Bittrex Crypto Exchange Could Face SEC’s Enforcement Action

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Crypto exchange Bittrex has received a warning that it may face possible enforcement action from the US Securities and Exchange Commission. This is coming following its plans to close operations in the US.

Bittrex’s General Counsel, David Maria, revealed in a report that the company was notified about potential action in March. However, he said that the corporation had already begun the process of closing down its US operations at the time.

Details of the Wells Notice

According to the Wells notice, Bittrex was accused of violating laws by operating as an exchange, broker-dealer, and clearinghouse without first registering with the SEC.

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In response, Mr. Maria said the agency lacked regulatory clarity governing the registration of exchanges. He hinted that Bittrex had previously discussed registering its operations with the agency last year. However, the company discovered that route couldn’t be taken without virtually stopping all of its revenue-generating operations in the US.

Bittrex Threatens to Sue SEC

Remarkably, Bittrex is unsure whether the SEC will bring a lawsuit considering its plans to terminate its US operations. However, Mr. Maria stated that his company will sue the regulators if they pursue any enforcement action.

He continued by saying that Bittrex would only consider its stance on litigation if the SEC made a fair settlement offer. 

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Notably, this is not the company’s first legal battle. In October, the US Treasury fined the business $30 million for marketing its services to users in sanctioned countries.

Bittrex’s Decision to Close its US Shop

Bittrex announced earlier this month its decision to close its US operations, citing the country’s uncertain legal framework and terrible economic conditions. The firm said it took the decision due to heightened regulatory scrutiny and uncertainty regarding crypto firms in the area.

Meanwhile, the corporation has informed its clients that their cash is safe, and a withdrawal deadline of April 29, 2023, has been set for them to collect their funds.

SEC Aggressively Pursues Enforcement Action

Interestingly, the news comes amid regulatory uncertainty and crackdowns in the crypto space in recent times. For instance, the regulator filed charges against Kraken in February over its failure to register its staking program. Consequently, the SEC ordered Kraken to end the scheme and pay $30 million.

Similarly, the crypto exchange platform Coinbase also received a Wells notice from the agency last month.

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