Bittrex Leaves Malta Amid New AML Regulations, Coincidence?

Bitcoinist October 30, 2019
Updated 2019/10/30 at 10:20 AM
5 Min Read

Leading crypto exchange, Bittrex, announced that it was leaving Malta last week and setting up new headquarters in Liechtenstein. According to a market onlooker, the relocation has taken place around the same time the Maltese government has announced plans to tighten its money laundering policy for cryptocurrency businesses.

Malta to Actively Monitor Crypto Businesses

Coincidence or not, one month before Bittrex’s move the Malta Financial Services Authority (MFSA) announced new plans to update crypto regulations that will allow the watchdog to actively monitor exchanges and other firms to prevent money laundering.

The update is part of a strategic plan for 2019-2021. During this period, the MFSA hopes to improve the entire regulatory approach across all sectors.

The document reads:

Whilst Malta has taken unprecedented steps in bringing blockchain and crypto technology into the regulatory fold, we understand that such innovations present challenges in the prevention of money laundering and terrorism financing. Hence, at the MFSA we will be striving to modernise our regulatory approach to be prepared and be a step ahead of industry developments.

Some online commentators made the connection between Malta’s tighter monitoring and Bittrex’s restructuring.

Bittrex is moving its headquarters from #Malta to Liechtenstein

This after Maltese Financial Regulator said that it will “actively monitor” licensed #cryptocurrency businesses in the country to prevent money laundering#crypto #bitcoin #trading #news #cryptonews #blockchain

— OspreyFX (@OspreyFx) October 22, 2019

Bittrex is now moving to Liechtenstein, and will be closing its Malta office as of today. As part of the reorganization, Bittrex International, which operated out of Malta, is being replaced by a new exchange called Bittrex Global.

The latter has set up its new headquarters in Liechtenstein, a widely regarded ‘crypto friendly’ jurisdiction. Customers will be able to seamlessly move their accounts from one exchange to another once the move is complete.

According to attorney Tal Itzhak Ron, Chairman and CEO of Tal Ron, Drihem & Co., Law Firm, who represents many companies in the Crypto and Financial Entertainment sectors, the practice of obtaining multiple regulations, and sometimes relocating between them, has become very common in the last two years in the Crypto space.

We see this practice also in financial websites which have moved their operations out of Australia/ASIC – we have got them licensed in Cayman, Vanuatu and the Bahamas; even in the online gambling sectors, one can see operations shifting between Maltese, Curacao and other jurisdictions quite commonly.

Lawyer Ron adds,

There is no problem with operations that have several licenses and jurisdictions and shift between those, as long as they are fully compliant with the regulations of their jurisdiction and the jurisdictions they are operating in

Bittrex Moves $440M Worth of BTC in Single Transaction

Interestingly, Twitter user Whale Alert notified that Bittrex moved hundreds of millions in crypto funds to unknown wallets. The receiving addresses are most likely the exchange’s new wallets. One of the transactions was huge, amassing over 43,500 Bitcoin worth more than $414 million USD.

?????????? 43,653 #BTC (414,139,256 USD) transferred from #Bittrex to unknown wallet


— Whale Alert (@whale_alert) October 28, 2019

Besides that, Bittrex moved a further 5,000 BTC in another transaction, along with $127 million in Ethereum and over $90 million in XRP in three tranches of about 100 million XRP each.

In total, Bittrex transferred nearly $700 million worth of crypto funds, suggesting that it moved about 0.27% of the entire crypto market, whose capitalization is about $251 billion as of today.

Nevertheless, the exchange called for calm, assuring clients and the crypto community that the funds were safe.

Today we will be moving funds between our cold and hot wallets.

⏰ There is no need to be alarmed
? This is a known movement of funds
? Your funds are safe

— Bittrex (@BittrexExchange) October 28, 2019

What do you think about Bittrex’s decision to leave Malta? Share your thoughts in the comments section below!

Images via Shutterstock, Twitter: @OspreyFx, @whale_alert, @BittrexExchange

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