[ad_1]
The ex-Big Law attorney who leads Bittrex Global, the crypto exchange that is shutting down, said emerging regulations across the globe will help digital currency thrive in coming years.
“This is going to sound weird given that we’re winding down the company, but I’m incredibly optimistic for the future,” Oliver Linch, a former Shearman & Sterling lawyer who is Bittrex’s CEO, said in an interview. “We stand at the crossroads of a real opportunity for the whole crypto industry to grow up.”
The UK next year plans to enact legislation housing crypto within the scope of current financial services rules, and the EU has introduced a separate Markets in Crypto Assets (MiCA) regime for the industry. There are also “significant developments” in Dubai, Hong Kong, Singapore, and Japan as the crypto sector helps shape new rules, he said.
Bittrex Global announced Nov. 20 that it’s winding down, a decision that comes six months after its US arm, Bittrex Inc., said it was closing because of the regulatory challenges. The two Bittrex entities last August reached a $24 million settlement with the Securities and Exchange Commission to resolve charges they violated US securities laws by offering services to American clients without registering.
Oliver Linch, Bittrex Global CEO
The SEC fine and a significant drop in market share over the last few years were contributing factors in Bittrex Global’s demise, Linch said. The exchange is suspending spot trading on Dec. 4 and advising customers to begin withdrawing funds.
Bittrex’s announcement came weeks after FTX founder Sam Bankman-Fried on Nov. 2 was found guilty of seven counts of fraud and conspiracy. His crypto exchange collapsed into bankruptcy last year amid reports that its venture capital arm, Alameda Research, had outstanding debts in the billions of dollars.
On Nov. 21, Binance Holdings Ltd., the world’s largest crypto exchange, pleaded guilty to anti-money laundering charges and agreed to pay $4.3 billion. US prosecutors said Binance had such lax controls over transactions that terrorists, hackers and sanctions violators used the platform to move money for years.
“The hits keep coming,” said American University law professor Hilary Allen. “And there’s a very predictable response from the industry: ‘We’ve got rid of the bad actors.’ But what’s striking is even the good actors are not complying with US securities laws.”
Emerging crypto regulation does not change the fact that blockchain technology has so far failed to live up to expectations of making finance more efficient, Allen said.
‘Increase Standards’
Bittrex Global was formed in 2019 as a separate international arm of Bittrex Inc., the US exchange launched in 2014 by three cybersecurity engineers and alums of Amazon.com Inc. The company presented itself as a “grown-up” institution that could help crypto move beyond its Wild West roots.
Linch, a former London-based associate in Shearman & Sterling’s financial institutions practice, in 2022 became CEO of Bittrex Global, which operated as a regulated spot exchange in the UK territory Bermuda and the tiny European nation Liechtenstein and served customers outside the US.
As a lawyer who previously spent a decade advising big mainstream financial institutions, Linch appeared well-suited for the role as a champion of a rules-based order in crypto. He hasn’t given up on that hope despite the company’s shuttering. “We’re seeing a healthy competition to increase standards,” he said.
Bittrex Inc. shut down in April and filed for bankruptcy after saying it was “no longer feasible” to operate in the US because of an uncertain regulatory environment. The SEC that same month charged Bittrex with earning at least $1.3 billion in revenue while operating as an unregistered securities exchange. The suit also claimed Bittrex Global failed to register as a national securities exchange.
A year earlier, Bittrex Inc. agreed to pay US bank regulators $53 million to settle charges of violating sanctions and anti-money laundering laws.
The cases against Bittrex were part of a wave of enforcement actions from the federal government targeting crypto. SEC chair Gary Gensler has argued that most digital tokens are securities and that many in the industry are shirking well-established law.
Linch argued that crypto technology does not fit within decades-old securities laws. The lack of a new regulatory framework “essentially means there isn’t an effective rule of law when it comes to digital assets in the US,” he said.
US lawmakers have so far failed to make much progress on crypto legislation, which Linch said will continue to be a drag on the industry given the US’s powerful role in the financial markets.
He declined to share info about Bittrex Global’s current assets under management. The firm’s daily trading volume hovered around $20 million on Nov. 22, compared to Coinbase Global Inc’s volume of $2.4 billion, according to CoinMarketCap.
Bittrex Global made the decision to cease operations in consultation with the three founders, Linch said. His last objective is for the company to show a crypto institution can shut down without the “chaos” that plagued the sector the last couple years.
“It’s desperately sad,” he said, “but there’s some dignity to it.”
[ad_2]
Source link