Bittrex

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Bittrex
Bittrex.png
Founded 2014
Headquarters Seattle, Washington
Key People Bill Shihara, Co-Founder and CEO; Richie Lai, Co-Founder and Chief Information Officer; Rami Kawach, Co-Founder and Chief Technology Officer
Products Cryptocurrency Exchange
Twitter @BittrexExchange
LinkedIn Profile
Facebook Page
Website Bittrex.com
Releases Company News
Blog Bittrex Blog

Bittrex has been one of the major U.S. cryptocurrency trading platforms. It was founded in 2014 by three senior security managers from Amazon: Bill Shihara, co-founder and CEO; Richie Lai, co-founder and chief information officer; and Rami Kawach, co-founder and chief technology officer. The three are also alumni of Microsoft.[1]

Overview

Offering 284 trading pairs, in August 2018 Bittrex was reported as the 32nd largest cryptocurrency exchange in the world according to online data aggregator CoinMarketCap. [2] Its rank had fallen to 100th by mid November 2019.[3] The company's relative fortunes reversed by the beginning of 2021, when it had moved up to 14th on CoinMarketCap and 15th on CryptoCompare, another online cryptocurrency data aggregator and reporting service.[4]

Bittrex looked into expanding into cryptocurrency derivatives by acquiring a controlling stake in Seed CX, according to a Seed CX announcement on December 20, 2017.[5] Seed CX's swap subsidiary, Seed SEF, had been licensed a year earlier but had never operated. Bittrex's Shihara joined the Seed board of directors.[6] Seed CX CEO Edward Woodford later told John Lothian News that Bittrex no longer had any ownership in the company and that Shihara had left the board. Both facts were later confirmed by representatives from Bittrex.

On May 31, 2018, Bittrex announced that it had established a banking relationship with New York's Signature Bank, which facilitates U.S. dollar-to-cryptocurrency transactions for some customers.[7]

On August 20, 2018, Bittrex joined Bitstamp, bitFlyer USA, and Gemini in forming the Virtual Commodity Association Working Group.[8]

Bittrex launched an OTC trading desk to handle cryptocurrency orders with values of $250,000 or more on January 14, 2019.[9]

According to a complaint filed in King County, Washington, by a customer, Gregg Bennett, Bittrex's negligence allowed his account to be robbed of 100 bitcoin in April 2019 in a "SIM swap." “What I fault Bittrex for is their inability to see obvious suspicious activity,” Bennett told CoinDesk.[10] A SIM swap is a fraudulent maneuver where a criminal pretends to own a person's mobile phone which has been lost or damaged and now requires the telecom provider to give them access to the SIM card. The data on the card are then used to gain access to a cryptocurrency account.[11]

Bitlicense Application

In 2015 Bittrex applied for a New York State Bitlicense.[12] The application was rejected in 2019. According to the New York State Department of Financial Services, the rejection was due to Bittrex's "seriously deficient" customer identification program. The NYDFS found that a number of people trading on Bittrex did not provide tax information, names, or birthdates. Some were even found using "clearly false names" like "Donald Duck" and "Elvis Presley." In a letter addressed to Bill Shihara, the NYDFS said that the Department had worked with Bittrex "steadily" to "address continued deficiencies and to assist Bittrex in developing appropriate controls and compliance programs commensurate with the evolving nature of the sector." The letter said the Department had issued a number of "deficiency letters," and that due to "a number of unresolved items," in February 2019, the NYDFS had launched a four-week review of the exchange in their Seattle and Washington, D.C. offices. The letter, dated April 10, 2019, ended by saying that Shihara had 14 days to provide a written confirmation that he had received the letter, including a plan for how Bittrex planned on ceasing to do business with New York residents. Bittrex responded that some traders, including those using fake names, never actually conducted any trades. In a statement released by Bittrex following the receipt of the letter, Bittrex said that it disagreed with the NYDFS' claims, and that "corporate responsibility is in our DNA and our commitment to regulatory and compliance guidelines is second to none."[13][14][15]

Trading Pairs

Bittrex offers its users the ability to trade bitcoin, Ether, Tether, TrueUSD, and U.S. dollars for various cryptocurrencies, including ADA, TRX, and ZEC. It also allows for the liquidation of bitcoin, Ether, and Tether to USD as well.[16]

Bittrex announced on August 8, 2018 that it would be adding XRP/USD and ETC/USD trading pairs to the exchange, both launching August 20, 2018. The exchange also said it plans on adding more USD/cryptocurrency markets to the exchange over time, using a phased approach, or gradually doing so after spending time developing these services and markets, ensuring that they will be ready for customers upon launch.[17][18]

In June 2019, Bittrex announced that it would begin blocking U.S. users from trading 32 cryptocurrencies on the exchange, including QTUM. Bittrex said this would not affect the coins' availability to non-U.S. users.[19][20]

OFAC Thaw

According to a November 11, 2019, article in CoinDesk, Bittrex was given permission by the U.S. Treasury Office of Foreign Assets Control (OFAC) to return funds to customers who reside in countries with which U.S. entities are not entitled to do business due to U.S. government sanctions.[21]

Litigation

In June 2020 Bittrex, along with another cryptocurrency trading platform, Poloniex, was added to the list of defendants in a class action suit filed in October 2019 by Vel Freedman and Kyle Roch, lawyers who earlier participated in suits against Craig Wright. The suit originally named Bitfinex and Tether as having violated the Commodities Exchange Act as well as the federal RICO statute by, among other activities, engaging in a "sophisticated scheme that coopted a disruptive innovation — cryptocurrency — and used it to defraud investors, manipulate markets, and conceal illicit proceeds." The amended suit claimed that Bittrex was among the “knowing participants in the scheme” to transfer large amounts of unbacked USDT between exchanges.[22]

Coin delistings

In a Tweet on December 29, 2020, Bittrex said that it would delist Ripple on January 15, 2021. Although no reason for the delisting was provided by the company, the announcement joined similar statements by several other trading platforms after the U.S. Securities and Exchange Commission sued Ripple on December 17, 2020, saying its coin, XRP, is an unregistered security. There were at least 430 responses to the tweet.[23] A few days later, and again without explanation, Bittrex tweeted that it would delist Monero, Zcash and Dash, all of which are privacy coins, on January 15. In an unusual move, Bittrex blocked all Twitter responses to its Tweet.[24]

References

  1. ABOUT US. Bittrex.
  2. 24 Hour Volume Rankings (Exchange). Coinmarketcap.
  3. 24 Hour Volume Rankings (Exchange). Coinmarketcap.
  4. Exchanges. CryptoCompare.
  5. For this firm, bitcoin is more attractive than weed. Crain's Chicago Business.
  6. Bittrex Inc. takes controlling strategic stake in Seed opening new trading opportunities for Institutional Crypto Trading. Globe Newswire.
  7. Bittrex Gets Bank Agreement to Help You Buy Bitcoin With Dollars. Bloomberg.
  8. The Biggest Digital Exchanges Are Teaming Up To Police the Crypto Space. Bloomberg.
  9. Bittrex Follows Major Crypto Exchanges in Launching Over-The-Counter Trading Platform. CoinTelegraph.
  10. Bittrex Target of Latest $1 Million Crypto SIM Hack Lawsuit. CoinDesk.
  11. Michael Terpin Urges FCC to Curb Crypto Fraud That Cost Him $24 Million. CoinDesk.
  12. The Real Cost of Applying for a New York BitLicense. Coindesk.
  13. Letter of Rejection. New York State Department of Financial Services.
  14. Bittrex Statement on the New York Department of Financial Services (NYDFS) Decision. Bittrex.
  15. Bittrex customers were using fake names like Donald Duck and Elvis to trade, and now the exchange has to leave New York. The Block.
  16. Bittrex Markets. Bittrex.
  17. Here We Go…Rolling Out More USD Pairs. Bittrex.
  18. Crypto Exchange Bittrex Expands, Adds Ethereum Classic and XRP Trading Pairs. Cointelegraph.
  19. Crypto Exchange Bittrex to Block US Users From Trading in 32 Cryptos. Cointelegraph.
  20. Market Availability Changes for U.S. Customers 6/21/19. Bittrex Blog.
  21. Bittrex Will Release Frozen Crypto to Former Users in Sanctioned Regimes. CoinDesk.
  22. Amended lawsuit filed against Bitfinex and Tether for allegedly manipulating crypto market, Bittrex and Poloniex added as new defendants. The Block Crypto.
  23. @BittrexExchange. Twitter.
  24. @BittrexExchange. Twitter.