Throwing some possibilities out here:
(1.) They are thieves.
(2.) Government interference.
(3.) Blatant Incompetence.
After
the SEC's statement today (and given Bittrex's Seattle headquarters and US user base), I'm leaning heavily towards government interference. The SEC made a chilling reference to exchanges and AML/KYC that I think largely explains Bittrex's recent behavior:
I also caution those who operate systems and platforms that effect or facilitate transactions in these products that they may be operating unregistered exchanges or broker-dealers that are in violation of the Securities Exchange Act of 1934.
Second, brokers, dealers and other market participants that allow for payments in cryptocurrencies, allow customers to purchase cryptocurrencies on margin, or otherwise use cryptocurrencies to facilitate securities transactions should exercise particular caution, including ensuring that their cryptocurrency activities are not undermining their anti-money laundering and know-your-customer obligations. As I have stated previously, these market participants should treat payments and other transactions made in cryptocurrency as if cash were being handed from one party to the other.
I'm not entirely clear on what that means. For instance, I know that contractors get 1099s beyond a threshold of just $600 in total payments during a calendar year. Could it be similar for securities? ...cryptocurrencies? If so, I don't think any of the exchanges -- even the most compliant ones like Coinbase and Gemini -- have been complying. This doesn't bode well for US residents, or anyone with money stuck on these shady exchanges.
