US-based cryptocurrency exchange Bittrex announced on June 7th that it would no longer allow its US users to trade in 32 different cryptocurrencies after June 21st. The cryptocurrencies that the exchange will block include Quantum (QTUM) and Storj (STORJ).
The announcement came just a day after non-US-based users on another US-based crypto exchange, Poloniex, lost a total of $13.5 million due to a flash crash in a little-known cryptocurrency, Clams (CLAM).
— Bittrex (@BittrexExchange) June 8, 2019
After deciding to socialized the loss (distribute it among its users, even those who were not directly involved), Poloniex has found itself in the midst of a slew of legal threats and dissatisfied customers.
While there is no known direct connection between the two exchanges, it’s possible that Bittrex’ decision to block the assets was motivated by a desire to prevent something similar from happening to its US users.
The Assets Can Stay on the Exchange, But They Can’t Be Used
In any case, US-based Bittrex users will no longer be able to buy or sell the coins on Bittrex’ blacklist as of June 22nd. Open orders involving these assets will be canceled.
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Bittrex suggested in the announcement of the blocking that affected users could sell the blocked coins for assets that will stay available to them or move them off the exchange.
Bittrex did say that the forbidden assets will at least be able to stay on the exchange as long as they are supported by the non-US arms of the exchange: “U.S. Customers may withdraw or continue to hold in their Bittrex wallet affected Tokens/Coins for as long as Bittrex International supports a market in those Tokens/Coins.“
An email containing more detailed instructions will reportedly come before the change goes into effect.
Restrictions and Controversy
This isn’t the only recent incidence of a major cryptocurrency exchange placing restrictions on US-based users. Finance Magnates reported last week that Malta-based cryptocurrency exchange Binance would bar US users (along with users in 28 other countries) from accessing its new decentralized exchange.
Earlier this year, Bittrex canceled what would have been its first-ever IEO following controversy around the company whose tokens would have been sold.