that the enforcement unit had notified the company about the potential action in March. By that time, Bittrex had already begun the process of winding down its US operations.

The SEC’s notice of potential enforcement action, also known as a Wells notice, stated that Bittrex had violated laws by operating as an exchange, broker-dealer, and clearinghouse without registering with the regulator. In late 2022, Bittrex reportedly discussed with the SEC how to register its operations but found that there was no opportunity to comply with the SEC’s rules without essentially ceasing all of its revenue-producing activities in the country.

Bittrex has been operating in the US since 2014 and has been one of the larger cryptocurrency exchanges in the country. The exchange has faced regulatory scrutiny in the past, including in 2018 when it was denied a license to operate in the state of New York.

The SEC’s potential legal action against Bittrex comes amid increasing regulatory scrutiny of the cryptocurrency industry in the US. The SEC has been actively targeting cryptocurrency exchanges and other players in the industry for non-compliance with securities laws and regulations.

Many in the cryptocurrency industry have called for clearer regulatory guidelines to provide more certainty and stability to the market. The lack of regulatory clarity has been cited as a barrier to institutional adoption of cryptocurrencies, which some believe could help to legitimize the industry and bring in more investment.

In response to the potential legal action from the SEC, Bittrex has said that it is committed to complying with all applicable laws and regulations and that it has been working with regulators to ensure compliance. The exchange has also stated that it will continue to operate in other jurisdictions outside of the US.

In conclusion, the potential legal action from the SEC against Bittrex underscores the increasing regulatory scrutiny of the cryptocurrency industry in the US. While many in the industry have called for clearer guidelines, regulators are taking a more active approach to enforcement, which could have significant implications for the industry going forward. Bittrex’s decision to wind down its US operations highlights the challenges faced by cryptocurrency exchanges in navigating the complex and evolving regulatory landscape.

SEC Charges Bittrex for Unregistered Securities Trading

The US Securities and Exchange Commission (SEC) has charged crypto asset trading platform Bittrex and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency. In a separate charge, Bittrex Global is also facing charges for its operation of a single shared order book with Bittrex.

The SEC has filed four charges of Exchange Act violations against the companies and Shihara in the US District Court Western District of Washington. According to the SEC’s complaint, tokens traded on Bittrex, including OMG, Dash, Algorand, Monolith, Naga, and IHT, are securities. The agency has been criticized in the past for its “regulation by enforcement” approach, which claims tokens are securities only at the time of filing complaints and not before.

The SEC’s charges against Bittrex highlight the regulatory uncertainty surrounding the crypto industry, especially when it comes to determining whether digital assets qualify as securities. The agency has previously filed charges against several companies for unregistered securities trading, including Telegram and Ripple.

Bittrex is not the first cryptocurrency trading platform to face legal action from the SEC. In 2019, the agency took legal action against EtherDelta, a decentralized exchange, for operating an unregistered securities exchange. The SEC has also previously warned investors about the risks associated with investing in cryptocurrencies and initial coin offerings (ICOs).

Bittrex has been a prominent player in the crypto industry since its launch in 2014. The platform currently supports trading in over 300 cryptocurrencies, making it one of the largest crypto exchanges in the world. However, the SEC’s charges against the company and its former CEO could have significant implications for the broader crypto industry, especially when it comes to determining whether certain digital assets qualify as securities.

In response to the SEC’s charges, Bittrex issued a statement saying that it had been in “close communication” with the agency over the past two years and had been “cooperating with them in an effort to address their concerns.” The company also said that it “disagrees” with the SEC’s assessment that certain tokens traded on its platform are securities and plans to “vigorously defend” itself against the charges.

In conclusion, the SEC’s charges against Bittrex and its former CEO highlight the ongoing regulatory uncertainty surrounding the crypto industry. While the agency has taken legal action against several companies for unregistered securities trading, questions remain about how to determine whether certain digital assets qualify as securities. The outcome of this case could have significant implications for the broader crypto industry and how it is regulated moving forward.