Bittrex Will Eliminate 82 Tokens Due to Lack of Liquidity in Small Cryptocurrencies
Bittrex, among the greatest cryptocurrency exchanges which also forces UpBit, South Korea's second biggest exchange operated by Kakao subsidiary Dunamoo, has stated it will eliminate 82 tokens from its trading platform.
«Occasionally, there are circumstances that lead Bittrex to remove a coin's wallet or market from the Bittrex Exchange,» said the Bittrex team. «We'll be removing the pockets included in the list below on March 30, 2018. Once these wallets are eliminated, we will no longer have the ability to recover those coins. Users must withdrawal their coins before March 30, 2018, to be able to maintain them.»
The Bittrex team also stated that several cryptocurrencies have broken blockchains that have disabled users from withdrawing their accounts.
«The coins marked with an asterisk (*) have broken blockchains or pockets that won't allow withdrawals,» said Bittrex, referring to cryptocurrencies such as CRYPT.
On top trading platforms, it is difficult for exchanges to sustain a stable order publication if a cryptocurrencies doesn't have sufficient liquidity and demand from users of the platform. Lack of money leads to price manipulation, which can be initiated with funds as little as $50,000, as revealed in the recent study done by cryptocurrency dealer Sylvain Ribes.
By using a method called slippage-a process of selling $50,000 worth of a specific cryptocurrency on a trading platform to measure its effects on the cost-, Ribes assessed the liquidity of digital assets on major markets such as OKEx and GDAX. While GDAX had a slippage of less than one percent, on OKEx and other cryptocurrency-only exchanges with low market cap or quantity cryptocurrencies, each sale of $50,000 led to a two to 10 percent fall in the market value of cryptocurrencies.
«A bit of wash artificial and trading volume inflation is to be expected in a thoroughly unregulated market. What I did not expect was the magnitude of the fraud,» said Ribes. «Many pairs, albeit boasting up to $5 million volumes, would cost you more than 10% in slippage, should you want to liquidate a mere $50k in assets,» he added.
The US Securities and Exchange Commission (SEC) recently warned investors against pump and dump schemes that are frequently seen in the cryptocurrency marketplace.
«Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to spend their money. These frauds include 'pump-and-dump' and market manipulation schemes between publicly traded companies that promise to provide exposure to these new technologies,» SEC's statement read.
Earlier this month, the SEC asked cryptocurrency exchanges to de-list ICO tokens or register with the agency to keep on providing support for tokens. For US-based cryptocurrency exchanges like Bittrex, it is mandatory to register with the SEC before processing trades involving tokens.
Throughout next few months, many major exchanges will probably de-list or remove modest cryptocurrencies which are prone to pump and dump schemes, and market manipulation.