SEC Sues Bittrex and Bittrex Global
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit in the Western District of Washington against Bittrex and Bittrex Global in connection with securities-law violations. This, говорится on the regulator’s site.
According to the documents, Bittrex operated an unregistered securities exchange, broker, and clearing agency. The charges also name co-founder and former CEO William Shihara.
“We contend that Bittrex repeatedly prioritized profit over investor protection,” said Gurbir Grewal, Director of Enforcement at the SEC.
He said that the Commission’s actions “send a signal” to other participants in the crypto industry to comply with securities laws and “be accountable for their violations”.
Chief Legal Officer David Maria, in a comment to WSJ, noted that the company had already prepared to wind down operations in the United States when it received the notice from the regulator. According to platform representatives, the decision to exit was related to “regulatory uncertainty”.
The lawyer noted that at the end of 2022 the company discussed with the SEC ways to obtain a license. However, later Bittrex found that it could not meet the regulator’s requirements.
Maria noted that the exchange’s inability to comply with the rules was primarily due to the agency not providing clear requirements for digital assets.
“A lack of regulatory clarity leads to substantial costs and a lack of confidence in what services can and cannot be offered,” he added.
The lawyer predicted two possible outcomes: either the agency would offer the platform a “reasonable settlement,” or Bittrex would file a counterclaim.
In the complaint, the SEC names the following assets as securities: OMG (OMG), Dash (DASH), Algorand (ALGO), Monolith (TKN), Naga (NGC) and IHT Real Estate Protocol (IHT).
“[…] Bittrex and Shihara instructed issuer-applicants to remove notices related to “price forecasts”, “profit expectations” and other “investment-related” terms,” the regulator said.
In response, representatives of Bittrex Global отметили, that the SEC initiated the proceedings without prior contact with the firm.
“Not once did the [Commission] contact us with any request for information or documentation […]. Bittrex Global was prepared to work productively with the SEC — as with all regulators — to clarify our position. It is clear that the SEC is not interested in such discussions,” the statement says.
In October 2022, the Office of Foreign Assets Control, part of the U.S. Treasury, and the Financial Crimes Enforcement Network fined Bittrex $29 million for repeated sanctions-policy and AML procedures violations.
In February 2023 Bittrex filed with the U.S. Department of Labor a notice of workforce reduction amid adverse market conditions. The decision affected 83 of 284 employees.
In March, the American bitcoin exchange Coinbase received a notice from the SEC about an investigation into listing procedures on the platform and its products — Coinbase Prime, Coinbase Wallet and the staking service Coinbase Earn.
In the same month, the U.S. Commodity Futures Trading Commission filed a lawsuit against Binance and its CEO Changpeng Zhao. The regulator alleges that the platform traded derivatives without proper registration.
Update (April 17, 2023, 17:45): The reference to media outlets was removed from the headline following the SEC’s statement. The text adds details of the charges and a quote from SEC Director of Enforcement Gurbir Grewal.
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