Crypto Exchange Bittrex Settles with SEC for $24 Million
Jessie A Ellis Aug 11, 2023 08:00
Bittrex settles with the SEC for $24 million over charges of operating as an unregistered broker and exchange.
The Securities and Exchange Commission (SEC) revealed on August 10, 2023, that Bittrex Inc., a prominent crypto trading platform, and its co-founder and erstwhile CEO, William Shihara, have reached a settlement over allegations of operating without proper registrations. The charges encompassed operating an unregistered national securities exchange, broker, and clearing agency. Bittrex's international counterpart, Bittrex Global GmbH, was similarly implicated for neglecting to register as a national securities exchange.
Documents from the U.S. District Court for the Western District of Washington detail the SEC's grievances, highlighting Bittrex's role as an unregistered entity catering to U.S. investors. These investors were allegedly presented with crypto assets that, according to the SEC, were securities in disguise. The narrative deepens with claims that Bittrex, under Shihara's guidance, advised crypto issuers to erase certain public statements that could potentially draw regulatory attention.
Gurbir S. Grewal, the SEC's Enforcement Division Director, remarked, "Bittrex's longstanding tactic of sanitizing online statements to sidestep federal securities regulations has proven futile."
The terms of the settlement dictate that Bittrex and Shihara are prohibited from breaching specific sections of the Securities Exchange Act of 1934. Financially, both Bittrex entities are jointly on the hook for a sum of $24 million, a figure that encompasses various penalties and dues.
This settlement is a response to the SEC's charge released on April 17, 2023, in which the regulatory body alleged that Bittrex had amassed a staggering $1.3 billion from transaction fees, all the while neglecting to comply with mandatory registration requirements.
SEC Chair, Gary Gensler, weighed in, asserting, "The recurring issues in the crypto sector aren't rooted in ambiguous regulations but in a pervasive nonchalance towards compliance."
While the settlement awaits judicial endorsement, the implicated parties have neither confirmed nor refuted the SEC's claims. This episode is yet another testament to the rigorous oversight the crypto world is currently subjected to.
Bittrex's legal woes aren't confined to the SEC. Last year, on October 11, the U.S. Department of the Treasury's OFAC and FinCEN announced hefty settlements with the crypto exchange, amounting to over $24 million and $29 million, respectively.
The SEC's rigorous approach to crypto exchanges is evident. This year alone, crypto exchange giants like Gemini, Binance, and Coinbase have faced charges. While some, like Bittrex and Kraken, opt for settlements, others, notably Coinbase, remain embroiled in legal tussles.
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