Bittrex Has Agreed to a $24M Settlement With the SEC

August 14, 2023

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Four months after facing charges from the United States Security and Exchange Commission (SEC) for operating an unregistered exchange, Bittrex finally settled with the security regulator.

SEC Settles With Bittrex

The SEC announced that the crypto asset trading platform and its co-founder and former Chief Executive Officer (CEO), William Shihara have agreed to a $24 million settlement for charges that they operated an unregistered national securities exchange, broker, and clearing agency. In addition, Bittrex Inc.’s foreign affiliate, Bittrex Global GmbH, also agreed to settle charges that it failed to register as a national securities exchange.

Gurbir S. Grewal, director of the SEC’s enforcement division, said in a statement that “for years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts….. all in an effort to evade the federal securities laws. They failed.”

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The SEC Bittrex Charge

On Monday, April 17th, SEC filed a complaint against Bittrex although the exchange’s General Counsel, David Maria, revealed in a report that the company was notified in March that it would likely face enforcement action. According to Maria, Bittrex had started processing its exit from the United States by that time.

At the same time, Mr. Maria pointed out that the agency lacked regulatory clarity governing the registration of exchanges, confirming Coinbase’s stance about the SEC. Bittrex claimed to have approached the commission about registering its operations sometime last year. The company discovered that route couldn’t be taken without virtually stopping all of its revenue-generating operations in the U.S.

Crypto Exchanges Accuse SEC of Unclear Regulation

It is worth noting that Bittrex attributed its decision to cease operations in the U.S. to the nation’s unclear regulatory framework and poor economic conditions.

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Another co-founder Richie Lai said “nine years later, the crypto ecosystem is very different. Regulatory requirements are often unclear and enforced without appropriate discussion or input, resulting in an uneven competitive landscape.”

Coinbase filed a lawsuit against the SEC requesting that the court issue an order compelling the SEC to respond to its inquiry for regulatory clarity. The crypto exchange claims that the agency has had opposing views regarding the regulation of digital assets over the years.