Bittrex Fined For Violating Sanctions

avatar

In today's edition of YIYL, (You Invest, You Lose), we take a look at space that has gone pretty quiet of late, the centralised exchange, the lifeblood of the shitcoin market, and a way for most normies to come for bitcoin but get fed a bunch of shitcoins in the process.

While CEX's can make bank they do take on a lot of risk, more than people realise, since they are companies, they have to comply with all the regulatory burden that comes with being a company and also the growing regulation that is being added on top as the industry matures.

As banks and other financial service providers see some of their sweet lunches being eaten they are going to try and squeeze these companies and go after them for every mistake they make. If a CEX is caught in something you best believe they are going to get investigated, if someone like HSBC does it who gives a fuck, they got a banking charter, basically a license to tell regulators to fuck off, because we're too big to fail

This is the nature of the fiat game and exchanges know this as the bridge between fiat, bitcoin, and shticoins. While they can find places to operate in that keep them shielded, Binance and the likes obviously have since they pull so much shit and never get nailed for it, but others aren't so lucky.

bittrexfined.png

Who is Bittrex

Founded in 2014 by three cybersecurity engineers, Bittrex is one of the oldest exchanges and is founded in the US and based in Seatle. Now being in the US means you have access to those fat American wallets, and that liquidity is a gift that you can only suck on if you play by the regulatory rules, they might be busy with other shit, but if you come across their desk, you're going to get hammered.

If you've been in bitcoin and shitcoins long enough, you've probably heard of or used the service before, they support a bunch of coins and while not the most liquid exchange, is still fairly useful to a lot of people.

Why come down on Bittrex?

So this week we've seen Bittrex get slapped with a ok-ish sized fine, of over 50 million. That's got to put a dent in your balance sheet I am sure of it.

The U.S. Treasury Department announced fines against Bittrex, a U.S.-based cryptocurrency exchange. The Office of Foreign Assets Control (OFAC) announced a $24 million penalty against the company, and the Financial Crimes Enforcement Network (FinCEN) announced a $29 million fine.

Both groups form parts of the Treasury Department. FinCEN said it would credit the fine to be paid to OFAC towards the total fine they imposed, meaning Bittrex will pay $29 million in total, which ain't too bad.

Bittrex does about $18,686,862 in daily trading so you tell me how long they'd take to cover that based on trading fees. If the fee they charge is 0.35%. That's about $65 404 a day in fees, so around 443 days to repair that dent in their balance sheet, which ain't too bad, giving up a year and bits of income.

According to the Treasury Department, the fines are the largest they've ever imposed on a virtual currency platform.

Why fine bittrex?

The OFAC sanction was imposed due to 116,421 reported sanctions violations in which Bittrex failed to prevent people in Crimea, Cuba, Iran, Sudan, and Syria from using their service.

In total, these prohibited individuals performed more than $263 million in transactions on the platform. The FinCEN fine was imposed due to "willful violations" of the Bank Secrecy Act's requirements pertaining to anti-money laundering (AML) and suspicious activity reports.

I am not sure how this all works, because from my understanding Bittrex is only for US users, and Bittrex global is incorporated in Liechtenstein, anyway that's beyond my pay grade but I guess a lesson learned no dealing with sanctioned nations, you gotta listen to big daddy government.

P2P markets will become more important

As we see governments trying to add restrictions to bitcoin and shitcoins to protect their shitcoin, I don't see why they won't continue to press on exchanges. You don't want dollars flowing to countries you sanctioned and through bitcoin and stablecoins, you now have access to an alternative system and a new eurodollar market.

Source:

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, "I am a Jessie."

Let's connect

If you liked this post, sprinkle it with an upvote or esteem and if you don't already, consider following me @chekohler and subscribe to my fanbase

Earn Free bitcoin & shopEarn Free Bitcoin & shopClaim Free Bitcoin & Shop
lightning.jpgSmiles.jpgthebitcoincompany.jpg

Posted Using LeoFinance Beta



0
0
0.000
8 comments
avatar

some time ago I took a look at this exchange which in my opinion has lost more and more popularity over time, thanks for this information. I too have always thought that Bittrex is more for the US market than anything else

0
0
0.000
avatar

I used them because they were one of the few exchanges that had STEEM to BTC back in the day so I could dump those steem bags lol, but it looks like those days are over

0
0
0.000
avatar
(Edited)

In Bittrex you need to do the KYC if you want to withdraw. How do they let people trade on those banned countries to use the platform?

0
0
0.000
avatar

I am not sure but from my experience with these things it gets murkey when people have dual citizenship, can purchase KYC'd accounts from other people or ask friends and family to send money from their exchange account to a on-chain wallet in another country, it becomes hard to police

0
0
0.000
avatar

Wow, people are selling their account with their KYC and personal information. This is a serious flaw from my point of view.

0
0
0.000
avatar

Some is by choice if someone offers you good money for a KYC'd account why not if you need the money in other cases people have hacked exchange databases and sell those kyc account data

0
0
0.000
avatar

And it all began with the KYC regulation and big brother became big daddy not long after.
I'm just a Jessie's gal.

Posted Using LeoFinance Beta

0
0
0.000
avatar

I always wonder when these things turn and people are going to get stuck without funds like the Celsius guys, i can't imagine not holding my own keys after seeing that drama play out

0
0
0.000