On October 3rd, Julian Yap of Bittrex stated that the following pairs would be delisted on October 13th: BTC-BTA, BTC-BTS, BTC-DAR, BTC-DRACO and ETH-BTS. The biggest market capped coin being delisted, Bitshares, has come as a huge shock to cryptocurrency community. Bitshares is considered to be one of cryptocurrencies legacy coins; a popular coin, especially in the Chinese community, that offers a decentralized exchange and a range of pegged assets like BitUSD and BitGOLD. Bitshares market cap, despite the recent trade-off, is sitting at $100 million, but once peaked at $900 million earlier this year. As you can you, according to this graph, transactions increased tenfold for the Bitshares blockchain in the past year.
Bittrex, now the largest in volume amongst all alternative cryptocurrencies, is now a significant player to watch with its announcements now making huge impacts. The price, as a result of the news, plummeted dramatically as investors seek to minimise their losses.
The bombshell has sparked an angry mob on Bittrex’s slack and Bitshares Reddit, with hundreds of messages asking for clarity and some kind of statement on why Bitshares is being delisted. As per usual with all delistings, Bittrex has failed to comment on why Bitshares is being delisted. Theories abound as to why Bitshares was delisted, with no clear violation of Bittrex’s removal policy. One such theory is circulating as a possible reason.
However, the main reason for such delistings is most likely new regulatory rules forced on centralized exchanges. As Bittrex is based in the US, it must abide by new SEC guidelines. Any cryptocurrencies that are close to being labeled a security may now come under fire and authorities may force centralized exchanges hands to remove those coins. The clearest evidence of this comes from Sigwo of Darcrus, another coin being delisted, who stated,
“Well, Bittrex didn’t notify me they were delisting Darcrus today. We were asked to provide courses of action and we were supposed to discuss today. I see Bittrex decided…It was not for volume. The question came because of their lawyers and the buyback and burn program portion of projects. Other projects that have this structure are also under scrutiny.”
Although Bitshares do not do buybacks, it is interesting to see that Bittrex were influenced by their lawyers to question certain projects and their practices.
The current news of the Bitshares delisting comes as a shock to the whole cryptocurrency community as all projects look inwards to see if their project might be labeled a security. Time will time if this is the beginning of a surge of delistings from Bittrex and other high-volume exchanges. However, what is clear is that the current centralized exchanges we have at present won’t cut it in terms of protecting our right to trade freely. What is needed is a pure decentralized exchange. A decentralized exchange would allow users to trade freely without the fear of their coin being delisted from the exchange.
The need for a decentralized exchange has always been important, but with the recent news of delistings, hacks, and closures forced by governments, the need for decentralized exchanges is becoming ever more important. While there are some decentralized exchanges, like EtherDelta, the WAVES Decentralised Exchange, the NXT Asset Exchange and BitShares Asset Exchange, these exchanges only are decentralized within their own blockchain, meaning, they must use proxy tokens to trade with other cryptocurrencies. This is a good temporary solution, however, the Komodo team has developed a way to trade from blockchain to blockchain without a medium of exchange. This is done by atomic cross-chain swaps. As Komodo’s technology is revealed in the future, we may see such delistings in the future as less important as atomic cross-chain trading will become the norm.