Bittrex, which supports over 200 cryptocurrencies and reportedly has over 3 mln customers worldwide, will cooperate with New-York based Signature Bank to launch fiat trading for Bitcoin (BTC), Tether and TrueUSD. Speaking of the new banking deal, Bittrex CEO Bill Shihara is quoted as saying that the process “had been a long path”:
“They really do look and pore through the entire business. They want to make sure that we’ve got robust AML/KYC (anti-money laundering/know your customer) processes, that we’ve got the right controls on our finances. They do background checks and everything. They really look at our business soup to nuts.”
Shihara suggested that the deal pointed to a broader trend in terms of interaction between the traditional finance sector and the crypto sphere, saying that:
“It’s not just about banks being able to trust Bittrex. It’s about banks being able to trust crypto in general. And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance.”
The service will initially only be open to corporate customers in the states of Washington, California, New York and Montana, reportedly for regulatory reasons. Bloomberg further reports that Bittrex has plans to ultimately offer crypto-fiat trading to retail customers as well. At press time Bittrex’s 24 hour trade volume was over $98 mln.
In the current climate, crypto exchanges need to work with correspondent banks in order to offer crypto-fiat alongside crypto-crypto trading on their platforms. Major US crypto exchange Coinbase, for example, has developed relationships with Cross River Bank, Metropolitan Bank and Silvergate Bank, and recently opened an account UK bank Barclays.
A recent WSJ report suggested that Coinbase is now looking to secure a federal banking charter, which would remove the need for them to find a banking partner to support its activities.
Uncertainty from banks about regulatory compliance has meant that crypto exchanges’ dependency on their cooperation can be fraught with complications, as a string of suspensions and restrictions on exchanges’ bank accounts has shown. Just this week, Poland’s largest crypto exchange BitBay was forced to halt its activities in the country after local banks ceased to cooperate with the company.