3 - 5 minute read
Bittrex Global CEO Oliver Linch is pushing back against the United States Securities and Exchange Commission (SEC) after the regulatory body charged the company for operating as an unregistered exchange, broker, and clearing agency. Speaking at the Consensus 2023 conference in Austin, Texas, Linch claimed there had been “precisely zero” communication between Bittrex Global and the SEC prior to the Wells notice being issued to the company’s US counterpart in March. The SEC charged Bittrex in April in connection with its operation of a single shared order book along with Bittrex.
Linch echoed the complaints of US-based crypto companies about the SEC’s position on enforcement actions, hinting that the “come in and talk to us” approach often espoused by chair Gary Gensler doesn’t hold water. Upon receiving a similar Wells notice from the SEC in March, Coinbase chief legal officer Paul Grewal said the firm had met with the financial regulator “more than 30 times over nine months” but largely did not receive any feedback.
“We never heard from them, they didn’t speak to us, they didn’t ask us for any information, they had no interaction with Bittrex Global whatsoever,” said Linch on the SEC. “It’s this uncertainty that permeates everything. You just don’t know what’s coming next or where it’s going to come from or why or how in the US.”
The EU’s forward-thinking #MiCA framework supports crypto innovation, while the US’s retrofitted regulation-by-enforcement struggles to provide clarity.— Oliver Linch (@OliverLinch) April 30, 2023
Will the US lose ground to Europe's clear guidelines, or can they adapt for the future of #crypto? Only time will tell.
In March, Bittrex announced plans to wind down its US operations by April 30, specifically citing the challenging regulatory and economic environment in the United States. At the time, the exchange said regulatory requirements for crypto firms in the US were “often unclear and enforced without appropriate discussion or input”. It’s unclear if the firm reached this decision prior to its Well notice.
Linch suggested a “combination of regulations and regulators” as a potential winning recipe for crypto firms looking to start in the space — both the established framework for digital assets and policymakers willing and able to use it. Linch said he could see aspects of the European Union’s Markets in Crypto Assets, or MiCA, framework modeled on regulations in Liechtenstein and Bermuda.
The lack of regulatory clarity in the US continues to be a major concern for crypto firms considering moving their operations outside the country. While the EU’s forward-thinking MiCA framework supports crypto innovation, the US’s retrofitted regulation-by-enforcement struggles to provide clarity. Will the US lose ground to Europe’s clear guidelines, or can they adapt for the future of crypto? Only time will tell.
The Bottom Line
The ongoing regulatory uncertainty in the US is driving crypto firms to explore opportunities outside the country. The lack of clear communication between firms and regulators is exacerbating the situation. As a result, crypto firms are looking to jurisdictions with established frameworks for digital assets, such as Liechtenstein and Bermuda. Traders should keep an eye on the regulatory landscape, as it could have significant implications for market moves in the crypto space.